Category Archives: Global Economics

European Energy Crisis – Angela Merkel’s Legacy with lapdog Tony Blair

Yet again Europe is in turmoil, how short their memories giving Russia the opportunity to expand their influence. At the heart of these woes, we have an insane energy policy legacy promoted by Angela Merkel leaving many dead and many others displaced in Ukraine and a country ravaged by the despotic Vladimir Putin. These events have revealed the true, arrogant, and naïve nature of the EU. Where would the UK be if still a member? Remember 2014 when Putin annexed Crimea, mainland EU was so shackled to Russia by the lunatic dependency for most of its energy needs the UK could not act to stop him. Even then Europe did not learn the fundamental truths of energy strategy – never depend on a pariah State for anything.

Prior to Tony Blair becoming prime minister of the UK the UK was energy independent. The UK had nuclear, coal, and gas & oil from the North Sea. But energy infrastructure needed upgrade as existing generating capacity was approaching the end of its useful life. Blair preferred to spend money on social projects to boost his populism. Many citizens recently expressed their resentment at Blair receiving a knighthood because he blindly followed George W Bush into Iraq. History will show that his domestic crimes were far more serious, impacting people for generations to come. Not least of his crimes he degraded the educational system in the UK labelling Colleges of Further Education and Technical Colleges as universities encouraging some 50% of students leaving secondary schools (whereas only some 24% are needed) to attend university for nebulous degrees that would not attract employment and burdening these students with onerous debts that shackled them from starting their lives on the property ladder. He also pandered to the people promising them cradle to grave financial security as an entitlement without any incentive to work leaving the Treasury bare when the Conservatives first took power even after selling half of the gold reserves and lucrative telecoms licences. But even worse he blindly followed Merkel into the Lisbon Treaty and her energy policy of not only continuing the Nord Stream project set up by her predecessor Gerhard Schröder (now Chairman of Gazprom) to provide gas from Russia to Germany but then starting a second pipeline Nord Stream 2 which the USA condemned as strategic lunacy. I wonder what reward she has been promised by Putin for surrendering the EU to his mercy.

Having engaged with Putin when he was a KGB officer my profile would be small man, big ego, and desperately in need of a legacy. He has brutally suppressed any opposition to his dreams of fame, brain-washed the public to suit his ambitions, and will not stop at the savage slaughter of innocent people in the pursuit of his legacy. However, it should be now clear to him that history will record his legacy as infamy in the ranks of Hitler and Stalin. But his ambitions were obvious years ago so why did the West, especially Germany and the EU foster his narrative? I must admit that in January I thought Putin was posturing for international recognition for the annexation of the Crimea into Russia as his legacy. I have yet to understand what caused him to flip into war with Ukraine as it is clear this mission was not well planned as can be seen by the losses to the Russian armed forces.

The UK had its hands tied as a member of the EU in 2014 when Putin annexed Crimea even though voices were loud and clear of what was to come should this annexation be allowed. But, just as today, Germany is so dependent on gas and oil from Russia they cannot risk offending Putin lest he closes the pipelines. The Germans today demonstrate their fear of reprisals with their limp offers of help to Ukraine. For the third time in 100 years the UK is leading the charge to bail out Europe because of the failure of Germany. I hope the EU member States crush the influence of the German elite in the EU going forward or, better still, collapse this il conceived union which many member States have paid dearly to support the incompetence of the likes of Merkel.

When Switzerland announced it would follow Germany in ending nuclear power as part of its energy mix, I explained to a Swiss Federal Councillor the lunacy of sacrificing its energy sufficiency which would result in consumer energy prices doubling in just two years. Thankfully they reversed this policy. Today my projection on pricing is more than validated.

What confounds me is why Merkel originated Nord Stream 2 when a far cheaper, more strategically astute solution was available. In 1998 I was engaged to structure the financing of the development and production of onshore oil & gas reserves in Azerbaijan for which I needed a credible long-term offtake agreement having previously structured the first international public financing of oil & gas development and production for Russia and thus understood the risks involved. My proposed strategy was to pipeline the gas to Constanta in Romania, and then continue the pipeline under the River Danube all the way into Central Europe. Easy, out of sight, and significantly cheaper. Dual sourcing is always far superior to all eggs in one unreliable basket. Now the Chinese have control over the Azerbaijan gas.

I hope the Green lobby, especially in Germany, learn from the spilt blood of the Ukrainian people that mankind does not have the illusionary attributes of King Canute. Climate change is a fact of life on this planet. Every time some young activist with little or no understanding of the world approaches me to insist I take climate change seriously I ask them to answer one question. ‘If we were standing having this conversation on this spot some 10,000 years ago, we would be standing on some 10m of ice. Where did it go? In our more recent 4,000-year history how many ancient cities are now under the sea?’ As the industrial revolution is less than 250-years old this question always ends the conversation. Whereas I have strong views on pollution, especially in our incredible oceans, I have heard no reasonable argument to suggest that man adds much to climate change. For example, the moon is likely to have more impact on our climate over the coming 6-years than mankind as it wobbles its way to its new orbit. And, as for methane emissions, do these activists understand anything about the Bermuda triangle, or the structure of the world’s continental shelves? Full of methane just waiting to escape into the atmosphere in vast quantities as witnessed before the cameras in the BP accident in the Gulf of Mexico a few years ago. Carbon digestors exist today but who will pay? The solution to particulates in diesel existed in 1994, and thus Governments pushing the switch to diesel engines, but the solution would force Governments to reduce duty on diesel because of the higher cost to produce. Instead of 0% sulphur content (the source of particulates when burnt) politicians throughout the EU settled for 5% sulphur. Let not a little pollution get in the way of tax revenues. Electric cars is another diesel catastrophe if only the people will open their eyes, and stop listening to so-called ‘experts’ – the most degraded word in the English language in the past 30 years. As has been proven during the Covid pandemic scientists should never be allowed to drive policy – but neither should inexperienced politicians with little or no understanding of the real world. In any event, money and greed is by far the largest polluter on this planet.

You might ask why I have yet to criticise the UK Conservative Government. The UK could, and should be energy self-sufficient. An astute Government would also ensure that the UK is not subject to market pricing for home-grown production as in the USA. However, David Cameron dithered over replacement of our base load generation. Teresa May sold the UK down the river to the EU and added insult by creating law to make the UK carbon neutral by 2050.

Boris Johnson has forgotten Conservative values and cowered to the green agenda leaving our base load requirements in jeopardy and listening to lunatic activists regard oil, gas, and coal. However, a Labour Government would fare worse.

 I hope this current energy crisis is a total wake-up call to the current UK Government that 2050 carbo neutral is only an aim, all other energy requirements being a priority. The UK must activate all North Sea assets, ensure control over pricing within the UK for new fields with priority supply to the UK, start fracking immediately to cover the short-term gas needs, re-activate any moth-balled generators needed including coal, and mine any required coal, i.e. return to energy self-sufficiency as quickly as possible. How many people know that the UK has substantial gas storage facilities, some owned by Centrica and the other by EdF. From what I can glean the Government would not support Centrica in the maintenance of these strategic reserves, and EdF emptied their vast facilities because of possible fracking in the region. Thus all of the UK’s strategic gas capacity was empty in December. I also understand that the UK is now supplying gas to the EU to keep them afloat.

The Green levy and VAT on energy bills should be immediately rescinded. The UK Government needs to accept that they cannot blame the inflation in the economy on commercial pressures – current inflation is almost totally inflicted by Government incompetence, with a nominal amount due to the Covid pandemic, but again much incompetence on the part of the Government regarding lockdowns. The nuclear reactors developed by Rolls Royce should be quickly installed whilst larger facilities are built. Rather than tax the energy companies regarding their enormous windfall profits from consumers encourage them to sell their energy to the UK network at a cost over production for UK sourced energy assets.

