Friday, March 27, 2009
More Music ...
(and I see that the Who's Baba O'Riley is still filling dancefloors nearly 40 years on. There are mixes here. And here. And elsewhere. Some bearable, some dire. Imitation ... flattery.)
Friday Night Is Music Night
This guy was a management consultant. But it's good for all that. John Legend. The guy can sing.
A long while back I blogged inter alia on Pedro Gutierrez, aka Pete Terrace, King of the Boogaloo.
I'll see if I can get 'Do the Boogaloo' onto Youtube in the near future, but in the meantime - It's Boogaloo Time !
UPDATE - Done it. More boogaloo.
On a more depressing note ... I always wondered how ageing beauty, wonderful singer and hopeless smackhead Nico, on whom I have blogged here and here, got on in her declining, Manchester days hanging out with the likes of John Cooper Clarke. Nico - in the chip shop queue ?
Alas, it was all pretty damn sordid. From her last keyboard player and collaborator James Young's book, some excerpts. Not child or work-friendly - don't read while having your tea.
A Wee Post ...
Thursday, March 26, 2009
Inflating Our Way Out Of Debt
It has become apparent to commentators like Liam Halligan that the Great Deflation Scare of 2009 is, in his words :
"... largely a myth – an alibi for wildly expansionary fiscal and monetary policy concocted by Western governments and their media lackeys.
After all, where is deflation? Data released last week put annual US core inflation at no less than 4pc. So why is the Fed doing this, following the Bank of England's lead? Because the real solution – forcing banks to face the music, while rescheduling massive private and public debts – is too politically frightening for our so-called leaders to contemplate.
A decision has been made, but not announced: we'll inflate away our debts instead"
Media lackeys ? That's a bit strong. Anyone in mind, Liam ? Robert Peston's been waving the spectre of deflation for some time - as has the entire BBC news output.
I invite readers to study the evolution of Tuesday's lead BBC news story, from "Deflation risk as prices to fall" all the way through to "Surprise hike in consumer prices". Bloggers like CityUnslicker and Alice Cook were far more on the ball than the mainstream media.
It turns out that the only component of inflation to fall is mortgage costs - completely under the control of HMG/BoE. Everything else is going up. The only deflation is caused by the Government - and then they've used the spectre, aided by their "media lackeys", to start up the printing presses. Peston's December comment that "The US Federal Reserve and the Bank of England regard the great threat right now as deflation" remarkably ignores the parallel appreciation of the dollar and depreciation of the pound. In David Bowie's immortal words "This is not America".
To be fair, the inflation's caused by HMG too. The weakness of the UK economy, the government's massive and increasing deficit as tax receipts collapse, the fact that they spent in the good times and have nowt left for the bad, not to mention the announcement that the presses would roll - these have devalued the pound by some 28% since last summer. It's this that is driving inflation, given that we import a lot more than we export.
We're actually 1.2% above the BoEs official (albeit fiddled) inflation target of CPI at 2% - so they should be raising interest rates. I wonder why we're not ? And RPI stood at 0% in 1960 - did we start up the presses then ?
But printing cash makes logical sense (from Labour's perspective). They won't/can't stop spending - I'm sure Polly Toynbee would argue that the State is needed more than ever in these hard times. Just like Mugabe's soldiers, the key client groups need paying. Tax receipts will continue to fall. The pound will really take a hit, and HMG won't be able to borrow, if they run an even greater deficit, as even Mervyn King has warned. Where else will they get the money from ? I really can't see anywhere.
I was expecting the FT to fall to maybe 2500 this year - but since then it's risen from about 3400 to nearly 4000 as Brown and Obama print away. Whether this is a bear rally and prices will resume the downward trend is yet to be seen - but there can be little doubt that all this newly-created dosh will in the long term cause asset prices to rise again, and my pension to be devalued, as the bubbles are reflated. It's all a question of timing. When will inflation kick in ?
(a shorter version of this was posted yesterday at Biased BBC)
Monday, March 23, 2009
What's Been Going On, Then ?
