Tuesday, 29 November 2011
Statement Of Fact Or Fiction?
The Autumn Statement was invented to allow The Treasury to set out its plans and ideas for the coming financial year for the financing of government and for the consequential direction of economic policy.
It was intended to overcome the months of speculation, leaks, misleading claims and general nonsense that had come to be part of the March Budget statement capers down the years.
In other words it was happily assumed that the government could more or less determine what would be going on from four or five months ahead and in the following year. In the past, there had been interim or crisis budgets but these were asserted to be “special” as a result of unforeseen circumstances.
Increasingly the Autumn Statements have become less exercises in reliable planning and forecasting and more abstract Futurology sessions as the pace of events has quickened and the uncertainties increased.
Much of the data they depend on is already months old. A great deal of data now is becoming more and more suspect and unreliable with the radical change in the way the Civil Service operates and the figures are manipulated. It is less an attempt to set out real information, it is far more advocacy on perjured and corrupt evidence.
By the time the data is analysed and further sanitised it has become remote from what has actually happened. As the months pass over the winter and the markets move and change as well as many other things then by April it is has become far removed from the realities of a changed situation.
If a government and Parliament do not and cannot know what is the now there is precious little hope of this group of anchorites ever being able to cope with the future yet we spend enormous amounts of time and effort over the pretence that there is some sort of sense to it.
For the UK and all its parts what may or may not happen or how and when or to what effect is no more in our own hands than in what might happen geologically in the Ring Of Fire in the Pacific and it may be the East which will have the real influence.
As for any prediction or Statement that might be made why is my Ouija Board rocking so much?
Labels: Financial Policy
Monday, 28 November 2011
Today, the Nassau Guardian of the Commonwealth of The Bahamas has an editorial titled “Reality Check” about their current economic situation.
It is a short plain totally jargon free item in old fashioned English that says what it has to in terms impossible to misunderstand.
Wouldn’t it be wonderful if amongst the hordes of those in London who are there to inform and advise us there were any who could be as clear as this?
Posted by Demetrius at 15:45 1 comment:
Sunday, 27 November 2011
Deleveraging For Dummies
Today is the First Day of Advent, once a major date in the Christian calendar now the start point for the Great Shopping on which so much of the economy and the credit card industry depends to meet not just its quarterly but its annual targets.
Unluckily, there is a cloud over it all this year caused by the problems in Europe, the risks entailed and other international uncertainties, for example how much will President Obama give Ben Bernanke and Goldman Sachs for Christmas? They will be hoping for a lot more that one extra live turkey.
I have known worse. On the same occasion in 1945 the situation was grim beyond despair also across Europe. Three days later in Paris the French Government nationalized five banks in an attempt to contain a gathering financial and employment crisis. A month later there were riots in Paris and Rouen because of severe shortages of bread.
Also just after this date an Anglo-US Loan Agreement was signed in Washington, Britain having is own serious problems. In the US there was more interest in the later news that General Patton had hit a truck in his car and was soon to die.
When this happened his troops in Bavaria were routinely searching women employed as manual labour in many US Army facilities. There were few German males around at the time. The ladies had hidden pockets all over their clothing to contain scraps or food items taken were they could. Butter they smeared over their arms, other items were tucked in different parts of the anatomy etc. etc.
Across Europe many starved that winter, many froze and many died because their bodies could not cope with routine ailments, even colds never mind flu’. There were no antibiotics save for Allied servicemen and virtually no other drugs.
In many areas the problem was the absence of a viable local currency, huge parts of the economy operated by barter or quasi-money commodities, notably cigarettes. Crime was rife and punishment harsh and not necessarily within the legal framework.
In this context there is a triple bill of serious items for today. Automatic Earth sees that the only way this can go is for a massive deleveraging of the European Banking system. This would be big nasty and everyone would get badly hurt.
One web contributor, The Slog, who has put in a huge amount of determined work now asserts that the European answer is to put us all in hock to the banks, let them off the hook and by doing so “forgive” a lot of debt. We will pay for it, we will have no option and we will suffer the consequences. The Euro and banking elite will not.
Zero Hedge contributors have been relentlessly critical of the political shambles over the Euro and the handling of the relevant problems. Their story is that even in the depths of the Foreign Office someone is beginning to worry.
It was later in December 1945 that the IMF and the World Bank were established. In June 1946 the Inaugural Session of the General Assembly of the United Nations met in London to be welcomed by King George VI.
But in February 1946 IBM had revealed a machine for electronic calculations, ENIAC. It needed 18,000 valves to work. It was widely regarded as a curiosity with limited potential functions.
So perhaps in 2012 HM The Queen could see the whole international edifice created then collapse in part due to human mishandling of electronic means of calculation and communication.
But others will be hungry again and going round offering family heirlooms or prized possessions for food or fuel.
Posted by Demetrius at 15:42 No comments:
Friday, 25 November 2011
Would You Adam And Eve It?
“When Adam delved and Eve span, who was then The Gentleman” was the title of a sermon given by the rebellious priest, John Ball, 1338-1381. It led eventually to his head being stuck on a pike at London Bridge to the relief of King Richard II, the Bishops, the Nobility and the Burghers of The City.
Within 25 years of this event, the King has died in Pontefract Castle in February 1400 and Bolingbroke had grasped the throne as King Henry IV. If it was February in Pontefract it was probably pneumonia, the freezing fog there clings close to damp valleys around it.
More prosaically, a blunter view is “You can paint a pair of sausages blue and green. But they are still a pair of sausages.” This is owed to the composer Anton Bruckner, a simple and very devout man whose music is anything but simple and of another world. He liked sausages so he knew his sources.
Within 25 years of his death, the Austro-Hungarian Empire, qua Holy Roman Empire that was the centre of his world has disintegrated and few composers shared either his beliefs or ideas. After that things became a lot rougher.
We are now in a world where truth is a difficult commodity to find, facts are never what they seem to be and regiments of highly paid leading graduates of major universities issue material which can never be taken at face value and need a great deal of knowledge and expertise to unravel.
On “techie” matters here is a choice one about selling new gizmos:
The Coalition (or is it Collision?) after a start that did not begin to fly has retreated into the familiar Westminster pattern of government by stunt and spin. There have been two in the last couple of days.
