Tag Archives: Sterling

brokenbritain added to blogroll


David Davis

I discovered them here. Useful advice to people like gordon brown, who has not only spent all the money including that which he borrowed, but still thinks he can issue more Sterling bonds.

Be of Good Cheer: Christmas Greetings from Sean Gabb


Sean Gabb

Free Life Commentary,
A Personal View from
The Director of the Libertarian Alliance
Issue Number 178
25th December 2008

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Be of Good Cheer:
A Christmas Greeting
from the Director of the Libertarian Alliance
by Sean Gabb

There being nothing else on any of the channels we can receive, my wife and I have spent much of the day watching the various Christmas greetings from religious and political leaders from around the world. These range from the vacuous (Her Majesty the Queen), to the impressively malevolent, so long as the volume is turned down (the Bishop of Rome), to the plain stupid (the Archbishop of Canterbury). I will not bother with reviewing these utterances. Instead, I will issue one of my own.

There is little doubt that 2009 will be a bad year in every respect where the politicians have influence. In England, we may have a general election before the summer. If this happens, and if the votes are fairly counted, or if the police decide not to arrest all the opposition leaders, Gordon Brown and his Labour Party will be ejected from office. In the past decade, he has helped turn this country from the incipient police state established by the Conservatives into a true police state that is tempered only by the mockery we are still permitted to heap on its projectors. It would be nice to see these people out of office – especially since they could never be re-elected, and the only thing they have ever really wanted in life was to be in office. But there is no reason to suppose the Conservatives would do much to prevent our final slide into totalitarianism. They have too many nasty inclinations of their own to break up the vast apparatus of control brought near perfection by Labour. Even otherwise, I suspect they are too stupid and lazy to know how to break it up.

I would ignore political developments elsewhere in the world – only it would deprive me of the opportunity to feel sorry for the Americans. I saw their President-Elect in a newspaper the other morning. Posing shirtless, he looked for all the world like one of the more raddled black boys you see selling their bodies in Leicester Square. I think this says more about the tone of his coming leadership than his choice of Hillary Clinton and the usual neo-con suspects to run his foreign policy, or his having accepted the full climate change nonsense. I have no doubt the BBC will cover his inauguration as if it were the Second Coming. It will be watched in much of England, even so, with laughter and contempt. President Obama will be rather like Tony Blair, but without the taste or restraint which Princess Tony will, by comparison, be shown to have possessed.

Since they too are influenced by the politicians, 2009 will be a bad year in most respects economic. I am not sure when the present cycle started, but interest rates have, for many years, been manipulated by the politicians below the level needed to balance savings and loans. The resulting additional demand for loans was satisfied by creating new money out of nothing. This enabled a gigantic speculative bubble that sprang a puncture last year, and that has now burst. Recession is the natural result. The structure of relative prices has been distorted. Investments have been made that are now shown to be unwise. There must be changes. The beginning of change is to allow interest rates to rise and unsound businesses to go bankrupt. The faster this is allowed to happen, the sooner we can return to prosperity.

Sadly, the political response has been to look for any scheme to save or replace the speculative bubble. Interest rates have been cut in England and America. The taxpayers’ money has been lavished on propping up the more unsound banks. Governments are threatening to inflate without limit. The stated purpose of this is to avoid recession. The result will be to make the recession longer and deeper than it needs to be. The politicians tell us that Keynes was right after all. Perhaps that is what they believe. More likely,  they have been taken in by the bankers with warnings about total collapse of the financial system, and are now responding like the victims of those Internet frauds run from Nigeria. I see the car makers have taken up the bleat for subsidies. I suppose they will be joined soon enough by the coffee bars and every other business that overexpanded.

2009, therefore, will be a bad year in the economic sense. If it is not, the pain will only have been delayed until 2010, when it will be felt with compound interest.

Here, though, is an end of my gloom. Much is bad now, and will get worse in the next few years. So long, however, as we can avoid a collapse into totalitarianism, the future is nowhere near so bleak as we are presently assured. Scientific and technical progress continue at the most wonderful speed. Sooner or later, there will be a renewed scramble to bring the results to market, and our lives will be still further enriched – and this time, I hope, considerably extended.