As a footnote I listened to a conversation last evening on GBNews between Nigel Farage and Dale Vincent, founder of Ecotricity. Dale’s rose-tinted spectacles sees a UK using only renewables for all its needs as the sun will always shine and the wind will always blow. And he proclaims this will be the cheapest solution. If this is true, why the onerous green levy on current energy bills? And, by the way, peaks in electricity demand will be controlled by removing civil liberties from the people penalising them for collectively putting on the kettle at half time during the Cup Final. Thankfully Nigel told him on air that he didn’t believe a word of it. We are doomed if the energy policy makers listen to such fantasy.

When all costs are taken into consideration wind turbines are not cheap, nor are they eco-friendly not least because the turbine blades require replacement every 2-3 years and are not recyclable. What do the eco-warriors suggest we do with them?

Renewables are a tertiary source of power generation and will only become a secondary source when there is a commercially viable battery storage capability which will certainly increase the total consumer price above gas or nuclear. Just as with EV cars once the battery is depleted it is useless until recharged. As a former nuclear scientist, I see no identifiable renewable that can generate 24/7 base load. The wind turbine I can see from my study window was turned off over the Christmas period for 2 days because the wind was too strong and gusty – these turbines have a limited operating window for wind speeds.

If we switch to thorium reactors (invented in the UK – see earlier blog) which are about a third the price and build time of uranium reactors we have a secure, safe source of 24/7 base load with no nasty decaying legacy – truly clean energy at an affordable price below renewables.

Advertisement

PERFECTION? – In the corporate World

Perfection – I was recently asked to use my corporate executive experience to comment on the pursuit of perfection in the corporate world from both a corporate and individual perspective.

I can’t remember throughout my long career ever hearing this word in relation to corporate goals or achievement whether individual or corporate. What is perfection in the corporate world and how would you measure it?

A definition of perfection is the action or process of improving something until faultless. And then they give an example: ‘as among the key tasks was the perfection of new mechanisms of economic management’. Isn’t this an oxymoron?

Sun Tzu describes the supreme art of war is to subdue the enemy without conflict taking all intact. Translating this into the corporate environment suggests you, as a corporate, are so good at what you do your lead in the market is so great that any attempt by a competitor to challenge your superiority could be futile and probably expensive. Great business leaders avoid expensive hostility; they achieve results by consent or superior tactics. He also suggests that attacking strength is not a good strategy. Nothing here suggests perfection as upon reflection in hindsight elements of strategy and tactical execution can always be improved.

Throughout my career the pursuit of excellence and superiority has been my goal. If these targets are considered a synonym of perfection, so be it, but in my eyes, they are not the same as perfection. Furthermore, individual stars are only as valuable as their backup. A superior goal is to coach all people to be a greater force as a whole, than the sum of their individual contributions.

I am not aware of any successful corporate that seeks perfection, they seek relative excellence and superiority.

As for individual people I struggle to define a corporate that measures performance in terms of the perfection of any individual, not even the CEO. Perfection requires boundless time and effort, a luxury in the corporate world where timing is everything. Thus, the success of a tactical move is not defined by its perfection, only its quality and timing.

In conclusion business is conducted between people. All people are analogue and imperfect. Anyone seeking perfection is probably delusional, and possibly scary.

Is Gutter Politics Really the Way of the EU

Since 1st January this year we have witnessed an implosion within the EU demonstrating its true character mainly due to the inept handling of the Coronavirus vaccine crisis by Ursula Von de Leyen, the EU Commission President, exacerbated by their determination to cause many problems for the UK as punishment for BREXIT.  In their arrogance they now find the realisation of their refusal to consider reform proposals by the UK in 2016. Now others see the creeping expropriation plans of the EU Commission as the German Supreme Court bans any further integration of Germany into the grand federal superstate program covertly facilitated within the Lisbon Treaty. I still hold the view that the arrogant nature of this plan will cause the EU to implode in the coming 12-months, especially as debt mounts with no credible means of repayment. If its true that the European Central Bank is looking for consumer and commercial deposits to prop its Balance Sheet the end is nigh.

The startling reality of the behaviour of the EU is the collateral damage inflicted on many millions, if not billions of people throughout the world in need of protection against coronavirus – since when has the EU ever shown any thought towards others. I speak of the gutter tactics to discredit the AstraZeneca vaccine because AstraZeneca did not succumb to the jackboot demands of the EU for supplies which, contractually they were not entitled to. And trying to block the export of vaccine made within the EU but destined for other countries will most certainly send shivers down the spine of external investors considering investment within the EU.

From the beginning of the disastrous EU vaccine strategy Brussels has deployed the most gross of gutter politics to cover themselves with the citizens of the EU who are now paying the price of inept decisions with their health, liberty, and even their lives. We recall the inept Ursula Von de Leyen lashing out at AstraZeneca for breach of contract where the contract clearly states best endeavours. Taking that contract to the High Court would have been a tremendous embarrassment for the powers in Brussels. And of course, the biggest embarrassment for the EU is the vaccine is the result of British research.

Initially we saw Germany attempt to offset the anger of its citizens by declaring the AstraZeneca vaccine unsuitable for the over 65s rather than admit failure to secure supplies. Now they have reversed this political sidestep to find they have seriously impacted public confidence of their people who now show a reluctance to have this vaccine. Supplies are still not remotely enough to service the EU so another gutter tactic to ostracize AstraZeneca for not complying with the demands of those who must be obeyed in Brussels has been launched throughout the EU in the form of the unfounded, and medically unproven scare that AstraZeneca can cause blood clots. The number of so-called cases is well below the normal incidence without a vaccine. This tactic has universally been denounced by scientists and medical professionals including the European Medical Council – the primary body within the EU.

Has anyone in Brussels considered the impact analysis of this tactic on its own citizens, and the collateral damage throughout the world, especially third-world countries in desperate need of a vaccine? This vaccine is by far the cheapest and easiest to transport thus the best choice for the developing world. But how will the vaccination rollout in these countries be affected by the gutter tactics of the EU? How many additional lives will be lost through lack of public confidence caused by inept EU politicians using such gutter political tactics?

OH, WHAT A LOVELY WAR WHEN THE ENEMY DESTROYS ITSELF. But, as history has shown, inept European wars have devastating fallout consequences.

For those with some medical knowledge I have a significant D-dimer reading of 650 ng/L (normal 0 – 285) and a heart condition needing surgery making me very susceptible to blood clots. I had my first AstraZeneca jab 4 weeks ago with no ill-affects whatsoever.

If you find this blog interesting, I would appreciate a thumbs up.

Is Populist Democracy an erosion of Democratic Values

Democracy is a given in the Western World – or is it? There is so much debate in recent times about democratic rights of various factions my head is spinning trying to comprehend how this word is being used – or abused.

If we go back to the fundamental meaning of democracy, we need to consider nation States where civil liberties and fundamental political freedoms are not only respected but also reinforced by a political culture based on democratic principles. If we consider the characteristics that should define a democracy, we will see freely elected government representation, respect of civil liberties, an independent judiciary, organised and elected opposition, all enshrined within the Rule of Law.

Being a member of Chatham House I was invited to participate in a session entitled ‘The Pandemic, Populism and the Democratic Recession’ during which Professor Larry Diamond from Stanford University in the USA outlined his argument that, especially during the past 20-years, democracy as we understand it is on the decline as Nation States throughout the World labelled as democracies remove ever more powers from and/or impose more authority over the people, currently Hungary and Poland within the EU. Whereas I fundamentally disagreed with his understanding of both the UK and the EU, both politically and economically, his view that democracy is in recession resonated. I also agreed that the rise of Modern Populism is a major factor in degraded political governance. But what is driving this degradation?

As a Christmas treat in 2004 I took my then 14-year old daughter to Boston and New York City in an attempt to give her some feel for life in the USA using the more sedate and conservative Boston as a marker against the cut and thrust of New York City. Whilst in New York we passed the CBS Building more commonly known as Black Rock. In the window there was a large screen stating, ‘United States of America – the oldest surviving democracy in the World’. This statement, for me, encapsulates the problems encountered by Americans throughout the World. I question whether the USA can consider itself a democracy when I see President Trump with connivance of the Republican led Senate impose their choice of person in the form of Amy Coney Barrett as a Supreme Court Judge for life. This can only be described as political stuffing of the Judiciary where such body is defined as independent within a democracy. Furthermore the turbulence over recent years where the whole Government apparatus becomes stagnant because the Senate and House of Representatives cannot agree a budget suggests the Political System in the USA is in need of structural reform to redefine and enhance democracy to better serve all the people before preaching their form of democracy to others. During my teenage years, segregation was still rife in the USA, and recent events stirring the Black Lives Matter upheaval suggests problems still exist.

Having close ties with Switzerland since the late 1970s I recall earlier this millennium being asked by a former Federal Counsellor of Switzerland to review their speech to an upcoming gathering of EU ministers considering the further integration into the EU of the former satellite states of the former USSR. There was a section in this speech lauding democracy, declaring Switzerland as a glowing example of a stable democracy. I could not help but point out that, in Switzerland, the Executive has total control over the judiciary with several recent occasions where the Federal Council has overridden judicial review to protect their own interests. I consider Switzerland as a Police State where people are declared guilty until they prove themselves innocent – hardly democratic. And they clearly have difficulties trying to govern in four different languages and associated cultures.

Countries such as Russia and China are accepted as undemocratic. We have witnessed both Vladimir Putin and Xi Jinping engineer their longevity in leadership amending constitutional rules as needed to secure their positions. Opposition is summarily dismissed even using horrendous methods such as Novichok agent with apparent impunity. China’s reversal of democracy in Hongkong with its latest dictum that MPs in Hongkong must be patriotic to Beijing if they want to serve demonstrates blatant disregard for the democratic freedoms afforded the people of Hongkong under the hand-over Treaty with the UK.

The recent elections in Belarus demonstrate that power corrupts leaving most of the former socialist States, even those classified as democratic, revealing the flaws in their leadership determined to retain authoritarian power by any means as the people become more aware of the rights they should enjoy as citizens. And, of course, we should not ignore the corrupt Governments in Africa whose leaders will use any level of guile and oppression to retain their corrupt power.

The citizens of the World are becoming more aware of the concept of democracy and seek to exert their rights within the accepted democratic framework. Authoritarian leaders who cannot easily apply direct oppression are seeking other means to retain their power. Knowing that many people have very little if any understanding of politics or economics they use Modern Populism as a powerful aphrodisiac. Knowing the affection of the people for pop artists and movie stars authoritarian leaders personify themselves as superstars worthy of the embrace of the people. Such charismatic leaders manipulate receptive voters by promising outrageous utopia whilst vilifying opponents using the ever-increasing wealth gap to decry the corruption and self-interest cronyism of the elite. Unfortunately, this works for enough voters to swing elections from capable Government into governments in name only. The star-struck voters get what they deserve, only realising their error when it is too late for 4 – 5 years, or as we are witnessing in countries such as China and Russia, for life of the leader holding the power. Constitutions are revised to cement the power base; democracy becoming no more than a word of convenient political rhetoric. This herald back to kingdoms where the leader has absolute power for life – no matter what.

The recent Brexit debacle in the UK sheds interesting light into this discussion. After the first Brexit Referendum the so-called Remainers – the voters who wanted the UK to remain part of the EU – made many outrageous claims that the Brexiteers were duped by Populism, being too uneducated to understand the issues. This view carried into Parliament where MPs from constituencies who clearly voted to leave the EU chose to ignore their local constituency vote instead voting to stifle the process. It took two further elections and the loss of a number of seasoned politicians and some younger opportunistic politicians to give Boris Johnson a mandate to leave the EU but many Remainers still argue that voters were casting their vote to prevent Jeremy Corbyn from leading a Government, not to leave the EU. Thus, we have a perplexing problem of voters not considered capable of casting a reasoned vote thus voting a Populist ticket, and the losers not accepting the outcome yielding a breakdown in credibility of the democratic system.

An alternate way of reading the last General Election in the UK is that Boris Johnson saw the opportunity to use the voters to disguise the Brexit issue within the Jeremy Corbyn ultra-left-wing Modern Populism and rely on the voters to see reason that the outrageous promises to the voters by a Jeremy Corbyn led Government would condemn the UK to the Dark Ages again. The results tend to suggest even in the more depressed, typically Labour stronghold constituencies of the UK the voters were savvy enough to know what they didn’t want both in Corbyn and the EU.  

One of the long-held complaints with the EU is the unelected but powerful European Commission. How can the EU declare itself founded upon democratic principles? The agenda of the EU is clear to ever more of its citizens. The UK has responded. Who’s next?

The current Presidential election in the USA could be described as Modern Populism versus Pragmatism but look how close the popular vote. If we apply the argument that many voters are not capable of understanding the debate one would expect the vote to be more pronounced in favour of Populism or Pragmatism. I don’t envy President elect Joe Biden who must repair such a polarised nation not least because of no clear Republican or Democrat majority in either House likely creating stagnation in policy agenda. And the losing voters will consider themselves robbed of victory especially if led by Donald Trump when his legal challenges fail.

Why is democracy failing when so many oppressed people in the World crave the liberty and freedoms it promises? I grew up in the aftermath of WWII where people relied on resourcefulness and resilience to survive and thrive. Communities worked together to rebuild their lives. Life was not idyllic, far from it, but an attitude was instilled that essentially meant that if you wanted to achieve you are responsible to make it happen. This attitude accelerated during what I call the Youth Revolution – the period between the 1966 World Cup and the landing of Neil Armstrong on the moon in 1969. Resilience and resourcefulness built in prior years now could be expressed in ways which changed the UK from an essentially conservative Government to a more liberal approach. Much wealth creation during this period across the spectrum of voters – class boundaries fracturing. People felt liberated and empowered to determine their own destiny in the World and demanded a more liberal framework by Governments.

This empowerment led to the people looking to exert their rights to whatever they could get for their votes building a now overburdened welfare state where an attitude of entitlement overshadows the need for resourcefulness among the poorer sectors. For example, could a political party now get elected on a ticket of much needed scale back and structural reform of the NHS to reflect need over want? Resourcefulness has morphed into indoctrinated entitlement. Resilience has morphed into insecurity with a new lexicon of mental disorders amongst younger people. Instead of the resilience to cope, people crumble. Having observed the depressing inability of people to cope with Covid-19 lockdown goodness knows what would happen if the lights went out for any length of time. Today there are still many families who have members who survived some 6 years of WWII in the shadow of bombing raids, losing loved ones, coping with rationing, and extreme workload to support the war effort. Has what I would term as Modern Socialist Populism created a complacency that quietly forgets the price paid for the freedoms they enjoy? Thank goodness for the emergence of heroes like Capt. Tom whose positive resilience injected a much-needed dose of reflection and goodwill.

However, we digress. Or have we? Creating unaffordable expectations among the masses in the pursuit of votes is destined towards a reality check. Corporate taxation at uneconomic levels, and personal taxes at levels significantly affecting quality of life are a formula for disillusionment, recrimination and ill-will towards the Government. Modern Populism hits the buffers. The Government coffers are empty. The people are disillusioned with Liberal Democracy and must pay for their sins with a period of Conservatism to rebuild the economy and reset voter expectations.

Is there not a note of déjà vu in this progression? I remember in the 1970s living under a widespread social engineering period by Labour Governments to support its popularity essentially bankrupting the country in the process requiring some 18 years of Conservative resets to prosperity. Then in 1997 Tony Blair and Gordon Brown emerged with New Labour on a Populist ticket spending a further 10-years of cradle-to-grave social entitlement engineering finally leaving the Government coffers empty in 2007 and so many young people disillusioned with their new but worthless university degrees and massive student debt. Another reset to Conservatism, austerity, and realism. The banking crisis did not help but the coffers were empty in any event. And, just as prosperity and the freedom from the EU were set to propel the UK into a new period of accelerated growth, we are hit with Covid-19. Should China have the moral fortitude to inject $2-3Trillion into the global economy to compensate for its failure to contain this virus we will most certainly see the UK thrive and prosper post-Covid-19 before the next General Election thus thwarting the Populists who will certainly make hay if recovery is still slow. In the event that China fails to stimulate the global markets but seeks to exploit the global economic weakness resulting from Covid-19 I would expect the West to reinvigorate the Marshall Plan along with a healthy dislocation from China from where three serious viruses have emerged in the past twenty years.

So what is different today? Before social media and the degradation of conventional press reporting to satisfy 24-hour news channels using their own brand of sensationalism to compete with online social media, voters could only derive information from a limited number of outlets. Social media has completely changed the dissemination of information; good, bad, or downright false or misleading. Unscrupulous entities from individuals, organisations, and even foreign powers can, in minutes, pollute social media platforms with lies, misrepresentation and complete fabrication intended to sway receptive victims to a desired outcome. I overheard a journalist from a broadsheet newspaper declare that the demand on her for articles each day meant that she had no time to fully research and validate her stories. But who, today, reads the second page corrections if indeed any are printed?

An analysis of which degradation came first would take another essay. But what is clear is we have a collision of culture and belief where national boundaries are blurred by new global organised activism built on conspiracy theories. We experience truth decay where facts no longer matter, and people lie with impunity, some merely to seek their 15-minutes of fame, but others with a more cynical intent. We observe more authoritarian countries attempt to curb access to social media. We also observe Western countries trying to marshal content but with little effect to date. One observation of this proliferation of false or il-considered content is the need of people to feel involved in this new-found freedom of expression which requires instant gratification regardless of consideration lest they be left behind. How many celebrities take the view that they need to be connected until the vitriol received causes them to retreat?

Thus, Populists and their cohorts can exploit the lack of any integrity in published works on any platform. If voters are not happy with what is, they can easily be swayed to the promised land. How such interference in democracy can be regulated will be debated relentlessly with little or no consensus throughout the World. Democracy could well become as toothless as the UN.

I put it to my readers that the degradation of integrity in politics has created a mistrust of democracy. This is a breakdown of social cohesion that amplifies by clever manipulators through social media platforms creating false impression, disenchantment, and social discourse. History repeats itself regarding the few people needed to stoke people into war with insane losses before sanity prevails. Does democracy need to follow the same cyclic course before people understand its values and limitations. It was Winston Churchill who remarked that democracy is the worst form of Government, except for all the others. Is it time to revisit the pillars of democracy, ensure that they are relevant, fully understood and implemented, and then guarded against abuse?

Should we bear the Responsibility for our Ancestors?

Two seemingly unconnected news stories last week found their one minute of airing amongst the sensational reporting from the G7 Summit, the continuing saga of the EU vs BREXIT, and the burning of the Brazilian rain forest. Although my readers would probably expect me to comment on the suspension of Parliament, I think these two stories have a chilling connectivity worthy of debate.

One story was the admission from the University of Glasgow that it took contributions in the form of gifts and behests towards the construction its Gilmorehill Campus between 1866 and 1880; probably derived from the slave trade. Although these announced reparations of £20 million are not being distributed to individual descendants of slaves it sets a disturbing precedent.

The second story relates to the significant rise in white supremacy/nationalism throughout the Western World in the past two years. These people have moved from the shadows of internet activity to violence on the streets including mass shootings. And their numbers are growing at an alarming rate.

There are now so many ethnic and religious lobby groups trying to rekindle the past in a blame game euphemistically aimed at some moral admission of wrongdoing, but with the ultimate intent on financial reparations for events that occurred generations ago. I take the view that I am not responsible for anything my father did without my involvement or consent, and I do not expect my children to be held responsible for anything I do without their support or consent. Therefore, why are we tolerating lobby groups looking for reparations on activities that occurred so many generations ago that it is only recently that online genealogy allows us to remotely track such ancestry? When do these people realise that nasty activities such as slavery have existed since the dawn of mankind, and still exist today in various parts of the world. The great historic monuments of the past relied on slaves to construct them. We can take a social view today that slavery should be eradicated, but we cannot go back in time and legislate for the past.

I’ve debated with someone from the Indian subcontinent about the need for the British to pay considerable reparations for activities throughout the 18th and 18th centuries – the days of the British Empire. I suggested that India thrives today on both the constitutional Government and the railway system left by the British. Without the extensive rail network built in the time of British occupation India would suffer the transport problems that we see in countries today such as Brazil. China is building a massive rail network because it needs it to thrive. What would happen in India if our Health and Safety Regulations were applied throughout the Indian rail network? The country and its economy would come to a standstill. Very often it’s mentioned that Cuba sits in a 1920’s time warp but India also lives in such a time warp, but the quality of the British engineering still prevails, as in Portugal.

As for contributions to the University of Glasgow what about contributions from the tobacco and sugar trade? Both of these goods are now considered detrimental to human health so what about the people who suffered harvesting such goods, and then the consumers whose health may have suffered? Indeed, the City of Glasgow was built on these trades so do we demolish Glasgow as an unacceptable relic of our so-called terrible past as with the desire by a radical few to demolish statues of large benefactors to other universities and institutions where their wealth was derived from such activities. What about if Facebook put up the £20 million being sought, but in 100 years from now Facebook is considered a scourge on society and everything connected with it should be deemed poison?

By far the most damaging problem caused by these ill-considered lobby groups is the fuelling of racism. This card has now been so overplayed that white people are afraid to use large parts of the English vocabulary lest someone interprets such language as racist. And politicians seeking any votes possible to pander to their need for power have even legislated against such language without serious debate about the consequences. We have coloured minorities playing the victim card in their attempt to seek some ideology of equality, or even supremacy. I would argue that white people have had enough of being made to feel guilty for the activities of their ancestors and the continual pressure of the racism card which together with political correctness have overstressed tolerance. And this leads me to the connectivity to the rise of white supremacy and nationalism. White people are being eroded of their identity, their culture, and their heritage. Fodder for groups who are at the extremes.

My view is that Governments and Universities need to slam on the brakes regarding ethnic and religious lobby groups; take a break from any further antagonistic legislation or reparations touted in the name of equality; and study the impact of existing legislation on the indigenous population. Has the University of Glasgow attempted to determine if any descendant of a slave has prospered from a degree from their august hallows? Statistically this is highly probable as some slaves where transported back to Glasgow. Whilst there remains a suggestion that people today bear some historical responsibility for the activities of their ancestors, we have a cauldron that feeds extreme supremacy and nationalism.

BREXIT: A Pragmatic Message to the EU

The intransigence of the EU, no doubt fuelled by the traitorous people of the UK attempting to overturn Brexit, now requires a firm, but British pragmatic approach. I would propose the following:

Ladies and gentlemen of the EU we find ourselves at an impasse that could lead to unnecessary harm to our great nation States. Today we are faced with the opportunity to show why our nations have survived great turmoil in the past, and that we have learnt the lessons of failure to achieve equitable relationships. During the past two years the UK has been more than conciliatory in its attempt to smooth an orderly exit from the EU. The imbalanced level of consideration provided to the EU has clearly caused irreconcilable division in the UK Parliament resulting in many difficulties for the UK Government. In order to achieve an orderly exit this must change. Having given great thought to what needs to be achieved before the 29th March 2019 I would agree that reopening the Exit Agreement would not achieve the required progress in the time remaining. I propose we bin it. Of course, there are aspects of this Exit Agreement that can amicably and equitably be transposed to a new agreement.

Let me be clear that we will not extend the leaving date as I’m sure that we all consider that enough time an expense has been expended on this project. Other distractions such as revoking Article 50, a further referendum in the UK, any reference to Norway plus, or Canada plus plus are not considerations on which the EU can rely. The only surety is that the failure to achieve a reasonable and, above all, equitable settlement before 29th March 2019 is that the UK will leave the EU and that the £39 billion demand by the EU will then be subjected to International Court of Arbitration scrutiny and ruling. Failure to agree an equitable way forward will certainly cause short-term economic turbulence throughout the member states and the UK Government could better apply the exit amount to smooth such turbulence within the UK economy. During this exit process the UK economy has shown itself to be resilient and indeed buoyant and I fully expect this to continue regardless of what happen on the 29th March 2019.

From the start of the leaving process the UK proposed negotiation based upon a Strategic Alliance. The EU rejected such proposal insisting that the divorce settlement be agreed before any future relationship. This has proven to be a failed approach. Now we must proceed with an inclusive agreement including a future trading relationship as proposed and submitted to the EU in March of this year. As we are looking to replace an existing trading relationship none of the usual procrastinated negotiation of trade deals is either desirable or necessary. We may have to agree to further refinement during a transition period, but this is the nature of the strategic alliance process. Importantly, within the existing proposal are terms that with the installation of additional electronic surveillance on the Irish, Northern Ireland border as proposed by HMRC and declared as workable by the technocrats in Brussels we can completely illuminate the most contentious issue facing us today; the backstop agreement.

No doubt you will resound with protestation that such an agreement cannot be achieved in the time available. We disagree. Most, if not all, of the required components are at our disposal. All we need is the essential component of any Strategic Alliance; the will and commitment to achieve an economic and political relationship in the spirit of friendship and co-operation, and above all of reasonable and equitable benefit to both parties. Any financial settlement will be fully subject to such parameters.

To the heads of the EU member States I would add the following invitation. Should no agreement be achieved and ratified by both sides before the 29th March 2019 then the UK is fully prepared to continue to trade with any member State on existing terms and give priority to such trade over alternate sources if delivery and reciprocity can be assured. Further political posturing will not solve this problem and thus we must each address the realities of no deal in regard to the best interests of the people we each represent.

Has Democracy As A System of Government Run Its Course?

 

In a speech in the House of Commons on 11 November 1947, Winston Churchill said: No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time. Since then democracy has shown itself as a far from perfect system in that the inherent assumptions are that every voter has the capability to understand the issues, and the people elected to deal with the issues have the appropriate experience and wisdom to conduct the majority view of the people. Recent elections throughout the World demonstrate that neither assumption is reasonable. The result is a range of governments derived from populist to unwitting authoritarian.

My attention was drawn to the breakdown in democracy in Europe during the ratification of the Maastricht Treaty, and later the Lisbon and Nice treaties, where various EU member Governments were unable to achieve ratification of these treaties on a free vote but were instructed by the Brussels apparatchik to continue to poll until they achieved the required result, i.e. undemocratic attrition.

In the UK we have two clear examples. The BREXIT referendum attracted the largest turnout of any election in recent times by percentage of votes, and numbers who voted, thus should be deemed to be compliant with the fundamental principle of democracy. Using the fundamental principles of democracy the outcome should be accepted by all, and the Parliament of the day thus mandated by the people to conclude the exit process. Yet the remainers, or remoaners as I prefer to call them, are so vehemently opposed to the democratic result that they continue to attempt to thwart the BREXIT process without any consideration of the damage that they inflict on achieving a good divorce settlement for both the UK and the EU. To these people I say that you have no regard for democracy, the history and future of the UK, and the turnout for this important vote, but are instead far too consumed with blinkered argument with little concern regarding the damaging consequences for the people who voted, and subsequently respected the outcome of the referendum. I can assure these people that if this referendum were to rerun the vote would be more overwhelming.

Who are these people who cannot accept a democratic majority, and why do they think that they can abandon the principles of democracy in favour of a minority? I noted during the Andrew Marr show last Sunday that Labour MP, Chuka Umunna, was stating that BREXIT is so important that it should ride above party politics or personal ambition of Government members but every sentence he uttered was both party political and promotion of his own ambitions. During this week he has furthered both by stating that Parliament should have a legally binding vote on the BREXIT deal before it can be ratified – yet another attempt to thwart the process, and thus the will of the people. What a hypocrite. For balance I can also identify a Conservative MP, Anna Soubry who caused eyes to roll on the Conservative benches in the House of Commons this past Monday when she continued to vent her vehement attack on BREXIT and her party leaders. If she does not understand the principles of democracy why is she in Government?

Then we have the devastating miscalculation of the recent General Election. Short-sighted and blinkered arrogance in the extreme.  My thoughts on reading the Conservative Party (latterly described as Presidential) Election Manifesto are already published. Why did no one with political clout in the Conservative Party face down Teresa May and alert her to the inevitable consequences of such a poorly considered manifesto? I can suggest that study of the ‘Art of War’ by Sun Tzu is required study by her in future campaigns.

Of course, Jeremy Corbyn understood such consequences and saw an opportunity to seize power. He used the rise of a populist vote, especially with younger voters more consumed in their smart phones than in the real world. He promised them anything for their vote even though it was clear from the outset that none of these promises were remotely deliverable, as per populist socialist governments in South America and Africa. His was a particularly exaggerated socialist agenda that had none of the subtle argument proposed by the likes of Tony Blair. This was blatant abuse of process with the certain outcome of bankrupting UK plc. But why did these voters not see the inevitable outcome?

Today Jeremy Corbyn sees himself as the socialist saviour and although verbally supporting the BREXIT outcome he is using it as a party-political football in an attempt to unseat the Conservatives to seize power for himself. For the remoaners who think that BREXIT will be bad for the UK economy I ask them to consider the devastating consequences of a Corbyn led Government. The centre left government under Tony Blair left the Treasury coffers empty (as with all previous Labour Governments since WWII) – but this will be nothing compared with bankruptcy as Corbyn pursues a left socialist agenda. Perhaps his followers should consider the irony in my past blog ‘General Election 2015 – A Sorry Tale’.

The BREXIT campaign was bruising but, from my dialogue with people, they understood why they wanted to vote as they did irrespective of the blindingly aggressive rhetoric from both sides. My view is that the politicians were so outrageous that their words became an incoherent noise. The doom-and-gloom merchants such as David Cameron and George Osborne hid behind rigged outpourings from the likes of OECD and IMF clearly geared to frighten voters, but subsequently found to be completely false and unfounded. The UK economy has prospered post-BREXIT, and the EU is beginning to understand that THE UK is not about to bail out Europe for the third time in the past one hundred years. Teresa May has offered what the International Court of Arbitration would likely deem as legally obligated under the Lisbon Treaty. Any more requires valuable reciprocity from the EU. The second largest contributor to the EU is obviously a real loss to them, but they had the opportunity to address the needs of the UK people, but chose in their blind arrogance, to ignore such needs. Now they want to put valuable trade for both parties at risk to continue to prop up a failed system which is blatantly undemocratic. My instinct tells me that there will be substantial turmoil within the EU countries if trade is not maintained with the UK. The interview with the Foreign Minister of Spain, Alphonso Dastis, by Andrew Marr last Sunday was very revealing as he clearly stated that the close relationship between the UK and Spain pre-dates the EU. He argued that seventeen million UK visitors to Spain each year plus some 750k of UK citizens choosing to retire in Spain is not something they intend to put at risk.

So, what does all this say about our current form of democracy. We have politicians who choose the ignore the majority will of the people. We now have far too many career politicians who clearly lack the experience and wisdom needed to execute their office. We have an unelected powerhouse in Brussels who have no regard for the will of the people when it does not concur with their agenda. We have multiparty systems in many countries that govern by painful compromise (rather than strong leadership). We have too many politicians who have little regard for the ability of people to think for themselves and thus govern by fear tactics. And we have an electorate who feel disconnected from the process and thus disinterested. Instead of democratically thinking about an issue in the interest of all, they concern themselves with what matters only to themselves. Is democracy about to implode, and what phoenix will rise from the ashes?

 

 

BREXIT – 120 days on

univestBREXIT – 120 days on

It has been some 120 days post-Brexit, so where do we find ourselves when measured against the doom and gloom of the Remain campaign. We have a new PM, Teresa May who appears clear on what Brexit means, discovery that global organisations such as the IMF knowingly misled the British people, even the principal architect of the Eurozone claiming that it is now a ‘House of Cards’, and churlish self-interests trying to scupper Brexit with no regard for the democracy that they claim to cherish.

It is really sad for me to see that, amongst a significant number of people spanning all classes, there are elements of the British character that do no justice to our heritage of the UK great explorers and inventors that shaped this World of ours. I watched in disdain the current and excellent TV costume drama ‘Victoria’ recounting the trials and tribulations of Queen Victoria who reigned during the Industrial Revolution as scaremongers, vested interests, self-righteous, and ‘not-invented-here’ jealousy tried to stop the introduction of the steam locomotive. Thankfully, Prince Albert saved the day. Even today I hear eco-warriors stating that the Industrial Revolution was the beginning of the end of mankind, but where would these people, or even the World be without trains. India thrives on the railways, whereas Brazil, without much needed rail infrastructure, has serious transport and thus economic problems – look at the speed of rail infrastructure development in China.

Then I am reminded of the Neville Chamberlain pacifist era before the second world war when Winston Churchill, with his worldly experience, could see the ambitions of Hitler but, in spite of his fine rhetoric, could not persuade enough people that we needed to prepare ourselves for the inevitable. Indeed, according to Boris Johnson in his captivating book ‘The Churchill Factor: How One Man Made History’, had the war been delayed by some two weeks Churchill would already have been hounded out of office!

We are told that we must learn from the past, but do we? During the referendum debate we had the David Cameron, George Osborne and Nick Clegg elite, all from privileged schooling, all career politicians with ideologies not supported by any worldly experience, and easily persuaded by more scurrilous and self-serving influences, preaching doom and gloom if we did not stay part of the EU project. They rallied any vested interest they could find including the IMF, the OECD, and President Obama – an embarrassing chapter for all of them. But history will not record any of them as good, let alone great politicians. David Cameron was clear in his Bloomberg address that if the UK did not get significant Treaty changes for the UK then he would vote out, yet like Chamberlain he returned from Berlin with a worthless piece of paper. He will be remembered as someone who readily changed his mind on substantial matters – not good leadership. But he has realised the errors of his ways and will fade quietly away. Osborne still finds occasion to try to placate his ego, and Clegg is now trying to rally support for a blatant counter-offensive to Brexit on the basis that people do not know what Brexit means. Let me assure him that the core ‘middle-England blue-blooded Brits’ that always save the day in times of need know precisely what it means – a clean exit from the EU in all respects, returning to a Sovereign State, just like most other countries in the World. As has been shown since Brexit, the UK is a major player in this World, and when we sneeze the World coughs. The EU needs the UK far more than the UK needs the EU.

So what has happened since Brexit. I would suggest that the most significant outcome is the clear demonstration of how the elite politics of today is so out of touch with reality, as is being played out in the USA today. What did go on behind closed doors that caused Cameron to accept that the UK should be sacrificed for ‘the greater good of Europe’? How many more times does the UK have to make significant sacrifices for Europe before Europe (mainly Germany) learns from it?

Let me take some words from a Telegraph article summarising a post-Brexit report from the IMF’s Independent Evaluation Office (IEO). This report goes above the head of the managing director, Christine Lagarde. It answers solely to the board of executive directors, and those from Asia and Latin America are clearly incensed at the way EU insiders used the Fund to rescue their own rich currency union and banking system. It states:

‘The International Monetary Fund’s top staff misled their own board, made a series of calamitous misjudgments in Greece, became euphoric cheerleaders for the euro project, ignored warning signs of impending crisis, and collectively failed to grasp an elemental concept of currency theory.

This is the lacerating verdict of the IMF’s top watchdog on the Fund’s tangled political role in the eurozone debt crisis, the most damaging episode in the history of the Bretton Woods institutions.

It describes a “culture of complacency”, prone to “superficial and mechanistic” analysis, and traces a shocking break-down in the governance of the IMF, leaving it unclear who is ultimately in charge of this extremely powerful organisation.’

The IEO Report states that since 2011 some 80% of all IMF lending was secretly used to support the Euro – not within the mandate of the IMF, and why Asia and Latin America are so incensed. Add to this the recent publication by Prof Otmar Issing, the first chief economist of the ECB and principal architect of the Euro, in which he states that the rules laid down for the Euro have been so debased by politicians that the currency, and thus the Eurozone, is but a ‘House of Cards’ waiting to collapse. Thus the desperate need to keep the fastest growing economy in the Western World, the UK, inside the EU, not least because of the unique capital raising power of the City of London – thus the lies to the British public by both the IMF and the OECD during the referendum campaign.

By far the biggest everyday loss to the EU is the City of London. With the City inside the EU it could claim to be the most significant financial power on the international stage. Without it the Eurozone does not even have the capacity to clear its own currency. The EU desperately needs the capital raising powers of the City. All of this posturing regarding passporting can be put into perspective by ING announcing last week that it is moving some 40 of its prominent traders from two locations within the EU to London. The worst case scenario is we will return to the days before passporting whereby, under the rules that international banks can only engage in business in countries in which they have a physical presence, banks will re-establish little more than a rep office through which transactions will be directed to London. As for moving banking to Frankfurt and/or Paris it should be noted that during my more than 35 years in the City this has been muted on a number of occasions. Paris is a non-starter for a number of technical reasons, and Frankfurt for even more including that no self-respecting high flier banker would consider living there.

As for corporate business I think that the recent announcement by Apple, the largest company in the World, that it is moving and consolidation its European headquarters in London, with all of the tax implications included, states the blindingly obvious – London is the gateway to Europe.

In a recent French Presidential Campaign speech by Nicolas Sarkozy he clearly stated that his first day in office (if elected) would be spent in Berlin (note: not Brussels) putting a new EU Treaty together that would address the concerns of the UK to encourage them to stay within the EU. He knows that there will be revolution in France if the farmers got even a whisper that tariff barriers were to be imposed on the UK.

In Germany we also have elections on the horizon. I am certain that the elite of Germany will resign themselves to the inevitable Brexit and thus quietly encourage election results that will ensure that no harm comes to the valuable existing trading relations with the UK.

The principle voices of Angela Merkel in Brussels, Donald Tusk, Martin Schulz, and Jean-Claude Junker, are synonymous with the problems faced by the EU. On the one hand they are stating that the EU will survive Brexit. On the other that are issuing instructions to member states to clamp down on rising nationalism.

The good news is that GBP has depreciated from its over-valued level by some 17% causing the UK Stock Market to regain some of its lost value over recent years, and provide the stimulus for the return for a much increased manufacturing base – jobs, prosperity, less dependency on imports. It should be remembered that Germany pushed through the Eurozone project to devalue the over-inflated Deutshemark by some 30% – great for Germany, but a disaster for most other members.

This devaluation will mean price increases to the UK consumer of imported goods and thus stimulate much needed, but controlled inflation reducing the need for QE and restoring interest rates to more normal economic levels. Some of this increase could be artificial as EU Governments put pressure on their major suppliers to increase prices to the UK as per the much publicised Unilever to Tesco increases which resulted in an embarrassing climb-down by Unilever. The real price increases will put upward pressure on wage demands – good for the workers who generate the wealth but contained to 2% pa or less wage growth over recent years, but not so good for fat executives who have enriched themselves with wage growth of around 10% pa during the same period. Also we can be competitive manufacturers and return to the days of ‘Buy British’. We can even return to eating our own delicious apples, currently outlawed by the EU to force import from the likes of France. The UK Government could easily buffer the increased price of fuel and energy (increases not EU related) by reducing, or indeed eliminating all of the absurd anti-competitive eco taxes on UK energy prices.

Trading with the World, including Europe will certainly not get worse, but is likely to improve. The intransigence of the EU Commission regarding trade with the EU is legion – ask the Americans. Our global relationships will prosper far more after the dust of Brexit has settled.

The issues we face today are the posturing, petulance, grandstanding, etc by both a dying EU and those die-hard remainers in the UK who have jettisoned democracy in favour of their own self-interests. This causes turbulence in the markets, no doubt exacerbated by the more influential remainers. The professional financial markets love such turbulence as they use it to generate good profits. The losers are the general public in whose lives the media relish creating uncertainty, and which impacts their cost of living resulting in understandable protest. How many media outlets have directly associated recent fuel price increases with Brexit? Oil prices are recovering from two years of global turmoil, and should settle around US$60 per barrel. The UK has a much needed currency devaluation regardless of Brexit. De facto prices will increase from their extraordinary lows over recent months regardless of Brexit. I can remember when oil prices were US$16 per barrel, and more recently US$120 per barrel – but neither to do with the EU or Brexit.

Brexit has not yielded doom and gloom, not even a technical recession. The UK is now projected as the fastest growing Western economy. Just as with the resistance to the steam locomotive in Victorian times it is time to ignore the doomsayers and grasp the opportunities that now present themselves so that, as with the proliferation of railways, the UK will again rise be a major and great player in this World in its own name.

 

2-weeks post-BREXIT. Where are we?

univest2-weeks post-BREXIT. Where are we?

The EU Referendum has raised a number of issues that show why this referendum was needed. During recent years politics has become too elite and detached from the people it is there to serve. A good shakeout is necessary, as is happening in the USA. BREXIT has triggered this process in Europe, and especially the EU. So where are we post-BREXIT?

Scare Story: The UK will suffer unprecedented political turmoil

This is true, but more in the EU than the UK. The reaction at the quickly convened emergency meeting of the European Parliament on the Monday following BREXIT resembled more a Third World bun fight than a rational First World debate. The exchange of insults and rebuke was extraordinary.

The UK political turmoil has shown that David Cameron lacks the qualities of a true leader. Having consented to a referendum on the basis of a reformed EU, which he did not achieve, a strategically capable leader would have returned from Brussels to announce his frustration with Brussels, and then overseen the referendum debate without expressing his own view, or that of the Government, ready to implement the decision of the people (democracy) thus providing the political leadership and continuity post-BREXIT that is currently so lacking. We have a political vacuum until we have a new leader – not good for confidence around the world.

This political vacuum has fuelled an anti-democratic minority to challenge the outcome of the EU Referendum result. It is interesting to note that these whingers obviously have the view that a democracy can only be democratic when the vote result concurs with their view. And these whingers include people like Richard Branson who, reportedly, saw some 30% wiped off his Virgin empire. The people have spoken and, with a larger turnout than your average General Election, the clear majority voted for BREXIT. In a democracy every citizen has the obligation to make themselves aware of the issue requiring a vote of the people, and to cast their vote accordingly. In this digital age there is no excuse for lack of information. The result is clear, so to the whingers – move on; we will flourish.

The positive result of this turmoil as we approach political summer recess is that the UK Civil Service has time to consider the optimal exit terms for negotiation with the EU, and a period of reflection by the EU machine. As I refine this blog I found an article in yesterday’s London Evening Standard written by Frank-Walter Steinmeier, the German Foreign Minister, in which he acknowledges that the EU elite have been indifferent to the voices of the people, causing great unrest. His solution – even faster political and economic integration. Will they ever listen?

Scare Story: The UK markets will collapse with pensions and quality of life in decline, and London will lose its status as the Global Financial Centre

Since the casino players, looking purely to make money from the volatility surrounding the referendum vote, have gone to sleep (when will the G7 address this global destabilising problem) the UK stock markets have stabilised, and indeed risen some 15% – a vote of confidence by investors, and good for pension funds. Adjustments will occur as the UK realigns itself; albeit the attack on commercial property funds is bizarre. Furthermore all talk of the capital markets moving within the EU has evaporated – the underlying covert motive by both the USA and Germany having been neutralised.

Our EU partners have not been so fortunate in that the BREXIT vote has caused much instability within the EU forcing markets down by as much as 15%. Although they have recovered some of these losses there is little evidence of full recovery any time soon. Italy is on the brink of a banking crisis, and there is much discontent within the EU. We have the USA regulators stating that both Deutsche Bank and Banco de Santander fail their stress tests and thus must increase capital if they wish to continue to trade US dollars. And of course VW are looking at considerably more substantial fines around the world. There is also reported a vote of no confidence for the EU to settle Euro transactions.

The doomsayers claim that the 10% fall in sterling against the US dollar is a major disaster for the UK. On the contrary sterling has been over-valued for some time damaging the ability of the UK to sell its goods overseas. As I write this blog sterling has recovered to 1.29. It would be better for the UK economy if this rate fell below 1.26 for a few months before the US Presidential elections will likely deflate the US dollar, pushing the value of sterling up again. I would remind the whingers that when Germany pushed for the introduction of the Euro the result for Germany was an effective significant devaluation of the Deutschemark which was much needed by the German economy to trade themselves out of the grossly underestimated cost of reunification – but at a real cost to all other Eurozone members.

Scare Story: The UK will require years to negotiate new trade deals with the Single Market and the World

There are a number of countries, including the USA and Germany, who want to be first to sign trade deals with the UK. There is much confusion being hoisted by the whingers about the single market. The UK does not need to be part of the single market for the same reasons that are frustrating the trade deal between the EU and the USA (who already trade more with the EU than does the UK). What we need is tariff-free trade deals with each of the member states who wish to engage with us. If Germany can do this then why not all other member states? The EU is fragmenting, and will need significant reform if it is to survive – including trade relationships. Regardless of the political rhetoric Germany will not risk the loss of its significant exports to the UK, and France will follow.

Scare Story: UK citizens will lose the right to freely travel, work and live in the EU countries

Today UK citizens need a passport to travel into the EU member States, and to return from them. Travelling freely within the EU countries is defined by the Schengen Agreement between member States and thus does not change anything for UK citizens. Moving to an EU member State may change, but looking at the number of EU citizens living in the UK reciprocity is the likely outcome.

Scare Story: The UK is too small and insignificant to go it alone

The UK coughed on the 23rd June, and the whole world sneezed, and is still sneezing. The UK has always punched well above its weight, and always will. London is the most important global financial centre in the world, and thanks to BREXIT, will retain this status. The EU loses one of its two permanent seats at the UN Security Council, and loses the global diplomatic reach enjoyed by the UK. As the fifth largest economy in the world the UK will find its feet over the coming months, and then flourish. The EU may not be so lucky.

 

A few days ago I listened to an interesting discussion regarding the total breakdown of the former USSR. The original discussions with Gorbachev revolved around the satellite states adjoining the eastern borders of Western Europe. However, as the Berlin Wall fell practically all members of the USSR declared their own freedom from Moscow. The view was that Moscow thought it could impose a homogeneous citizen unity across the USSR without any regard for the diverse nature and cultures of each nation state. Thus laws and regulations formulated in Moscow intended to create a homogeneous USSR caused resentment and unrest in these States – the response being typical Roman-type repression by Moscow, and ultimately downfall. Even the Romans knew better when they built their empire. What could the EU learn from this? Brussels relentlessly moves towards a United States of Europe without the consent of the people. Whether they use brute force, or financial pain they attempt to impose their will over each member State. The majority of people in the UK have said ‘NO’, and I fully expect others to follow.

A few weeks before the referendum vote I listened to an interesting debate by university students regarding the EU Referendum. They did not have guest speakers, rather relying on four students on each side of the debate to put their respective cases. The debate was surprisingly articulate. The audience was an estimated 100 students who, after the debate, overwhelmingly voted for BREXIT. This tallies with the young vote of some 25% of 18 – 24 year-olds. The triangle of knowledge for 16 – 24 year-olds (post-university) consists of students who have both the intellect and knowledge to analyse issues, students who have the knowledge but not enough intellect to fully appreciate the issues, and the remainder who prefer to go to the pub and watch football. The proportion of students who have both the intellect and knowledge average around 23%. Thus most of the 25% who voted for BREXIT are likely to have understood why. The other two sectors are likely to take the safe option to stay with what they know, or not vote. Therefore, I do not accept that the older (wiser) voters in any way let the young down. This is why the social engineering of the Blair/Brown Government sending 50% of the young to university was ridiculous, a waste of money, and did nothing for those who leave lesser universities with a degree and considerable debt but with no prospect of the suitable job that was implied was available for them.

I have also heard from the young that they wanted to remain in the EU to take advantage of the Erasmus program to study in Europe not realising that this program has little to do with the EU, but formulated as an exchange program between the universities, and includes universities in the USA. There is no possibility that this will end as a result of BREXIT, not least because of the significant number of European students who want to take advantage of the far superior red brick and CAT universities in the UK.

Just as a footnote, I chose to assess the views of the more canny Scottish voters regarding the post-BREXIT opportunist actions of Nicola Sturgeon, First Minister in Scotland, as I did before the Scottish Independence Referendum. The result then was a resounding vote to stay in the UK. A vote today between the UK and the EU would yield the same result. So Nicola, don’t waste your time as the people do not want your pathway, and I cannot imagine the EU entertaining yet another country joining on a net beneficiary basis in any event. The EU Referendum was on behalf of the whole of the UK, and the people spoke. Let it be. There is a bright tomorrow for the UK, so let us focus on the future together.

Is Putin really orchestrating the disintegration of Europe?

univestIs Putin really orchestrating the disintegration of Europe?

I have just finished reading a report on Bloomberg News titled ‘From Rape Claim to Brexit, Putin Machine Tears at Europe’s Seams’ by Arne Delfs and Henry Meyer citing incidents such as the ‘Lisa Affair’ in Germany as evidence that Putin is orchestrating the disintegration of Europe. This claim is worth a little exploration.

There is no doubt that the paranoia that is Putin sees a strong Europe as a direct threat to Russia, especially along its borders – Ukraine being a prime example. As Russia is not in a position to rapidly grow in spite of its energy reserves then his strategy must be to weaken his perceived enemy – classic Sun Tzu. We have also witnessed his desire to be seen as a major influence in the World with his intervention in Syria. So can he manipulate the disintegration of Europe?

The evidence presented in the Bloomberg report would suggest that he can, and indeed, is exploiting the weakness in the EU system. But is he a primary mover, or just having a little mischievous fun exploiting the clear fault lines in the EU model as retaliation for the embargo imposed on Russia for past mischief?

For anyone to exploit a large system such as the EU in this way there must be inherent weaknesses that can be exploited. We saw during the Ukraine crisis that the response by the West had to be tempered because of the overwhelming reliance on energy supplies from Russia by Germany (some 84% against the UK 4%). Why would a so-called major economy allow itself to engage in an energy policy which left them so vulnerable? Why should the West allow such an economy to influence its response?

What I have observed over many years is that every time a closed system tries to impose itself on other systems the oppressor fails, e.g. Germany on Europe, Russia on USSR. Even the Romans, during their expansionism, knew that that had to befriend the conquered and only impose changes regarding the needs of Rome in exchange for protection. They knew that they could not possibly hold the line of their empire if they tried to completely impose their will over the oppressed. Indeed, they used a philosophy that made it an honour to elevate the compliant to the status of a Roman citizen – probably the first peoples honours system.

Putin appears to be exploiting the clear divisions in the EU regarding the attempted imposition of the German way, albeit under the Brussels umbrella, on the other EU members. Of course, as with all such closed States, they believe that they have a successful model which they would like to share (impose) on others to allow them to indulge in the prosperity of their system. I have argued in previous blogs that there are inherently fatal flaws in the incestuous German closed system akin to Japan in the 1980’s and thus will ultimately fail. The nearest closed system to that of Germany within the EU is France albeit that the closed system in France consists of nationalised industries and banks – the topical example being EdF – and France is technically bankrupt.

But Germany has shown itself to be flawed, notably in its handling of the refugee crisis. Their double-edged sword of appearing to act with compassion as a cover for their desperate need for some one million skilled people to replace the erosion of its own workforce since 2012 through emigration to the likes of the UK, Switzerland, the USA, and Australia, has backfired. The Lisa Affair appears to be a ploy to further add to the woes of Angela Merkel as she loses popularity as the usually compliant German population now regularly take to the streets in defiance.

So, assuming Putin is playing games, should we be concerned? Politicians play games most of the time. Look at the upcoming intervention of the USA in the BREXIT debate. Is the USA really concerned about the UK, or their own influence in the EU for which they use the UK as their gateway? Would the USA ever consider surrendering any form of sovereignty to another nation to engage with it? I fully understand both the short-term geo-political and geo-economic consequences of a BREXIT – and it is not good. But everyone appears to be asking the UK to sacrifice itself for the sake of global stability. Why don’t these interlopers focus their concerns towards the mandarins in Brussels, and who could still save the day if vital EU reform is agreed? How many more times in history do the British people have to sacrifice themselves to save the World? If Putin wants to play games with Germany to accelerate realisation then so be it. If he is successful, the unintended consequences (on his part) might be the tonic that Europe so desperately needs.