The first is the venture into sub-prime mortgages to keep the building industry and money men happy. This is taxpayer money aimed at a small minority. I wonder how many marginal constituencies are involved or those with interesting choices should the revamp of the electoral arrangements take place? Simon Jenkins of the Guardian is critical on this:
He does not mention the wholesale shambles that is developing across all sectors of the property market resulting from the gross distortions created in the last decade or more or the other factors that bear on the several margins. The emphasis is on the problems of the young but there is an even bigger one developing in the housing of the very old, especially those unable to care for themselves or to buy it.
Another “initiative” is to throw a billion at training unemployed young people. There has been a lot of comment on the web about the real issue that too many are unemployable but I will assume that there are still very many who want to work and make some progress.
Given the numbers involved and growing a billion does not go near it and only touches on the real problem finding the regular and reliable work opportunities to go to. As young labour was priced out of its market in the recent past and many sent off to meet the education targets elsewhere the net effect was to create a situation were many recruiters did not bother to look for them.
Also, according to all the employment agency material I see, it is very difficult to see just where a young person can fit into the kind of employment market that has developed. Things are just not like that anymore. So the “jobs” created are false jobs and another stunt to massage the figures.
Meanwhile we have the Great Pensions Strike of 30 November when anxious Trade Union Leaders, Headteachers, Doctors, Senior Nursing Staff and Managers almost all on six figure salaries with protected inflation proofed pension entitlements of many tens of thousands will lead processions of lower paid public sector workers in protest against changes to contributions and conditions.
The difficulty here is that the simplistic media coverage relentlessly suggests that somehow or other “private pensions” and “public sector pensions” are two monolithic and separate systems. This is nonsense.
As I have pointed out the public sector arrangements have a wide degree of variation with many significant differences. Very many are in serious financial disarray because of the gross government failure of the last two decades to begin to contain and prepare for the impending problems. In fact the situation was worsened rather than improved.
For the private sector the present is very different from the past. One of Gordon Browns first targets was to raid private sector schemes to help balance his books. The consequence of fiddling the figures has closed a great many, reduced more and put most others into serious difficulty. Together with recent policy of hitting the savers to help the borrowers this has worsened the situation further.
But it is the private sector that provides most of the effective tax base for state revenue. If the public sector workers are demanding now that state spending should include funding the very substantial deficits on all forms of public sector pensions then this will simply not be sustainable.
To suggest that it might be is what might be called a Greek Myth. Just like so much of the other spin we are getting. For those who know their Greek Myths a great many end very badly indeed and that is the direction we are going in.
Posted by Demetrius at 15:37 1 comment:
Wednesday, 23 November 2011
Snort Cough Sneeze
This is a Triple A plus stinker and slow to downgrade.
So not much is going on here. And it is time to sack out again for a while.
If I was finding everything confusing before at the moment nothing is making sense.
So perhaps I am on the mend?
Posted by Demetrius at 12:49 No comments:
Monday, 21 November 2011
Over The Garden Wall
Meanwhile in the USA we have entered a period of twelve months hiatus. This is something that happens quite often, notably when an incumbent President has been having difficulties and it going to have to campaign hard and come up with a lot of popular measures to ensure his (or her) return to Office.
It is a very muddled situation there. The Republican Party has had already a number of persons put forward as potential candidates but none of them seems to convince either their own party or most of the voters. The voters want somebody to cut the cackle and do the business but are getting too much cackle and too little sense.
President Obama is in trouble because the USA was in deep trouble when he took over. It has not got any better and the signs are that it is not going to. The debt is still rocketing, large areas of the economy are badly stressed and he has not had either the ability or the chance of picking the kind of team he needed. But there are no Democrats in sight able to challenge him.
And things keep happening, as they do. In most countries this may matter less but in a country where religion is a major deciding force then the wrath of whatever god is in a bad temper is to be feared. Geophysicists, who are wise enough to keep their heads down may worry but prefer to explain after the event then to warn before.
As the USA is very big and straddles a continent between the Atlantic and the Pacific the chances of something changing that will be inconvenient to humans in the area is higher than in most places. It could be anything, but the hot money (sic) is that in the mid West there could be a long drought impending.
The USA also has a failed state to the south, Mexico, which is exporting its troubles to a number of States in the south west of the USA. In the Caribbean a number of small places could suddenly demand a lot of expensive attention.
With all this and the increased dependence on Chinese money and other Asian inputs the USA has now turned West (again) to its Pacific neighbours and is looking to keep some sort of lead and initiative.
This will not be easy. In my experience creditors do not take kindly to debtors who lecture them. They will not the pushover that so many European states have been in the past.
This had led the USA not so much to withdraw from Europe but to regard it as a kind of maiden Aunt who is suddenly in need of care. All its eccentricities have now become intolerable and something to stay away from and they can’t be trusted with the money any more.
Which is unlucky as Wall Street is embroiled with the City of London and parts of Europe to the same extent as it ever was and to the same effect. President Obama may want to politically steer clear of European troubles but Wall Street will not let him. This could become very complicated if the Eurozone crisis worsens.
Also Wall Street is involved in the same network of tax havens and the same shifting of money and capital as are the The City, the Swiss and others notably amongst the big international magnates who call the shots. Enter the Russians, the wild cards in this great game of the 21 Century.
We should remember that the backyards of Russia and the USA overlook each other and there are signs that like housewives of old they have begun to chat over the garden wall away from prying eyes and ears.
So when we look at our own media and see the stories that are being covered the one thing we should really know is that we are being neither informed or advised about the USA and its problems and therefore very little of the reality of our own.
Anything can happen and will.
Posted by Demetrius at 15:42 2 comments:
Sunday, 20 November 2011
Now and again the vibes begin to twitch and the urge to predict something strikes. The trouble is being certain that it is the vibes and not just wanting to express an opinion about this or that.
Sometimes, it is not the vibes but the simple application of thought processes that others seem to have missed or not want to think about. The latter is more common. If the way life is and is going and it does not look good then it is easy to avoid thinking and coming to conclusions that you do not like.
If you are in politics and depending on the opinion of others it is much harder to face up to problems. You are expected to deliver the goodies whatever happens.
The vibes are there again but I do not know why. A lot is going on out there. Nobody seems safe and anything can happen not just in politics and money but many other things. I do not like the look of the run of earthquakes off Tokyo but the big one that is due may not happen for decades.
Up in Siberia apparently the Russians are flaring off huge amounts of natural gas because it would be too costly to deal with and to transport to the markets for it. What other forms of massive waste occur around the world? There could be a very long list for this.
In terms of money, banks, debt and the rest around the web there are a lot of grim looking graphs. Things rocketing up should not be going up. What are going down is all our incomes, pensions and future prospects.
Sooner or later, those states in hock to vulture funds because their debt has been sold on by the people they borrowed from will stop paying. Also soon peoples who have been massively ripped off by their rulers will revolt and also decide that enough has been enough.
Meanwhile, we have Europe and what is left of it. Just what are Cameron, Merkel and Sarkozy doing? I have thought long and hard about this and have come up one possible way of describing their current joint approach to all the problems. It is here:
As at present this is the best I can do. As for the vibes, they may not be reliable. As I am on heavy doses of ginger, lemon and honey to shift the congestion it may be doing things between the ears that alter the neurone paths.
But it could still be right.
Posted by Demetrius at 14:20 1 comment:
Saturday, 19 November 2011
Lions Tigers And Other Wildlife
A couple of weeks or maybe more ago, tucked away in a late schedule was a programme from BBC Wales about the 1971 British and Irish Lions Tour of New Zealand introduced by Eddie Butler. Martin Johnson was still in his nappies and Rob Andrew an eight year old still wondering why a ball should be that shape.
It was from the 1971 Tour that the Lions returned having defeated New Zealand’s All Blacks twice and drawn once in a series of four games after playing some wonderful rugby. The archive film was glorious to watch, old rugby at its best and a game that differs greatly from that of the present. For one thing the players were all shapes and sizes and not identikit lumps turned out of gymnasia.
In this year’s World Cup the New Zealander’s were looking good, at home and up for it. It was always going to be difficult to stop them. France, unexpected finalists, made them work hard for the title but the All Blacks ground them down. Amongst the other teams in contention there were three or four who might or might not and did not. England was one of them.
To call this a “disaster” is really very stupid. Yes, they failed, but so did all the others except the All Blacks and it was in a game against France which was one of those where it did not work as it should have done. Been there, done that, games which might and should have been won but were not.
Unluckily, the defeat was compounded by players who were not alive to the nature and immediacy of modern communications and media coverage when they thought they were allowed to let their hair and other things down. But we have been here before.
In 1960, Peter Wilson of the Daily Mirror, their leading sports journalist and “The Man They Can’t Gag” made a rare excursion into Rugby Football to express his anger in an article entitled “This Hooliganism Must Stop”. It was to do with conduct by some players after the match that was rather livelier than the present England side in that just about all were former servicemen.
They made the error of assuming that there would be no press coverage to worry about. But that is another story. It might be simply coincidence but this bunch of daft blighters who were well past their teens were all from Johnson’s home patch in Leicester. Indeed he may have come across one or two in his early years.
However, the press conference given by Johnson and Andrew this week had its delights. The media did not much change from them and it was very refreshing to see all too evidently that they did not care much for the press and did not have a high opinion of them.
Whatever the rights or wrongs of Johnson’s going it was good to hear a plain Midlands accent laying it out simply and directly and an old pack leader getting his head down to take the pressure. He did not give much away, but he never did on the field. It was not so much assurance as dignity and sensibility.
The real delight was Andrew, a former fly half fleet of foot and accurate of boot who gave a display of good hard hand offs. “That is a hypothetical question. I am not answering hypothetical questions.” When asked what he was going to do, “We are going to work hard to find out how things can be done better.” Asked when he replied “As soon as I can get out of here.”
When a leading question suggested that the single defeat raised issues about the whole structure of the RFU he replied to that the problem was that the media seemed to know little or nothing about structures notably those with complex responsibilities and varied tasks.
He pointed out that the England Squad were just a smaller part of a larger whole and distinct in terms of its “elite status”. This more or less suggested that the media knew San Fairy Ann about most of the work of the RFU and were only interested in a single immediate aspect.
Andrew was at St. John’s College, Cambridge, founded by Lady Margaret Beaufort one of the most formidable and talented women in recorded English history (see 25 October 2011 on Shakespeare). She must have been grinning up there.
Johnson, as a youngster began his rugby with Wigston, a minor local club in Leicester. Later this merged with a more senior one, Westleigh and the new club took the name Leicester Lions, which I thought a bit naff, but there you go. After a couple of good seasons in League 2 North, the Lions are not doing so well.
So if Martin has some spare time, could he nip down to Blaby and apply some of his skills there?
Posted by Demetrius at 13:45 1 comment:
Wednesday, 16 November 2011
A Digital Theory Of Money
Digital money comes from nowhere and goes nowhere. Anything can happen in between. We do not know how much of it there is or where it is or why.
This is intended to be a short post so explaining all the past theories of money and connected theories of economics in the meantime will have to be skipped. All that needs to be said is sometimes they connect better than others and too often they do not connect at all.
What the economists have said about how things work and how the money men have actually operated and the issue of who is using what kinds of money to what purpose is difficult at all times. It is more difficult during periods of rapid social, political and technological change.
Which is what we have just had in the last couple of decades only this time round it has been speeded up. Moore’s Law (Wikipedia) has come to apply not just to computing but a great many other things arising from their impact.
The notion of “creation of credit” has been around for a while. Simply it was the ability of banks and finance houses to enable credits to be given to borrowers to a greater extent than the assets held by the banks etc. At one time this applied to holdings of “hard money”, physical precious metals or stones, but later became “fiat” money and the figures in ledgers.
When it was largely “hard money” that was acceptable the only way to get it was to dig it up, engage in trade or conquer territories where it could be dug up. This put a number of limitations and constraints on governments in that in the last analysis there had to be physical or trading controls of varying types.
As governments developed and grew in power the shortages of “hard” money arising from their ambitions, growing populations and extending trade meant the use of “fiat” money.
As this began to supplant “hard” money and as “fiat” money came to be under the control of governments we had a phase when politicians could chirp happily on about economic planning and controlling the economy and everything in it and being able to throw money at those things which conferred political advantage.
Having achieved a high degree of control and looking for still more ways to find money to please their clients many came to “loosen up” the regulation and control to let the money men indulge in much more “credit creation”. Governments still thought that their control over the issue of the “fiat” money and some rates of interest would do the trick of keeping matters in hand.
One of the features of governments as a whole in the last three decades has been the astonishing lack of understanding of what computers are and can do; their remarkable incompetence in dealing with their own systems and inability to find out what is really happening out there in all those main frames.
It has not been helped by a matching inability of the top levels of management in very many of the banks and financial companies to understand what goes on. The one thing they did understand was that the geeks together with Professors of Mathematics and hard nosed traders delivered what appeared to be huge increases in both total activity and related profits.
To do this they created beyond the control either of governments or their own top management unlimited amounts of digital money. This came as what appeared to be ordinary money and credits but added to that a huge array of highly complex forms of quasi-money and financial instruments representing an end value of money.
They were able to do this anywhere they wanted, move it about anywhere and at any time they liked and increase it at any rate they chose so long as the figures looked good and convinced the wondering ignoramuses in the Treasuries, the Central Banks, the Boards of Directors and most of all in the governing cabals of the world.
Governments have lost control over the world’s supplies of money and credit. Because of that they are losing control over their economies. As this happens they will begin to lose control over their populations and other people. Quite where this will end is not certain. What is certain is that there are a number of states that have failed and others that are about to fail.
All the old theories or certainties about money, economics and politics are gone.
Those who do create the digital money demand governments pay for their errors and continue to support them. The money men have no interest in either control or the effects of their decisions on ordinary people other than that they have the ability to extract money from them at the bidding of the money men.
It is 28 June 1914; the Archduke Franz Ferdinand of Austria is visiting Sarajevo with his loved wife Sophie. They are not using the old fashioned horse and carriage form of transport. They are in vehicles of the new automobile form of personal transport, said to be faster, more efficient and a more effective way of moving about.
There is confusion in the seating arrangements, one of the cars is damaged and then there is an error in the giving of directions. When the driver tries to reverse the car it stalls, and the political assassin Gavrilo Princip shoots.
The world began to change.
Posted by Demetrius at 13:39 1 comment:
Tuesday, 15 November 2011
There has been a flurry of comment in some of the media about the impending takeover over Europe by Germany. Here we go again is the response of many especially those with long memories. So what is the source for this?
For those interested it was likely to be an article picked up from the German web site The Local, Germany’s news in English, which relayed Herfreid Munkler’s article on “The Need for a Centralization of Power”.
This suggested that democratization of decisions at national level was a potential for disaster and Europe’s elite should get their act together fast and do the necessary to save Europe for Germany and at least to save Germany.
What was it that Martha Stewart said before she was arrested in 2004 for dodgy tax dealings? “Only the little people pay tax.”? In parallel with this call to the great and good, or may be not so good it is being argued that the German approach to dealing with tax avoidance and evasion in relation to Switzerland is not quite what it seems to be.
In the UK similarly things are not quite what they seem to be and it is amazing how the information only turns up by accident. But with most of government policy at the moment seeming to be the products of accidents this is not a surprise. One choice gem is that those flying in on private jets recently have not had to bother with border controls at all.
Quite unlike the little people nervously wondering whether the passport sold to them in a bar in Bucharest will pass the officials. It seems only right, therefore, that the officials dealing with the hoi polloi should stop checking any passports in the name of social equality.
However, the little person still could find himself not welcome, but if you have millions there is no problem, come on in, we need you. More to the point if you can persuade a bank, maybe Barclays, to lend you the money on the basis of assets claimed to exist in a tax haven this will be OK as well.
That the fortune claimed may be the result of either pushing money round accounts or the gentle art of money laundering would be an invasion of privacy to ask about. This may be why the UK is said to be the biggest criminal money laundry in the world.
Our politicians of both left and right have told us that these are just the chaps we need to keep our finances afloat, and keep our sporting and certain entertainment facilities amongst the most desirable in the world. Where would we be without them?
What worries me is the closeness of these people to the elite group that are supposed to be taking charge of Europe and all our taxes and spending. In fact they are so close as to be almost indistinguishable.
It might explain why some of the property investments lately discovered to be bought with their expenses by people in Parliament seem to be located in “red light” districts.
Knock, knock, who’s there?
Posted by Demetrius at 18:07 1 comment:
Monday, 14 November 2011
Olympics Ring A Ring A Roses
Amongst the many stories this morning confirming the view that chaos is with us and is not going away was one about Olympic Security. This has coincided with a story about how Suffolk Churches are being encouraged to raid their Poor Boxes to put on a light display bathing the Houses of God in the Olympic Colours next summer.
Given the fortunes being made by some of those running the show as well as all the profit and marketing opportunities arising from both government and local spending drawn from the taxpayers it can be said that emptying the Parish Churches of their cash is almost surreal.
That the row over security provision has emerged only nine months before it all happens should make a lot of people worried. As for the USA sending in the FBI, well they usually do, but this is only indicative of the wider problems. This blog has been here before.
On Tuesday, 12th May 2009, yes 2009, an item “Olympic Security Costs” was posted in this blog setting out the essential issues, the dangers and the likely costs of providing for adequate security arrangements. It was not extreme, nor was it alarmist; it simply tried to spell out what was what in terms of the present and the experience of past Olympics.
One question was how far the Armed Services would be able to help out, as in 1948, in terms of numbers and cover for critical areas. We can be fairly sure that because of continuing commitments and other problems there will be little to be had.
There has been the control and monitoring of people coming in during this period. From the stories and information on the crisis in the Borders Agency coupled with a huge influx of illegal and other barely checked migrants it is clear that we have lost the plot.
Also the failure to both deport and identify many high risk criminals, terrorists and extremists already staying here which presents an unknown quantity to working out who, what, where and how.
What we have had is a load of media happy hype with whipped in “ambassadors” and “volunteers” who are little trained cheerleaders and gofers almost all of whom are clueless about security and the rest.
In the last few weeks we have had some nasty riots and also a great many demonstrations and other activities which have clearly stretched the existing capability of police forces.
Personally, I hope against hope that there will not be trouble in London. This is for the purely selfish reason that quite often we go there and we do not want to find ourselves in the midst of a security shutdown or disaster.
Nor do we want to suffer the unending inconvenience of encountering high security activity everywhere we go.
Life is too short for that, especially if we are paying for it.
Sunday, 13 November 2011
Dance To the Music Of Time
Shuffling my way back in after the first interval with a lot of others there was this big bloke by my side. It was worrying; if he trod on one of my best trainers he could get an earful that might spoil his family occasion. My trainers are expensive footwear. Because of my feet I need to have those designed for athletes and such.
Then I realised who he was. So now I may claim to be a source close to George Osborne, Chancellor of the Exchequer and indeed might have had his ear. For a fleeting moment the thought came to say something. It would on the lines of the Soothsayer in Shakespeare’s “Julius Caesar”. “Beware the endogenous growth theory!”
Then I remembered it is probably written in the blood of a Special Adviser on the walls of his office at The Treasury, left from the time of the last Chancellor, Alastair Darling. Perhaps it had been written by his predecessor, Gordon Brown, as a change from throwing hardware about and left by Darling as a dreadful reminder of hubris.
That might have spoiled the occasion even more. George was escaping from the fantasy world of Europe of the last few days and all the strange and improbable stories he had been told by other ministers and experts there. It would have been good to be away from all the posturing and demands for attention and approval and craving for an audience.
We too found it refreshing to be at a performance which mingled expert attention to detail with comparatively social realism and an appreciation of the true moral imperatives that should underlie human conduct. Where the Good might be paramount and the squalid selfishness and greed of others denied.
It was The Royal Ballet “Sleeping Beauty” at Covent Garden. It was clear that they had been doing a bit of quantitative easing of their own in that the costumes were new, more highly coloured and with subtle changes. The last time the costumes for this signature production were renewed was when the Royal Ballet went to the Kennedy Arts Centre at Washington DC and did a gala for President Clinton.
Famously, back stage when being introduced to the Principal who had danced the Lilac Fairy, the character who sorts it all out and puts both things and people right, he said that “We need a Lilac Fairy at the White House.” Unluckily, the US Media being short on humour and ballet plots and long on speculation came to some very strange conclusions over the meaning of this. It went down badly in Texas.
But the meanings of it all, what were the signs and portents? Red Riding Hood’s coat was much redder. Does this mean more EU regulation and control of credit such as those of the mid 20th Century? The wolf was clearly of a more Russian, even Siberian type and not one of the previous Yellowstone breeds. Is Europe going to be forsaken by the US and needing to turn to Russia?
The Lilac of the Fairy I am expertly advised had a costume that was magenta rather than Lilac. Whereas the colour lilac was associated with Empress Eugenie of France who popularised silks made with the new synthetic chemical dyes, magenta was the prime colour of the banner of the old Holy Roman Empire that finally ended with World War 1 after its major decline in the 19th Century.
So republican France may be forced to give way to the German inheritors of the old authoritarian imperial tradition? There was worse. The four suitors for the hand of the Princess Aurora in the Rose Adagio showed those of the East being more stylish and strikingly attired than the overdressed and out of date clothing for the period of those of the West.
However, Princess Florine and the Bluebird were much the same. Was this to assure the Chancellor that the Royal Ballet is on his side? There are other mysteries difficult to unfold. At least the happy ending was the same. But George will go away with much to discuss and to consider in his dealings with Europe.
Let us hope that he doesn’t get caught in a “Nutcracker”.
Posted by Demetrius at 16:49 1 comment:
Friday, 11 November 2011
The Answer To Everything
Money and finance have become divorced from the real economy.
It is as simple as that. They have been able to develop a life of their own increasing removed from the realities of getting and spending. “Investment” now is no longer what we understood it was. It is now shuffling digital “money” around, largely figures plucked from the fevered imaginations of the financial sector.
Some of it may find its way into the real economy, much as alimony is paid to former spouses. But in this field it is not a judge that decides the figures it is the guilty party in the divorce.
The trouble is that the money created which leaks out of the system increasingly goes to bought governments and agencies and large commercial firms which pursue policies and actions that allow further extraction of figures which help to churn the money through the computer systems, i.e. the economics of extraction.
Many of the more damaging credit crashes of history, going a long way back, feature this kind divorce in differing ways. The ledger based money, the tallies of merchants or the paper money created goes out of any synchronisation with a real economy and the result is one disaster or another.
In the late 20th Century we got our hands on computers and both speeded up the process and by thoroughly globalising it created digital money that could be whirled through space and time zones in an ever increasing frenzy.
To keep the party going debt was turned from a danger to the lowest earners into a necessity to survive and huge credits urged on people who had little ability either to pay or to manage them. Amongst the wealthy we had casino capitalism with the high rollers going ever higher.
Inevitably, politicians, dictators, civil servants and the rest bought into the wonders of it all both for prestige and personal profit. So most, if not all, of the world’s governing systems are locked into it without any real exit.
In the past empires have collapsed, mass migrations occur, wars and hunger litter the history books and perhaps whole past civilisations began their decay or disasters.
So what are the markets telling us today?
Posted by Demetrius at 18:01 3 comments:
Thursday, 10 November 2011
The Crisis Ain't Over Until The Fat Lady Sings
Apparently, I learned from Fraser Nelson, the G20 caper was held at the Frankfurt Opera House. The original Alte Oper was reduced to a shell in 1944 by some of our American friends who were then just down the road, how we cheered them at the local Victory Parade in 1945, and not rebuilt for some time.
Now there is a big new Opera house, winning awards for its productions. The Alte Oper has been restored as a concert hall and the standards are very high. The G20 were given a treat in the shape of a concert conducted by Claudio Abbado. He is one of the best and we have seen him in action and on Sky Arts 2 a good many times.
Born in Milan, he has La Scala, the London Symphony Orchestra, the Chicago Symphony Orchestra, the Vienna Opera, the Berlin Philharmonic Orchestra and the Lucerne Festival Orchestra on his CV.
He was just the person to be on the podium with Italy under the cosh and its Prime Minister Silvio Berlusconi heading for the exits.
The trouble with the G20 is that too many of those involved are not only compromised or seriously affected by their recent track records in past dealing with the collapse of systems but they are up for election shortly, or under threat or up against entrenched vested interests.
For the USA, the President has already begun his election campaign that will last a wearying twelve months, Sarkozy is due to face the people, Merkel has trouble and Cameron’s coalition is looking shakier by the week. Italy and Greece we know about but there are others frantically making personal financial arrangements for their impending retirements.
Our UK Parliament being filled with student politicians, former PR people and lobbyists, lawyers and media people largely unable to fill in an accurate expenses return is not a reliable body from which to draw any government, not just a polity going in serious decline.
The US Congress on the other hand whilst being more broadly based is almost all on the payroll of one lobby, financial interest or other interest group. As they are all going to face an angry electorate in the next few years they are doing their best to put the blame onto others, any others.
The G20 is always going to be weeks, if not months behind events and the way things are going. Even if they were competent, reliable and well informed the immensity of the task might be too much. They are none of these things. The key player is Merkel and the big aria is yet to come.
It was in 1937 that the Frankfurt Opera premiered Carl Orff’s “Carmina Burana” (lots of it on Youtube and Wikipedia) that begins and ends with the chorus “O Fortuna” and includes ditties such as “They who here go dancing round”, “I lament the wounds that fortune deals” and “If the whole world were but mine”.
The G20 audience, however were given some Mozart and the rest. Perhaps “Carmina Burana” may have touched too many nerves.
Posted by Demetrius at 13:44 No comments:
Wednesday, 9 November 2011
Hell Is Other People
The row of the week over the excess of comings over goings that have embroiled the Home Secretary, the former head of the Border Agency and others ought to be instructive for a number of reasons because it features so many of weaknesses and insanities of our present ways of government.
The special weakness is because of the media need for simplicity and to have issues put into slots and the equal need for politicians to deal with only one thing at a time because that is all they are able to do results in separation of related issues.
In fact it is all much more complex and is interwoven with a number of current other questions that are demanding attention. They may seem to be separate but they are not. The consequence is that what should be a seminar turns into something more like a student riot.
If you look at the question of airport capacity, hubs etc., the need for airlines to stay in business, the tourist industry, the higher education industry, employment policy, the benefits system and Europe, they all affect migration matters. We do not plough much money into real research, only into retailing recent history together with ideas and assumptions from the past.
For airlines to function, stay solvent and even grow they need passengers and airports. The more people they can put into aircraft and the more that can be moved cheaply through facilities designed for mass transport the happier they are.
As this is associated with top business people, but also families, ordinary working needs, with persuading large numbers that a holiday must entail flights and that the beaches furthest away are the most desirable it creates a large market. Moreover, all these people on landing in the UK want to be on their way as soon as possible.
This creates major political imperatives to subsidise airports and flying and in particular ensure easy mass transit at public expense on the ground and other communications. So the numbers become very large. When I walk along the road to town the vapour trails tell me that in the few minutes it takes there are thousands of people up there above me.
In the era of cheap oil and with the growth of mass air transport the idea that the tourist industry is a good thing has been an easy get out for trying to plan economic activity for many places. Clearly, those that are sandbars in the ocean unable to either grow or make anything will not be able to support more people without money coming in and being spent if the population can increase.
Most people in the UK have bought into the notion that tourism is essential to the economy and not simply an add on for quaint places and less populated areas. Because so many of us go to places which exist only by tourism it is easy to assume that it might be a good thing for us.
Similarly, the belief that any higher education is good so long as it is post 18 and attracts students has created a large sector for that purpose. This has gone beyond the point where the taxpayer can stand the racket, which leads to awkward choices. One is that the UK students might pay more another is to market UK provision to overseas students as desirable.
Clearly if large numbers of people are being invited in because we want or have come to need their money and some decide to stay it is not only inevitable but somehow seems unkind to insist on throwing them out once they have put in a lot of cash to keep us going.
Many foreign students are from nations with surplus males and their piece of paper will buy them at home only middling clerical work at best at local incomes. They will often have a single life in a corner in a crowded home somewhere where white collar jobs are short in supply. Little wonder that they like to stay in the UK, draw benefits when needed and can live free from the restraints of the home cultures.
Around a decade ago when at a meeting discussing the world environment the speaker talked about the “footprints” of major urban areas to indicate how much of the world’s resources were required to keep this city conglomeration or that alive. The subtext was that the uncontrolled growth of many areas was not sustainable.
There was one man who popped up to comment, one of the Prime Minister’s close advisers to declare that UK immigration should be unlimited and there should be no restrictions for all sorts of worthy reasons. That the UK has a large number of urban areas did not worry him, it would all take care of itself.
Later we had major reorganisations of government departments and a lot of work was devolved from the civil service to agencies of all descriptions. Many of these seem to be exercising power without responsibility so if the Borders Agency is doing the same it would be nothing new.
As the heads of so many of these bodies at present were appointed by the previous government then this will not help to try to brings things back together again.
Then there is Europe and the power we have handed to it and the added difficulties of trying to manage to deal with their policies and decisions. These have brought additional large numbers into the UK in recent years, substantially in the lower income levels.
Apparently, there has been a flood of Greek money into London in the past few months taking advantage of our arrangements for the better off to rescue their finances from the disaster to come. It is likely that we may have numbers of Greeks coming in to join those already here to follow the money.
Quite the worst event if international finances deteriorate will be the mass migration that the UK government and especially the opposition do not want to see. It is all those older UK citizens who went away to sunnier climates in the last couple of decades returning spent up, homeless and angry.
Will we welcome them in the same way that we do the tourists, the students and the financiers?
Tuesday, 8 November 2011
Restore The Ottoman Empire
The past is full of examples of how things might have been different, if only this or that had been changed. One of these is that the Ottoman Empire finally collapsed just before the immense wealth under the soils of it vassal territories became the staple fuels of the world economy.
If by one means or another, at the centre of the Empire the rulers had been wiser, better equipped and more determined they had managed to survive, remain a real power and avoided becoming involved in World War I. They might have stopped the dismantling of the Empire and its loss largely to western powers.
With the wealth that they were literally able to tap what future would that have brought? Would we really be that much worse off? The Ottomans would have been able to stop the later wars starting by simply turning off the pipelines at an early stage. It is very likely that by 1918 they would have been able to dictate the peace that ended the first war.
There were some who argued that for all its faults and bouts of foolishness the Ottomans were a source of greater stability and enabled other states to deal with one overall authority instead of the present multiplicity of petty warlords. Even the Greeks may wish to rejoin.
