Friday 13 June 2014

1746 And All That

There are many people saying many things about the financial markets and what is in play.  The small problem is that little of it is making much sense despite the valiant efforts of all the experts to indicate that some, if only minimal, process of logic is at work.

Money And Markets today takes us back to the good times of 1746 in a post on international bond markets.  This was the time of the War of the Austrian Succession that kept Europe busy between 1740 and 1748 (see Wiki etc.).

This conflict, now rarely to be even mentioned in schools or much elsewhere, was one of the 18th Century conflicts that was a World War in effect involving action in the America's and in The East. In North America it was known as King George's War and in India it provided the impetus for the creation of the early Raj.

One of the side shows was the attempt by Prince Charles Stuart to seize the British throne in 1745 that ran out of men, money and organisation in 1746 ending in the Battle of Culloden.  The Hanoverians and their supporters held on to power with the help of Hessian troops. 

If Prince Charles had been backed by Maria Theresa of Austria instead of the shifty French he might have had more luck, or to the point, more money.  But there was still the problem that Hanover was allied to Prussia, and King Frederick The Great.

The article also mentions 1789 as another similar year.  The French Revolution is the item that usually dominates history, omitting that George Washington became the first President of the USA.  Which of these developments, if either, was a good thing is a subject for debate.

All this being so, aside from other intriguing historical avenues to follow, we could be in for some interesting times.  The Governor of the Bank of England has said that sometime soon interest rates must rise 

It has always been my view that you could not continue to depress these for too long without serious distortions arising as well as other longer term problems.

The Coalition government, in line with the USA, Europe and others do not want this to happen because it will mean that they will have to address some awkward realities that will entail unpopular decisions at unwanted times.

So what will happen when?  Might it be under way already, or will the big shifts come along in weeks, or months?  It is unlikely to be many years, the stresses building up are too strong.

Where will the markets be then?


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