Since neither the wing nor the prayer is likely to save investors from the greatest economic and financial collapse in global history, the need for protection or insurance is vital.

We are of course looking at probabilities and not certainties when we evaluate the risk of catastrophe.

With virtually all asset markets – stocks, bonds and property – at all time highs, investors are clearly judging the risk of failure to be nearer zero.

Personally I judge the risk of a collapse of markets and the economy to be between 95% and 99%.

So a risk range from 0% to 99% is quite a spread. An actuary would probably pitch it at 1 to 5 percent risk and sell catastrophe insurance on that basis.

Financial Insurance Dirt Cheap

With both investment markets and the insurance industry evaluating risk as virtually non-existent, that is the time when insurance is really underpriced or in simple terms dirt-cheap.

So what kind of insurance are we looking at here. The conventional investment market will look at hedging financial risk in all kinds of complex financial instruments in the form of derivatives.

What the so called "experts" don't realize is that they hedge their investments with the same instruments that created the risk in the first place, such as paper gold. This would be a real financial tautology.