Monday, 20 February 2012
A Base New World
Now that the Chinese love fest in Dublin and district has come to an end, the question remains, what did they want? Was it peat for their gardens? Was it the agriculture in that they have been buying into land world wide?
Was it to recreate Dublin as a Chinese money laundry for their European operations? This is a lot of effort by China for a little country with big debts and going nowhere.
Historically, when The Republic became “independent”, long on rhetoric and religion but short on economics they kept with the Sterling Area and the pound. Within a decade the cracks started to open up in that system with the Irish getting the worst of it as Britain went bust with wars and the loss of Empire.
Eventually, The Republic signed up for Europe with no other option really on the table and then once it had made some space for itself and a currency of its own signed up for the Euro. Now the Euro has gone bust.
Out there amongst the pessimists and the stormy petrels of the financial world there is talk of the Chinese model now becoming unsustainable to the point of being vulnerable to Something Happening. Will Ireland be signed up snugly with China just in time for the bust there to come in as predicted.
Scotland, where at one time the nationalists were proclaiming the Irish Tiger as the model to follow, now have to look for others. Norway is a favourite because of their Sovereign Wealth Fund, a nice idea at the time. But what is the fund invested in? Other government stocks, say like Greece, Italy, Spain and Portugal?
With the Russian navy having a good look at Scapa Flow for reasons we can only imagine and nobody is telling there is another puzzle. There could be all that scrap metal that independence would make available. There may have been another quiet deal done already on a Rent A Navy basis.
The Russians could offer “protection”. As the Scots have been brushing up on their Mandarin to join the queue at the cash point of the Chinese economy they are being reminded of their proximity to the Baltic and a past trading and economic world forgotten.
India already has the UK steel industry more or less in its grip and an important role in London, so of the four BRIC countries that leaves only Brazil. If we need their support for the Falklands then this will come at a price. What else might they want? Assuming it is not instant coffee the chances are that it is financial.
The Brazilian elite, like nearly all the others, has their key assets and major fortunes tucked away in tax havens, possibly with a disproportionate amount in UK connected ones and their links to The City.
Just how important this money is to the slushing of funds round our financial institutions, helped along by Bank of England easing is not known to most of us, only a select few.
The Great British and Irish Boot Sale has begun and they are queuing at the gates for miles, or in The Republic, kilometres.