Perhaps a visionary somewhere might seek to create a new joint authority in the Middle East. It would be a counterweight both to the failing EU and the erratic course of US ambitions and errors. Because of the belief systems it would have within it and the differing cultures it would not be the same as the EU.
It could be a political force to balance Russia and China in a way that India cannot and nor can Brazil or other large powers. If it could achieve both the ability to rule with a sensitivity to the needs of its many peoples then it could act as a catalyst for dealing with the many divisions of these other powers.
If for example it managed to contain rampant usury and demand a moral dimension to international finance it would do us all a favour. If it released science from the control of the mega corporations who have so distorted learning then the medical progress of the old Ottomans could be restored to the present.
Who could be the man to do all this? Tony Blair, your time has come with perhaps Mandy as the Grand Vizier, Gordon as the enforcer, Scimitar Man and Big Ed as the keeper of the harem, after a minor operation. But who would be the Janissaries?
Regretfully, they would not be for me, the Varangian Guard are more in my line.
Posted by Demetrius at 19:02 No comments:
Monday, 7 November 2011
Waving Goodbye To Tourists
There was a brief news item yesterday; overtaken by more Olympic matters later, that suggested that for next summer at present, the bookings for tourists in London are much reduced. It is said that they are being put off by the prospect of increased prices because of The Games.
Normally, I would amongst the first to charge the Olympics with the guilt for this alleged misfortune, but in this case it goes beyond a “Not Proven” verdict, the nod to Edinburgh’s claim that they will benefit. However, whether the attraction of the most expensive tram lines in history will work is another matter.
With sixty plus years of traipsing around London from time to time back to the 1940’s to recall, it is not a matter that London in 2012 will cost a lot, it already does and in the last decade has become rapidly worse.
“Spending a penny” was once a statement of fact for doing natural functions in public toilets and then discriminatory in that men paid only for when it was required to sit whilst women, who always sit paid for both the fore and aft functions. Now in some London toilets it is 50p for entry, men and women, or 120 old pence. Whether inflation is the right word for this is doubtful, but it is typical of the rise in costs.
Normally, extractive industries are described as “primary” and refer to taking resources from the ground. Then there is using them, which is secondary, whilst tourism has been classed as a “tertiary” service industry. But in our new money based and financial world it may be that tourism has become very much an extractive activity.
There are figures quoted that tourism has come to amount to 15% of the London economy and it is possible to believe it when just looking around at all the hotel rooms that have been created, the numbers and types of food outlets and the amount of retailing now provided.
The trouble with extractive industries is that there is a pattern. First they are profitable in the early stages of expansion to meet increasing demand and then there might come a “peak” of production. When that is passed not only do the stresses of production take their toll but a combination of rising prices and reduced take up can occur whatever the laws of supply and demand might suggest.
What does strike me is that central London now for some reason has lost its way, has become less attractive and the hordes of people apparently simply milling about have become a deterrent to enjoyment. Unless you have serious money to spend you are fed a diet of processed food and pay a heavy price for anything to drink.
When we see the groups of blank eyed people being marched about, the coaches with tired groups hoping against hope for at least one decent night’s sleep; the endless noise and the mingling of the mob, what are they here for? It is not the haven of Heathrow or the gardens of Gatwick that is the draw. It is a “heritage” now looking very tatty and at very high prices.
As the world economy changes so will tourism. With so many on middle incomes being squeezed, savings eroded, pensions diminished and others with risky futures just how much tourism can there be in a future when travel costs increase with fuel and other price rises? In the last couple of decades millions of people have visited. Just how many have gone back to say to others that there are better places to go to?
Additionally, how many of the younger generations will have much time for or interest in our particular brand of heritage and media culture? The Games may well be the last hurrah for London tourism and it will go into a decline that might be slow but could well be steep.
The implications of this are interesting if anyone cares to think about it.
Posted by Demetrius at 17:39 No comments:
Sunday, 6 November 2011
Spending Other Peoples Money
The Guido Fawkes blog does not relate much to other bloggers. It is part of his bread and butter and understandable. Also, he normally goes for short and punchy pieces to keep the attention and move the story on. You know when you look it will short and acid.
Today, Sunday, however, he went long. A former investment banker he knows what it means to go short. The subject of his post is the Michael Lewis book, “The Big Short” which attempts to show what has been going on in the boiler rooms of the trading houses.
Briefly, they have been taking huge risks with big money and this has been other peoples. When it went bad, because of the politics and the involvement of politicians now we all have to pay.
Here is the link, it is worth reading and even better saves me the job of trying to explain what Michael Lewis has to say:
Personally, I am glad to see that there are better informed people on the inside who have described so well what some of us have suspected.
The whole business went out of control and the question now is can it ever be brought back to any reality, or will the whole shebang just go up in flames?
It was Guy Fawkes night yesterday. On Discovery was a programme trying to show what would have happened had he managed to light the fuse in 1605.
There would have been nothing left.
Posted by Demetrius at 15:26 No comments:
Friday, 4 November 2011
Lies, Lies, And More Lies
It is a commonplace to suggest these days that we have an “information overload”. That is from the wealth and variety of sources there is now so much to read and study on almost any subject that it is impossible to either absorb it all or really understand what is going on out there.
This starts from the basic assumption that all this material is either reliable or is intended to be reliable. This can lead to difficulty. I may well believe that the moon is made of green cheese and can cull sources from history to support my case. But the weight of evidence would be against me.
Therein lies a problem. The weight of evidence may be in one direction for a number of reasons but as we have learned too often might well turn out to be wrong because there is a built in assumption or theory that turns out to be far from the case.
Think of ulcers and their treatment. In the past it was believed that bacteria could not exist in the stomach or the gut. When a backwoods Australian decided to see if it did the consequence was to undo a great deal of medical practice and theory.
This is science and even in this sphere it is necessary to be careful about what is said to be or not to be. With increasing reports of now how much “science” is controlled by particular interests who want the results to go their way and therefore both the honesty and reliability are in question then these are troubled waters.
When it comes of politics, finance, economics and the realms of “social studies” and the rest in our modern world it is all to play for. In the past the desire for rational analysis and reliable information led to a hunger for figures and facts. For the most part in the early stages the intention was to be honest but as soon as politics was involved then the use made of them became increasingly dishonest.
