As Black Country football-radio legend Tony Butler once said of the Press, "They hunt in packs." Interviewed some time ago, ex-Private Eye's Richard Ingrams reflected that he used to relish going after public figures but now he would read an exposé and think, "Poor old So-and-So's for it this time."
This time, it was the fat lady in a funny dress. And there was Lynn Alleway, doing a Louis Theroux "friendship" number on her. Look at how her old acquaintance from ten (yes, ten!) years ago had let the kids down!
"Camila continued to be the person Annie relied on for absolutely everything. She's vulnerable, and my worry is, what's going to happen to her now? In the world outside, the tabloids were unearthing more damaging stories. Some seemed to be nonsense... others I couldn't ignore..." (49 mins on)
Oh, how the presenter cares! Oh, my! Oh, I!
For of course, this was a story, and a story has to be shaped.
"Camila, what is going on? I... I'm feeling uncomfortable. [...] Could you not have found another house, without a swimming pool?"
There it was, a rented thing the size of a BBC producer's bathtub. Any smaller and the panto princess could scarcely have got in. (Not, by the way, that it was for her: it was a Kids Company facility.)
"Camila has always had her own moral code. She considers herself primarily accountable to the children. But for me personally, everything had changed." (53:53 on.)
Oh, the sadness as the scales fall from a loving pal's eyes!
Mismanagement... But as Camila said, they had always wanted cash reserves.
"But I also, Lynn, don't want to be twisted into a narrative that isn't the real narrative," said the founder.
Yet the programme-maker must speak out, her poor heart is so wrung: "What's so upsetting... is thet... all of this stuff... is just overshadowed now."
Yes, Camila, you may not want your life and your work twisted into a narrative, but that's what you're going to bloody get.
____________________________________
See the full self-referential investigation here:
http://www.bbc.co.uk/iplayer/episode/b06zw47r/camilas-kids-company-the-inside-story
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Thursday, February 04, 2016
Monday, February 01, 2016
Bad government
"History has taught me, that RULERS are much the same in all ages & under all forms of government: they are as bad as they dare to be," said the poet Coleridge in a letter to his brother George (c. 10 March 1798).
The immediate reference was to France - but after the Revolution and the killing of Louis XVI. Would no government at all, be better?
Libertarians - Coleridge's "Philosophers & Friends of Freedom" - like to think so; to imagine that but for the oppressive State we would all get along much better. Not until we are better people, says the Dreamer, quoting Cowper's "The Task":
"He that takes
Deep in his soft credulity the stamp
Design'd by loud Declaimers on the part
Of Liberty, themselves the slaves of Lust,
Incurs derision for his easy faith
And lack of Knowledge..."
Burma, 1942: Rangoon has fallen to the Japanese, and Indians are fleeing westward. In Arakan, the British forces have made a rapid withdrawal:
"Chaos and civil war spread throughout Arakan. First, the local inhabitants fell on the wretched Indian refugees, who were still in thousands trying to escape by the coastal route. This exodus was followed by a bitter internecine struggle for land and power between the Arakanese and the Maughs, two sections of the population. The Maughs got the worst of it and many were driven across the Naf River to take shelter in territory still held by us, there to make yet another refugee problem. Faction fights among the victorious Arakanese then became the order of the day, until the Japanese, pushing up to Buthidaung, restored some sort of uneasy peace."
- Field Marshal Viscount Slim, "Defeat Into Victory", Pan Books edition (1999), p.147. This short paragraph could be turned into a novel of avoidable human suffering.
When even Hirohito's sadistic racists were an improvement on anarchy, when can the removal of a tyrant be justified?
Iraq, Libya and Syria? But not North Korea?
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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
The immediate reference was to France - but after the Revolution and the killing of Louis XVI. Would no government at all, be better?
Libertarians - Coleridge's "Philosophers & Friends of Freedom" - like to think so; to imagine that but for the oppressive State we would all get along much better. Not until we are better people, says the Dreamer, quoting Cowper's "The Task":
"He that takes
Deep in his soft credulity the stamp
Design'd by loud Declaimers on the part
Of Liberty, themselves the slaves of Lust,
Incurs derision for his easy faith
And lack of Knowledge..."
Burma, 1942: Rangoon has fallen to the Japanese, and Indians are fleeing westward. In Arakan, the British forces have made a rapid withdrawal:
"Chaos and civil war spread throughout Arakan. First, the local inhabitants fell on the wretched Indian refugees, who were still in thousands trying to escape by the coastal route. This exodus was followed by a bitter internecine struggle for land and power between the Arakanese and the Maughs, two sections of the population. The Maughs got the worst of it and many were driven across the Naf River to take shelter in territory still held by us, there to make yet another refugee problem. Faction fights among the victorious Arakanese then became the order of the day, until the Japanese, pushing up to Buthidaung, restored some sort of uneasy peace."
- Field Marshal Viscount Slim, "Defeat Into Victory", Pan Books edition (1999), p.147. This short paragraph could be turned into a novel of avoidable human suffering.
When even Hirohito's sadistic racists were an improvement on anarchy, when can the removal of a tyrant be justified?
Iraq, Libya and Syria? But not North Korea?
READER: PLEASE CLICK THE REACTION BELOW - THANKS!
All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Sunday, January 31, 2016
100 years ago - Zeppelin raid on Derby
source |
My mother once persuaded my aunt to write down her childhood experience of a Zeppelin raid on Derby in 1916. I originally posted the story some years ago, but more details are available in this Maxwell Craven article plus a BBC item.
These articles fix the raid as occurring during the early hours of February 1st 1916. Decades later my aunt's memory put it a few weeks later, but as the raid took place one hundred years ago tonight, perhaps her story is worth another post. She was eight years old at the time of the raid and this is what she wrote...
There were no air raid sirens as such in the First World War. When there was an alert, a local factory’s maroon sounded. In Derby they were called ‘Bulls’. I don’t know why unless the sound was similar to that of a bull roaring! We quite often heard them but nothing happened until one night in February 1916. I think it was the sixteenth but am not quite certain of the exact date. [see above note on exact date] Oddly enough, we hadn’t ourselves heard it that night. The sole form of heating in our three bedroom terraced house was the fire in the living room, so it was here we congregated and children playing noisy games perhaps drowned out the noise from outside.
We were always early in bed, half past seven in the winter. The maroons usually blasted out their warning at around seven o’clock. Dark green blinds covered every window, curtains were drawn over them to stop any chink of light from showing outside. We weren’t allowed to have the gas mantle in our bedroom lighted, went to bed by candlelight. My mother would come upstairs, see we were all tucked up in bed and when she went back downstairs, the candlestick went with her.
Our bedrooms, extending over the entry, was large, ample room for two double beds as well as other furniture. Two girls in one bed, two in the other. It must have been around eleven o’clock that we were awakened by our mother shaking us by the shoulder.
‘Come on,’ her request not loud but urgent. ‘Get up, the Germans have come.’ Her words and anxious face, lighted candle in one hand, the other shielding the flame, roused us quickly enough.
I dragged some blankets from the bed. My burden, flip flopping round my ankles almost tripped me on my descent of the steep narrow stairs. My eldest sister stood at the top of the cellar steps, shepherded us down. My mother carried the youngest. Swathed in blankets, for a time I became stuck behind the door, but my eldest sister hauled me out, took possession of my wrappings. I negotiated the steps down the cellar much more easily than I had those from the bedroom to the ground floor.
My dad, in peace time an accountant with the London, Midland and Scottish Railway, was home on leave. Like so many others, he’d enlisted on the outbreak of war. After only a short training, was in France in the trenches, up to his waist in water. A far cry from a warm, dry office. He developed enteric fever, was ill in Boulogne hospital for weeks. The upshot was that he spent the remainder of the war in the Treasury Department in Whitehall. Still on a soldier’s pay of course! It did mean though that he got home a bit more often and was safer though there were some bad air raids on London. I never heard him speak of them – in those days the horrors were kept away from young ears.
He was a handsome man, tall and broad and we were in awe of him. That night he’d pulled on trousers over his nightshirt and in the cellar directed operations. We’d all settled down when to my surprise a further influx! With much shuffling and whispering, muted telling off and some pushing and pulling the big family from next door trooped down the cellar steps and arranged themselves judiciously in our underground shelter.
Our street, a cul-de-sac ended in a high brick wall. On the other side lay the main railway line. Our neighbours lived in the very end house, in extremely close proximity to the line. The railways were a lifeline then, not only for troops, goods and coal, but also communications. Derby an important junction, might be the target of an enemy bomb. Our neighbours would be safer with us. It did make a crowd but being so close together we were warmer. And so we sat, the adults talking in low voices for maybe an hour when Dad held up his hand.
‘Quiet, I think I hear something.’
‘It’s a Zep,’ came an excited whisper – one of the boys from next door.
To me the menacing drone sounded like an irregular drumbeat. Everyone froze except for my dad who stole up the cellar steps. We could hear through the cellar grate, his footsteps on the blue brick pavement of the street. Rejoining us, he made no comment. Catching the eye of my mother, he nodded. Then he bowed his head, uttered the words of the Lord’s Prayer and as he came to the end we quietly chorused ‘Amen’.
We stayed where we were, the sound of the Zeppelin faded. Perhaps half an hour later it came back again. An almighty crash, the ground trembled beneath our feet. Broken glass tinkled somewhere at hand.
We were all frightened. Birds, bees and butterflies we naturally were used to but not flying monsters intent on our destruction. For several minutes we were all too shaken to say anything and then everyone seemed to talk at once, making vague suggestions.
I don’t know if the factory did sound an all clear. I have a faint memory of a long clear whistle and all of us trailing up the cellar steps and into the living room. A strange time to be up, at half past three in the morning we should have been asleep in our beds. Dad poked the remnants of the fire into a bit of a blaze, added a few pieces of coal and we young ones sat on the pegged hearthrug, glad of the warmth. My mother set about making her panacea for all ills, large jugs of cocoa sweetened with treacle and soon everyone was sipping the reviving drink.
The neighbours returned home. Dad, feeling a draught went out into the passage to investigate and found a gaping hole in the fanlight over the front door. On the floor lay an ugly piece of shrapnel – six inches long, about one inch thick and two inches wide with a jagged edge. Yet another unprecedented episode of that never to be forgotten night. We went to bed and despite the trials and tribulations we’d undergone, slept soundly – due to Mam’s cocoa perhaps?
The next day we learned that every window in every house in the street running parallel with ours had been broken and some damage had been done to roofs. There were tramlines in that street, two trams on their way to the tram sheds when the alarm sounded. The drivers stopped, the conductors with their long poles pulled the trolley poles away from the overhead lines to put the lights out.
Drivers and conductors heard the Zeppelin, heard it move away and decided to attach the trolley poles again to the overhead lines as they were anxious to get back to the tram sheds. However, apparently the Zep, after flying as far as Burton-on-Trent decided to return. The supposition was that the target had been the railway station and the two trams resembled from the air a lighted train.
Many stories were bandied about, one being that the Zep had picked up the trail of a train. The fire box had to be opened to keep the fire stoked up which must have made a steam engine not difficult to find from the air.
The driver of one late train was supposed to stop at Derby station, but aware that a Zep was in the area and afraid of the damage that could be done should he become the target for a bomb, the houses close together, many accommodating big families, he drove straight through open country. Actually to Chaddesden sidings about two miles the other side of Derby. We were told later that the driver’s nerves were so shaken by the terrors of that night he never drove another train again. I can’t verify the truth of that though – it was hearsay. Months later my oldest sister told me that some men, six I believe, had been killed. They’d been engaged in repair work at the sidings. Mam never mentioned these fatalities. As I said before, horrors were kept away from young ears.
We were told innumerable tales of personal experiences such as that of a spinster lady who lived across the street with her father and two nieces. The lady took her nieces down the cellar but her father refused to join them.
‘Clara,’ he said, ‘no German is driving me into the cellar.’
The words were hardly out of his mouth when a huge piece of shrapnel, shattering the window pane, cannoned into the wall above his head. Unhurt, he was covered in plaster and dust. Chortling, he still wouldn’t take refuge down the cellar.
The field at the bottom of our garden ran at the back of most of the houses on our side of the street and along the backs of the houses on the main road at right angles to us. Mr Scott the grocer who kept the corner shop, stabled his horse in this field. I don’t know whether the horse would be outside in February, certainly neither horse nor stable were damaged.
Only my older sister and I went to school on the morning following the air raid. Our younger sister still asleep, my mother wouldn’t disturb her. We saw the pavements in Bateman Street covered in glass and slates, broken windows, holes in roofs. Pupils seemed thin on the ground when we went into the hall for assembly. Miss Johnson the headmistress said as usual ