The Storm Cone by Rudyard Kipling

Like most nations, we in the British Isles have a collective wisdom that derives from national identity and history. In the case of Great Britain, part of this is our long seafaring tradition. Rudyard Kipling captures some of that wisdom in his 1932 poem 'The Storm Cone'.  

As the euro zone storm continues to build, we should remember that the financial crisis blowing in from continental Europe will not recognised national boundaries any more than an Atlantic storm will stop when it reaches the English Channel.  All we can do is draw on the wisdom, insight and strength so brilliantly captured by Kipling.

This is the midnight-let no star
Delude us-dawn is very far.
This is the tempest long foretold-
Slow to make head but sure to hold

Stand by! The lull 'twixt blast and blast
Signals the storm is near, not past;
And worse than present jeopardy
May our forlorn to-morrow be.

If we have cleared the expectant reef,
Let no man look for his relief.
Only the darkness hides the shape
Of further peril to escape.

It is decreed that we abide
The weight of gale against the tide
And those huge waves the outer main
Sends in to set us back again.

They fall and whelm. We strain to hear
The pulses of her labouring gear,
Till the deep throb beneath us proves,
After each shudder and check, she moves!

She moves, with all save purpose lost,
To make her offing from the coast;
But, till she fetches open sea,
Let no man deem that he is free!

Good Luck and Best Wishes to you all.
Will

Six of one, half a dozen of the other

One of the things that most annoyed me about the labour years, was Gordon Brown's tax on the dividends paid to pension funds.  It was the previous conservative government that first breached the principle that pension fund earnings were untaxed, on the basis that the pension once paid is classed as taxable income.  It was however Gordon who drove a coach and horses through the principle.  I have not, and never will, forgive the labour party for taxing my pension twice; once while saving for it and again when receiving it.  In my mind that extra tax is going to support public sector pensions, which will be a lot more generous than anything I will ever receive.

Last night the conservative government voted to increase Britain's subscription to the IMF by 88% or £9.3 billion.  The conservatives claim that the increase was agreed by the last labour government.  Labour reply that the agreement was finalized only six months ago.  It speaks volumes that they are both falling over themselves to distance themselves from the decision; yet still £9.3 billion of our money will be spent supporting the euro.  A currency that we as a nation declined to join.  Under this government we have now spent over £22 billion supporting the euro, over £8 billion to bailout Ireland, over £4.5 billion to bailout Portugal and an increase of £9.3 billion to the IMF to support the Greek bailout.  In my own mind I am certain that the conservatives have not fought Britain's corner with anything like the vigour that they ought to have. 

The choice seem to be between

1. Spendthrift labour pouring money into public services for little or no improvement in the service while paying benefits to fit health people at the same time as employing immigrants to do the work that the benefit claimants should be doing.
2. Spendthrift conservatives pouring money into supporting the euro; so that Greek workers can retire at 50 instead of working to support their own currency.

I imagine myself in ten years time, retired (I'll be over 65 by then) on holiday in a miserable B&B in Clacton-on-Sea.  I sit watching the rain falling from grey skies into an equally cold grey north sea.  I dream about how nice it would be to holiday on a Greek Island with warm sunny skies and clear blue Mediterranean seas.  I sit in a taverna with a glass of retsina watching the luxurious yachts in the harbour, I can see the bankers and politician sipping cocktails, they discuss how to write off billions of pounds in outstanding taxpayer loans.  I turn and and chat happily with all those public sector holiday makers and Greek pensioners in their early fifties, we watch the sunny setting over the sea.  Perhaps we would talk about who to vote for at the next election.
 
Best Wishes
Will

Italy Wobbles

Italy has wobbled, she hasn't fallen but the currency and bond traders are watching and they know she wobbled.  If you listen carefully you will hear the sound of knives being sharpened.  There is a killing to be made.  

The power of the currency markets should not be under estimated.  Almost twenty years ago on 16 September 1992 (commonly referred to as Black Wednesday) Britain was unable to keep sterling above its agreed lower exchange limit measured against a basket of European currencies.  The British government were therefore forced to withdraw the pound sterling from the European Exchange Rate Mechanism (ERM). But only after HM Treasury had spent £27bn of reserves trying to avoid the inevitable withdrawal.  In just a few days George Soros, the most high profile of the currency market investors, made over 1 billion US dollars in profit by short selling sterling. The German government after first agreeing to help sterling failed to give the promised support. 
Taking on the combined wealth of all the euro zone economies will not be as easy as taking on the pound sterling but the euro has a fatal flaw and is badly wounded.  The markets are powerful, greedy and merciless, they will be patient and wait for the right moment but sooner or later they will strike; it will not be a pretty sight.

Best Wishes
Will