[Politics] The way we were.
Feb. 23rd, 2009 10:06 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
davywavyEighteen months ago, shortly after he took over the reins, Gordon Brown looked at calling a general election to give him a mandate but backed off, instead saying that he wanted time to develop his 'vision for Britain'.
I don't know about you, but I'd rather he'd just told us that his vision for Britain involved the effective collapse of the banking system, a run on the pound and penury and destitution all round, and then put it to the vote to see if that was what we wanted.
Too much to ask for, I suppose.
It's odd to look back now and realise that I was predicting a crash four years ago. It rather gives the lie to people saying that a crash couldn't be foreseen; if an enthusiastic amateur like myself could see it coming almost half a decade ago, then it beggars belief that the person in charge of the economy couldn't, unless he was a complete imbecile who believed his own mindless propaganda.
Oh.
It's not like he wasn't warned by those in the know: the 2006 Bank of England Financial stabilty report was effectively subtitled "Oh my God, we're all screwed!", but that didn't appear to make much difference in governmental attitudes whilst the debt-fuelled boom continued.
Anyway, a few weeks ago, I decided to go back in to the stock market. This shouldn't be taken as meaning that I think we're back on the way to recovery; I actually think that any recent uptick in the markets is what's known as a Bull trap and that we've got a lot further to go yet. On that basis, I bought gold. Traditionally the 'safe haven' in times of trouble, this proves to have been a fairly wise move on my part as gold has gone up 15% since then.
Or rather, it hasn't.
Gold rose by about 3.5% against the pound last Friday (it's since slipped a bit due to profit taking), but it only rose about 2% against the dollar. Now, gold is interesting stuff. It's handy in some electrical components, but it really has very little intrinsic value beyond what value people place in it and the volumes of the gold in the world change by next to nothing on any given day. What this means that as an indicator of relative value on any given day, gold is an excellent yardstick by which to judge a currency and, as the day wore on on Friday and I watched the value of gold tick up, my thoughts slowly turned from pleasure at the value of my investment increasing and turned more to dismay as I started asking What the Hell has Brown done the economy today?. I didn't get 3.5% richer last Friday, you see. Instead, we all got 3.5% poorer as the value of the pound declined yet more. It's just that the little of my money which was in a fixed asset ratined it's value relative to the pound. You know that money you've got? It's worth less than it was last Thursday. This decline is incremental but ongoing. You probably haven't noticed yet, but you will.
I should have seen this coming as well, really. A Labour Government in this country has been a buying signal for gold for the last 50 years and it should have been obvious this was going to happen ages ago. I'll know next time.
It's odd, looking back on posts I made 3-4 years ago now, just how many people argued against me in support of Brown as Chancellor, saying that he was doing a super job of running the economy.
I wish, looking back, that I'd been proven wrong in my assessments of where we were going. I wish that the person who told me that Brown was doing a good job of running the economy had been proven right. Because, for all that I've made a bit of a short-term score on the gold markets, that's not really much consolation for the losses that I, and others, have made in the inevitable and entirely predictable slump that has happened.
Like I say, I wish I'd been proven wrong.
I don't know about you, but I'd rather he'd just told us that his vision for Britain involved the effective collapse of the banking system, a run on the pound and penury and destitution all round, and then put it to the vote to see if that was what we wanted.
Too much to ask for, I suppose.
It's odd to look back now and realise that I was predicting a crash four years ago. It rather gives the lie to people saying that a crash couldn't be foreseen; if an enthusiastic amateur like myself could see it coming almost half a decade ago, then it beggars belief that the person in charge of the economy couldn't, unless he was a complete imbecile who believed his own mindless propaganda.
Oh.
It's not like he wasn't warned by those in the know: the 2006 Bank of England Financial stabilty report was effectively subtitled "Oh my God, we're all screwed!", but that didn't appear to make much difference in governmental attitudes whilst the debt-fuelled boom continued.
Anyway, a few weeks ago, I decided to go back in to the stock market. This shouldn't be taken as meaning that I think we're back on the way to recovery; I actually think that any recent uptick in the markets is what's known as a Bull trap and that we've got a lot further to go yet. On that basis, I bought gold. Traditionally the 'safe haven' in times of trouble, this proves to have been a fairly wise move on my part as gold has gone up 15% since then.
Or rather, it hasn't.
Gold rose by about 3.5% against the pound last Friday (it's since slipped a bit due to profit taking), but it only rose about 2% against the dollar. Now, gold is interesting stuff. It's handy in some electrical components, but it really has very little intrinsic value beyond what value people place in it and the volumes of the gold in the world change by next to nothing on any given day. What this means that as an indicator of relative value on any given day, gold is an excellent yardstick by which to judge a currency and, as the day wore on on Friday and I watched the value of gold tick up, my thoughts slowly turned from pleasure at the value of my investment increasing and turned more to dismay as I started asking What the Hell has Brown done the economy today?. I didn't get 3.5% richer last Friday, you see. Instead, we all got 3.5% poorer as the value of the pound declined yet more. It's just that the little of my money which was in a fixed asset ratined it's value relative to the pound. You know that money you've got? It's worth less than it was last Thursday. This decline is incremental but ongoing. You probably haven't noticed yet, but you will.