And there need be no relative decline of the West. We have been told for years – usually by self-righteous lefties, gloating over a fall that they assume they and their families can personally avoid sharing – that the coming economic giants of this century are China and perhaps India. This is as fatuous as earlier claims about Japan. If you type the phrase “population pyramids” into Google, the first result will be an American Government website showing how the population of every country in the world is, and will be, distributed by age. Until we know how to extend not merely life but also youth, the most dynamic people in any country will be aged between twenty five and forty five. In England and in America, this age group will predominate throughout the present century. In the Orient, every developing country is following the Japanese pattern of rapid ageing, followed by actual decline of population. The Japanese at least reached Western standards of living before they stopped having children. The Chinese may simply grow old before they get rich. After a fashion, China has been getting richer for about thirty years. We shall see how long that can continue once the majority of the population is over the age of fifty, and have neither savings nor children to support them in old age.

And China has been getting richer only after a fashion. About thirty years ago, its Communist rulers decided to turn the country into one big sweatshop, supplying the West on razor thin profit margins. They managed this by unlimited force. Ordinary working people in China have been ruthlessly exploited. With the banning of real trade unions, and with generally oppressive contracts of employment, labour there is free only in the nominal sense. Otherwise, costs have been socialised for favoured companies; and competitiveness has been maintained by an undervalued exchange rate. Look beyond those glittering towers built for the ruling class and its foreign partners, and you find endless and increasing misery.

Even without the start of demographic crisis, this may now be ending. We are told about the huge scale of the foreign currency reserves maintained by the Chinese Government and its banks – as if money were the same as riches. At least the mercantilists in old Europe wanted their governments to accumulate gold and silver. These could eventually be made into imports. What the Chinese Communists have done is to send us a continuous stream of manufactured goods, accepting in exchange a mountain of dollars – and at an undervalued rate – that are only worth anything if they are not spent. The moment these reserves are used for imports, or switched into more stable currencies, their value will collapse.

The Americans have had the main benefit from this fraud. But so far as the Orientals have had an insatiable hunger for dollars, and the rest of us have had no trouble in getting dollars to hand over, all other Western peoples have benefitted.

This brings me to the supposed crisis of our national debt. The English and American Governments have been borrowing for the past decade on a scale that would once have been thought reckless. Gordon Brown has already given this country the ratio of debt to output that we last had after the Second World War. This is without the further borrowing he has announced. The Americans are facing the same explosion of public debt. Some economists are telling us that we shall have to pay higher taxes for at least a generation to service these debts.

But this is not true. Our governments will borrow little from us – most of us having no savings to lend. They will instead continue selling bonds to the Arabs and the Orientals, and a few Russians if the price of oil recovers in time. The real value of these will then be inflated away.

None of this pleases me. Inflation harms us all, if in ways that are often hard to trace. But once the mess of the last boom has been cleared away, it will become plain that the chief victims of that boom were the very countries everyone thought were the chief beneficiaries. We shall have had our cheap notebook computers and our flat screen television sets. We shall have increased our wealth in the present, and increased our abilities to grow wealthier in the future. Those who screwed their peoples to the edge of destitution to make this possible will find themselves holding our increasingly worthless paper. Chinese growth will grind to a halt. India will break up. Eventually, the Arabs and Russians will learn that we have discovered some cheaper source of energy than their carbons. All we need to do is somehow bring our politicians under control, and we shall enjoy a most agreeable twenty first century.

And so I wish all the lucky members of my mailing list a Happy Christmas, and – if the coming year will be dreadful – the prospect of much better times to come.

NB—Sean Gabb’s book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, can be downloaded for free from http://tinyurl.com/34e2o3

Return to Gold … Do the Right Thing. Libertarian Alliance calls on British Government to restore the Gold Standard


Sean Gabb

 NEWS RELEASE FROM THE LIBERTARIAN ALLIANCE
In Association with the Libertarian International

Release Date: Friday 4th April 2008
Release Time: Immediate

Contact Details:
Dr Sean Gabb on 07956 472 199 or via sean@libertarian.co.uk

For other contact and link details, see the foot of this message
Release url: http://www.libertarian.co.uk/news/nr065.htm

Statement by the Libertarian Alliance on the Financial Crisis: Time to Return to Gold

The Libertarian Alliance, the radical free market and civil liberties policy institute, today issues the following statement on the present run of crises in the financial markets. This statement is prompted by the various calls made for closer regulation of the financial sector.

Libertarian Alliance Director, Dr Sean Gabb, says:

“The world may or may not be on the edge of financial collapse. But the present run of banking crises is only the latest consequence of the ending of the gold standard. Since 1914, and more particularly since 1971, the ability of governments to create unlimited amounts of fiat money has led to bubble after bubble, each one larger than before. Financial markets have become little more than casinos. Immense resources have been diverted into the promotion and management of speculation. All other economic activity has been subordinated to and therefore distorted by such speculation.

“The latest set of problems, brought on by foolish lending on property in America, is not a failure of the free market system. It is ultimately the effect of government monetary policies. The answer does not lie in some new set of regulations, which may prevent the next speculative frenzy. The true answer lies in the return to a more sensible and more honest set of monetary arrangements.

“We mean by this the return to a fully convertible gold standard.

“The Libertarian Alliance calls on the British Government to do the following:

* To order the conversion of all foreign currency reserves held by in the Bank of England into gold;
* To sell every reasonably marketable asset of the British State, to convert the proceeds into gold, and to lodge these at the Bank of England;
* To revalue the Pound, so that all claims on the Bank of England were equal to the gold reserve of the Bank of England:
* To impose on the Bank of England a legal obligation to pay all claims on it in gold, on demand and without limit:
* To impose on the Bank of England an obligation to do all within its ability, and nothing other than this, to maintain the new parity between the Pound and gold:
* To impose on all deposit receivers operating in the United Kingdom (unless explicitly exempted by contract) to pay all claims on them in gold, on demand and without limit;
* To make the directors or, if they are without the jurisdiction, the most senior management of all deposit receivers in the United Kingdom personally responsible for any failure to make such payments:
* To impress on any foreign government or central bank that might choose to fix a parity against the Pound that no assistance whatever would be given to maintain such a parity.


“We note that these measures would bring about first a severe devaluation of the Pound, and then a credit squeeze that deflated the value of real and financial assets. But this is what we seem already to be facing. A return to the gold standard would provide us with a stable financial system, and would tend to protect us against future bubbles, and would abolish the need for intrusive financial regulation.

“We also note that a fully convertible gold standard would make all money laundering laws unenforceable, and would severely limit the ability of the British State to finance its activities by the unlimited sale of bonds to the banking system. We would unreservedly welcome both these effects.

“We look forward to a Britain, and preferably a world, in which fiat money has become as unusual as state ownership of telephone networks, and in which paper and electronic money is a rare substitute for gold and silver and copper coins.”

END OF COPY

Note(s) to Editors

Dr Sean Gabb is the Director of the Libertarian Alliance. His latest book, Cultural Revolution, Culture War: How Conservatives Lost England, and How to Get It Back, may be downloaded for free from http://tinyurl.com/34e2o3. It may also be bought. His other books are available from Hampden Press at http://www.hampdenpress.co.uk.

He can be contacted for further comment on 07956 472 199 or by email at sean@libertarian.co.uk

Extended Contact Details:

The Libertarian Alliance is Britain’s most radical free market and civil liberties policy institute. It has published over 700 articles, pamphlets and books in support of freedom and against statism in all its forms. These are freely available at http://www.libertarian.co.uk

Our postal address is

The Libertarian Alliance
Suite 35
2 Landsdowne Row
Mayfair
London
W1J 6HL
Tel: 07956 472 199

Associated Organisations

The Libertarian International – http://www.libertarian.to – is a sister organisation to the Libertarian Alliance. Its mission is to coordinate various initiatives in the defence of individual liberty throughout the world.

Sean Gabb’s personal website – http://www.seangabb.co.uk – contains about a million words of writings on themes interesting to libertarians and conservatives.

Hampden Press – http://www.hampdenpress.co.uk.– the publishing house of the Libertarian Alliance.

Liberalia – http://www.liberalia.com – maintained by by LA Executive member Christian Michel, Liberalia publishes in-depth papers in French and English on libertarianism and free enterprise. It is a prime source of documentation on these issues for students and scholars.