Essentially, there are three categories of information. The first is that which is intended to he an honest assessment or statement of what is known from which conclusions are offered which are supposed to relate to the information.
Even with this category the information and conclusions are only as good as the original data. If this has taken time to collect and work on then by the time it appears things may have moved on. Whilst the data is not “false” but maybe has flaws by the time it becomes available it may no longer represent reality.
The second category is information put out as data but which often is more opinion or information twisted or used to present support for a policy, action or idea. Often the data might be incomplete, distorted or ordered in presentation to make a case rather than be a rational and impartial analysis.
The third category is information which is deceptive. There are two classes of this, one is material known and intended to be a deception. The other and the very dangerous kind, is where people have in fact deceived themselves to justify what they are doing. That is acting more in hope or theory than knowledge.
When you have a group of politicians or financiers who have more or less abandoned the first two categories and have come to rely almost entirely on the third then you have deep trouble. This is worse when you have the lethal mix of the two kinds that was characteristic of the Blair/Brown years and at present of the EU and high finance in the USA.
Given that so many regimes in the world are deeply corrupt and that so much of finance is about the economics of extraction when their leading representatives come together to decide on the fate of the world when faced with a chaos of their own making then their deliberations are entirely based on false data and false premises.
They do not know what they are talking about or why so the result is likely to be chaos, or rather worse chaos than we have at present.
Posted by Demetrius at 18:07 No comments:
Thursday, 3 November 2011
Are You Looking At My Bird?
Estimates from a number of places towards the East suggest that in many states the number of young males in the frantic age ranges for female company now exceed those available by a substantial amount because nature has not been allowed to run its course.
Of those many fewer females who are allowed to exist there will be a proportion, greater in some places than others who are withdrawn from what might be called the “open market” for internal family reasons.
They are needed domestically in the parental home or on the farm or because of religious beliefs. Also here and there are other reasons why women are shielded from the full force of male attentions and removed from ready contact.
Those UK males forced to spend time in grim garrison towns in the past will realise the implications of this. When there are a lot of loose men and a serious shortage of loose women, broadly defined, there is always trouble of one sort or another.
Recently, some historians looking for reasons for one upheaval or series of events have wondered whether some of the happenings of history might not have their origins in past situations of this kind rather than fine philosophies or higher thoughts.
One place that occurs to me is Boston, Massachusetts in the late 18th Century. There are British troops garrisoned there (see above) and it is a port with both mariners from trading vessels and seamen from Royal Navy ships. It attracts migrants from many parts of Britain and Ireland, the great majority male.
Add to that the settled townspeople are almost all deeply religious and worship in many churches that demand high standards of faith and personal conduct. So their womenfolk and female servants are closely guarded and watched over day and night. They take great care over the marriages they make.
In short, a lot of loose men, many with money competing for the few loose women about and a situation in which there are many more losers that winners. The main losers are local young men who are priced out of the market for the few females who are more available.
Inevitably, there is trouble and a natural, literally natural, desire amongst young Bostonians to see the British go home. Apply this logic to many other places and times of serious trouble in history and see how often it might have occurred and where. There are many more of them than you might think. You could try humming “Lili Marlene” while doing it.
Now, here is a test of your skill and judgement. If you are a surplus frantic male where there are very few loose women and you are a poor catch in your local marriage market to where do you go? Which country advertises the ease of access to its young females (and others) widely on the net and on TV and has more or less open borders?
All you have to do is hop on the back of a truck.
Posted by Demetrius at 15:23 2 comments:
Wednesday, 2 November 2011
DIY For Drawing Maps Of Europe
During my own lifetime the map of Europe has been knocked about a bit. As for the world many of the names I learned painfully (a whack when one was wrong) from the map on the classroom wall are no longer there. When my parents first went to school they would have been looking at a very different map, but any whacks would have been much the same.
When their grandparents went to school (if they did) places such as “Italy” and “Germany” were simple geographic guides and not existing nation states. They had yet to be formed. As for their grandparents the map of 1815 above would have seemed like a radical set of changes.
Which raises the interesting question, is “Europe”, as we understand it at present, worth bothering with? Why not just let fate takes its course for us to move onto a very different set of political entities with different structures?
In the last five hundred years there have been far too many gaggles of ambitious families, oligarchs and gangs of politicians trying to set up a mega state in their own narrow interests and failing after a disastrous, usually bloody and always very costly series of wars and conflicts.
The latest Brussels version is just one more typically arrogant, tired and corrupt way of trying to impose authority on peoples whose ways of life, beliefs and the rest are very varied and not cohesive. The reason for the present “Europe” is the usual one. It is the extraction of wealth from the many to the few.
This time round it has necessitated whole scale bribery of many of the masses. It has been done by creating debt fuelled booms together with forms of inflation that give the appearance of increasing wealth when the reality is different.
Just as the DNA of the Habsburgs began to fail to produce Emperors able enough to command and rule so the financial systems created to sustain our present Europe have begun to fail to kept the racket going. Big bangs may implode as well as explode.
We are in the position now of not being able to go back to the monetary systems we had a generation ago or before, not being able to sustain the present one without strains that are potentially impossible and without any idea of what to do in the future.
It reminds me of the car mechanic looking under the bonnet of my old Renault and shaking his head sadly. He told me the best thing to do was to sell it for spares at the local breakers yard. It was worthless as a whole and its future existence lay only in the bits that could work in a different machine.
If we are now looking at not simply a failure of the Euro but potentially the political integrity of a number of the components of our present “Europe” which way could it go?
Could Verden revert to Sweden? Could Hamburg and Bremen become City States once more? Could HM The Queen ascend the throne of Hannover in the name of women’s rights? Could Westphalia be, well, Westphalia?
There are more likely candidates for a relapse into separatist polities, Italy being the prime example but there are others. It could make a very good party game for the Christmas Market to see who is left with what. The winners get Switzerland, Monaco and Luxembourg and the losers Greece, Sicily and Ireland.
The dice have begun to roll and my money is on Iceland hoping to draw the card that says “You may have the Big Bang of your choice.”
Posted by Demetrius at 15:26 2 comments:
Labels: History Europe
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