I should have seen this coming as well, really. A Labour Government in this country has been a buying signal for gold for the last 50 years and it should have been obvious this was going to happen ages ago. I'll know next time.
It's odd, looking back on posts I made 3-4 years ago now, just how many people argued against me in support of Brown as Chancellor, saying that he was doing a super job of running the economy.
I wish, looking back, that I'd been proven wrong in my assessments of where we were going. I wish that the person who told me that Brown was doing a good job of running the economy had been proven right. Because, for all that I've made a bit of a short-term score on the gold markets, that's not really much consolation for the losses that I, and others, have made in the inevitable and entirely predictable slump that has happened.
Like I say, I wish I'd been proven wrong.
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no subject
Date: 2009-02-23 11:20 am (UTC)I digress though, I think you raise some really good points; I've never thought that Brown was a good chancellor. I'd always thought of him as the "credit card chancellor", who upon getting into office pulled out a big amex card and started paying for everything on it, making the minimum payment each month, because the value of his house (the economy) would always grow and he could sell the family silver if he ever had to pay it off.
I find it incredible that given the strength of the economy we had, the amount of growth, the strength of the pound, he managed to somehow avoid generating a budget surplus, or at least balance the books!
Could I have done his job better? Probably not. But the 2006 BoE report you mention was one of many, including a bunch from international organisations (IMF etc), that were written off by the Government on the basis of, "we're doing better than France".
You also don't mention that he routinely changed his own definitions so that the figures were always good (Like when an economic cycle starts and stops). Like the Home Sec and her flat, it's all done within the letter of the law and not the spirit.
Oh man, that's it I want to move to Canada :-)
no subject
Date: 2009-02-23 11:27 am (UTC)There's a lot more I could have said about Brown - indeed, it's often difficult to get me to stop - but the number of people who defended him for running up the largest budget defecit since Richard the Lion Hearted mortgaged the entire country to pay for the 3rd crusade never failed to amaze me.
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Date: 2009-02-23 12:41 pm (UTC)no subject
Date: 2009-02-23 12:42 pm (UTC)no subject
Date: 2009-02-27 10:00 am (UTC)no subject
Date: 2009-02-27 02:08 pm (UTC)no subject
Date: 2009-02-23 11:46 am (UTC)no subject
Date: 2009-02-23 11:53 am (UTC)no subject
Date: 2009-02-23 11:59 am (UTC)To my eternal shame, I did cite PFI, which I can only blame on being driven temporarily insane by trace chemicals in takeaway foods.
Still, it was the only thing in the entire post that I did get wrong, so I'm hardly invalidated in my position.
no subject
Date: 2009-02-23 12:34 pm (UTC)He ticked the city off with the railcrack renationailisation, and they took him to the cleaners with PFI. Should'a read his Macchiavelli - you absolutely do not rob people whose goodwill you will later rely upon.
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Date: 2009-02-23 12:35 pm (UTC)Given that Brown has so many bankers working for him, why did none of them point this out? Was it just because they hated him?
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Date: 2009-02-23 12:40 pm (UTC)QED.
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Date: 2009-02-23 12:10 pm (UTC)I don't think we will get an election now untill may 2010 :(
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Date: 2009-02-23 12:36 pm (UTC)I'm looking forward to living in a box and eating my shoes for three years to clear it. What about you?
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Date: 2009-02-23 12:41 pm (UTC)no subject
Date: 2009-02-23 01:07 pm (UTC)no subject
Date: 2009-02-23 02:36 pm (UTC)Need I mention Iraq, Zimbabwe, Election fraud, EU constitution...
He embarrasses me. Time he went.
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Date: 2009-02-23 05:06 pm (UTC)no subject
Date: 2009-02-27 10:01 am (UTC)no subject
Date: 2009-02-23 03:19 pm (UTC)Twelve years ago, they wanted us to join, as our well subscribed private pensions (remember those) would've underwritten the currency. Broon's spent them, and the GSP rules mean it would take about twelve years hard work repaying our state sector debt before we'd qualify for being allowed to help pay off the Spanish, Portugese, Irish, Greek, Italian...
I could go on. People I know with Euro savings are moving them to Germany, in anticipation of a split. Without any inside knowledge whatsoever, I wouldn't be at all surprised if European nations were commissioning artwork and ordering tooling to produce their own currencies again, on the 'off chance' the euro goes *snap*
no subject
Date: 2009-02-27 10:07 am (UTC)1) We, at least, can deflate ourselves out of a lot of debt, which the Euro nationals (legally, see below) cannot. This is stuffing much of Europe very badly right now.
2) I remember back in abotu Sept last year when John McCain was at his highest in the polls and Obama at his lowest, people were using this as evidence McCain was going to win. Piling into something at it's strongest ever point when you are at your weakest is not by any means a long-term recipe for stability.
