Skip to main content

Doom and other financial hiccups

I notice that, as Sterling hits a new low against the Euro, that Ambrose Evans Pritchard is now predicting 1929 is the benchmark to measure the likely fallout of the credit crunch.

Now, I am starting to think that Ambrose is beginning to sound like the boy who cried wolf a bit. I do not underestimate the scale of the emerging problems- as I have said before, the scale is truly enormous. However Evans Pritchard continues to add in his view that the Euro will collapse and much of the European Union with it. In fact, I think that the fall of the British Pound is a good thing- it helps make British products more competitive in selling into the European market. As for the US- the fall in the Dollar is already helping to correct the dramatic financial imbalances that have emerged over the past decade. This does not mean that either the US or the UK will escape recession, but neither does it mean that the problems are of the same order of the Japanese deflation of the past decade and a half (and even if they did, the Japanese are not exactly starving on the streets).

Yet again it is the mono-mania of the anti-Europeans that is removing all sense of perspective. There are problems, but these are not black and white issues- and the shades of grey can still leave plenty of room for very positive outcomes too.

Many will greet 2008 with pessimism, I do not- I am realistic about the positives and the negatives. I am not blind to the faults of the Eurozone, but neither do I ignore the advantages. As the Euro continues to climb against Sterling, we are hearing precisely the same predictions of doom as we heard when it was falling- and the ups and downs of currency markets are very poor indicators of fundamental prosperity.

Comments

Popular posts from this blog

Post Truth and Justice

The past decade has seen the rise of so-called "post truth" politics.  Instead of mere misrepresentation of facts to serve an argument, political figures began to put forward arguments which denied easily provable facts, and then blustered and browbeat those who pointed out the lie.  The political class was able to get away with "post truth" positions because the infrastructure that reported their activity has been suborned directly into the process. In short, the media abandoned long-cherished traditions of objectivity and began a slow slide into undeclared bias and partisanship.  The "fourth estate" was always a key piece of how democratic societies worked, since the press, and later the broadcast media could shape opinion by the way they reported on the political process. As a result there has never been a golden age of objective media, but nevertheless individual reporters acquired better or worse reputations for the quality of their reporting and

We need to talk about UK corruption

After a long hiatus, mostly to do with indolence and partly to do with the general election campaign, I feel compelled to take up the metaphorical pen and make a few comments on where I see the situation of the UK in the aftermath of the "Brexit election". OK, so we lost.  We can blame many reasons, though fundamentally the Conservatives refused to make the mistakes of 2017 and Labour and especially the Liberal Democrats made every mistake that could be made.  Indeed the biggest mistake of all was allowing Johnson to hold the election at all, when another six months would probably have eaten the Conservative Party alive.  It was Jo Swinson's first, but perhaps most critical, mistake to make, and from it came all the others.  The flow of defectors and money persuaded the Liberal Democrat bunker that an election could only be better for the Lib Dems, and as far as votes were concerned, the party did indeed increase its vote by 1.3 million.   BUT, and it really is the bi

Media misdirection

In the small print of the UK budget we find that the Chancellor of the Exchequer (the British Finance Minister) has allocated a further 15 billion Pounds to the funding for the UK track and trace system. This means that the cost of the UK´s track and trace system is now 37 billion Pounds.  That is approximately €43 billion or US$51 billion, which is to say that it is amount of money greater than the national GDP of over 110 countries, or if you prefer, it is roughly the same number as the combined GDP of the 34 smallest economies of the planet.  As at December 2020, 70% of the contracts for the track and trace system were awarded by the Conservative government without a competitive tender being made . The program is overseen by Dido Harding , who is not only a Conservative Life Peer, but the wife of a Conservative MP, John Penrose, and a contemporary of David Cameron and Boris Johnson at Oxford. Many of these untendered contracts have been given to companies that seem to have no notewo