HMG's plan is to deflate away the value of outstanding debt, devaluing fixed incomes (like pensions) in a transfer of wealth from savers to debtors (and to governments - after all, they own the presses). They're aware that too much borrowing and not enough saving created the mess in the beginning, but in the interests of keeping the show on the road they've reluctantly decided that these habits must be reinforced rather than curbed. The collapse of asset prices is such that the bubble must be reinflated.
When the markets saw what Labour were doing, they devalued the pound. What's really scary is that the Swiss - of all people - have been selling off Swiss francs to drive down the value of their currency - while the US have followed Gordon to the printing presses.
The Swiss example wasn't too bad, although surprising - a competetive devaluation. If all countries do that, the net result is pretty much zero. But if all countries start up the presses, the inflationary implications are that it's time to get out of cash and find some asset - any asset - which will hold value. Shares, gold and oil all rose on the news of the US printing.
Obama seems not to have a grip on the crisis - admittedly, neither has anyone else. The bail-out is turning into the biggest pork-barrel in US history.
President Obama still enjoys the popularity that comes with not being George Bush, especially in a city top-heavy with Democrats. But his initial response to the global calamity that he found on entering the Oval Office has not inspired popularity’s more sober elder brother, confidence. Large constituencies, notably business, are voicing their scepticism openly. The President’s much-vaunted $787 billion stimulus package is being widely interpreted, even by some of those (such as Warren Buffett, America’s second-richest man) who openly supported Mr Obama for the presidency, as a serious failure. And we are only just past the first 50 days.Mr Obama is lucky that his Republican opponents in Congress are disorganised, incoherent and without ideas of their own.
The big question from a purely selfish point of view is - will there be a window of opportunity between now and inflation kicking in ? When prices are still falling and cash still has some value ?
I've been reading Paul Kennedy's The Rise and Fall of the Great Powers over the last week or two :
It's not exactly rocket science. Countries with a military clout greater than their industrial base warrants will in time lose that military clout. Countries with a hefty economic base will find it easier to develop military clout. And (as applies to individuals as well), if it can be done, it often will be done. It's a long time since Cheng Ho's fleet sailed the Indian Ocean - I just have a feeling I may see his successor admiral in my lifetime. I was thinking that as I assembled my son's new Argos corner desk for his homework last week - bolt-together veneered chipboard from China.
"he provides a straightforward and persuasively argued thesis: Great Power ascendency (over the long-term or in specific conflicts) correlates strongly to available resources and economic durability; military "over-stretch" and a concomitant relative decline is the consistent threat facing powers whose ambitions and security requirements are greater than their resource base can provide for"
"whose ambitions and security requirements are greater than their resource base can provide for" - Afghanistan, anyone, as our soldiers continue to be blown up in under-armoured vehicles ? Iraq ? What's scary is that the US is also becoming such a nation - and, like us, they've chosen to keep the existing, declining system going - it's the rational short term thing to do.
As I'm continually pointing out, when an economy declines, financial hegemony will move on. Florence and Antwerp are no longer the capitals of world banking.
One other nice little quote from the book, which is apparently taken from C. McEvedy's Penguin Atlas of Recent History. Particularly relevant in the light of Boris Johnson's illegal immigrant amnesty plans (he also wants to keep taxes low for high earners). He's talking about the late Austro-Hungarian Empire :
(For most European Great Powers) a majority of the citizenry shared a common language and religion. At least 90 per cent of Frenchmen spoke French and the same proportion belonged at least nominally to the Catholic Church. More than eight in every ten Prussians were German (the rest were mostly Poles) and of the Germans 70 per cent were Protestant. The Tsar's seventy million subjects included some notable minorities (five million Poles, three and a half million Finns, Ests, Letts and Latvians, and three million assorted Caucasians), but that still left fifty millions who were both Russian and Orthodox. And the inhabitants of the British Isles were 90 per cent English-speaking and 70 per cent Protestant. Countries like this needed little holding together; they had an intrinsic cohesion. By contrast the Austrian Emperor ruled an ethnic mishmash that must have made him groan every time he thought about it. He and eight million of his subjects were German, but twice as many were Slays of one sort or another (Czechs, Slovaks, Poles, Ruthenians, Slovenes, Croats and Serbs), five million were Hungarians, five million Italians and two million Romanians. What sort of nation did that make?
The answer is none at all.
Have a nice day.