3) I'd give even money that the Euro will not exist in its current form in 20 years. Several years ago, a number of German institutions quietly started refusing Euro notes printed in Greece, Spain and Italy as they believed those countries to be printing more money on the sly. We're already seeing a two-tier Frano-german/ Southern European currency and this is going to get worse before it gets better.
More on this:
Date: 2009-02-27 01:25 pm (UTC)no subject
Date: 2009-02-23 04:04 pm (UTC)My main peeve is that I was one of the prudent ones. I have always hated owing money and paid my mortgage back early. I've always had a savings buffer, never maxed out my credit card, put spare cash into pensions.
It all seems to have been for nothing. Gordon doesn't like savers and raided pensions via the interest tax to fund all those worthy things like the Iraq war, Millenium Dome etc etc.
And here's my doom laden prediction to counter yours. We're going to have a Food Crunch next and it will be within the next 4-5 years.
no subject
Date: 2009-02-23 04:35 pm (UTC)I think he resents people of an individualistic bent who refuse to play along. One might expect the massive state defecit will force the state to shrink, having exhausted available resources. The way unintelligent organisms are periodically culled in this way has been well documented.
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Date: 2009-02-27 10:08 am (UTC)no subject
Date: 2009-02-23 09:18 pm (UTC)It's already at a historic high. Even if the pound is soon going to be worth less than Zimbabwean toilet paper - and it probably is - I might be tempted to look for other value-retaining assets to invest in. A wheelbarrow for your loose change perhaps?
V
no subject
Date: 2009-02-27 10:02 am (UTC)no subject
Date: 2009-02-23 11:56 pm (UTC)People will predict the worst of all possible situations- short of the actual break down of ALL law and order we are not in the worst (cos lets face it- we will have martial law before that and martial law IS better than a total breakdown- so therefore we will not have the worst)...
Others will say its the end of the world (not in both India and China both of whom WILL post growth in their economies this year regardless of how annoying this is to the doom mongers).
But reading back what you wrote- i tip my hat- totally correct.
I would never have agreed with you at the time of course.
But then again, would it have been one of those 'I disagree with you in voice but in practice...?' moments we often have.
i have no mortgage.
I have NO debt.
The current decline in the economy is impacting upon me not one iota (admittedly I have no disposable income anyways- but still).
I face no foreclosures and I have no fear of debt (having seen and preempted this current crisis a few years earlier with my very own credit crunch based on being a temp worker for a year).
The real horror is... we look at Brown with awestruck horror... and yet those who OPPOSE brown's policies (the Germans for example) face internal pressures to COPY him... and the same horror from the people...
The truth is this- I do not care WHAT your political party is and I do not care WHAT you policy/plan is- everyone is going to blame our leaders and everyone is gonna get it up the butt. The end.
In fact the only question I have is this...
At my age, in my life- with no serious financial commitments to tie me down, with no wife or kids, or strong strings beyond my sister and mother to keep me here- do i REALLY want to watch the shallow, self-indulgent and venal British Middle Class throw a temper tantrum as they try and escape the fact that the reason we have all of this going on was because someone told us we can have something for nothing... that everything that is happening is because of base human greed- that blaming politicians and bankers is symptomatic of a horrendous state of refusal to see ones own guilt- and to hide their own guilt by blaming every bastard on Earth...
Why would I want to see ANY of that?
I am closer now to leaving this nation than i have ever been.
To the point of actively seeking work abroad.
One of the daily moans today said there was a fear of middle class anger and riots in the streets today because of the economic situation.
(smiles)
Bring it on!
bring on the mods of the middle class rising up because they will not get the returns on their second homes they imagined?!?!
I want to see our police do to them what they have done everyone Britain's REAL poor has rose up in anger at economic conditions- send in the police horses! If they start bringing truncheons down on the angry of Essex, I may stick around in this sodding country for a while...
But chances are ALL political parties will side with them and try their best to allow them have their say.
This nation DESERVES the government we got (same applies to the current Scottish administration- those poor bastard Scots- anyone want to imagine what is WORSE than NuLabour- look north).
We DESERVE the opposition we have.
This nation is is serious goddamn trouble and that has nothing to do with the economy.
Still, I intend to grow old here- I think it will be better in about a decade or so.
Its just the next ten years this is going to be a vicious mean spirited nasty nation of nasty jealous petty people who DEMAND to be listened to, but as always will have nothing to say.
Gordon WILL lose the next election.
But no one will actually be happy with who we have to replace him.
I am SUCH a happy chappy today! LOL
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Date: 2009-02-24 12:02 am (UTC)no subject
Date: 2009-02-25 04:18 pm (UTC)D
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Date: 2009-02-25 05:43 pm (UTC)H
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Date: 2009-02-26 08:02 am (UTC)I wonder if heroin holds its value in a recession?
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Date: 2009-02-26 09:24 am (UTC)H
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Date: 2009-02-26 11:39 am (UTC)no subject
Date: 2009-02-24 07:00 am (UTC)So were was the legislation preventing the irisponsable lending of money? where was UK.Gov when this should have been tightened down? I belive they might have been to scared to end the feel good factor and be seen as the party crashers telling people that something for nothing had to end.
no subject
Date: 2009-02-24 08:56 am (UTC)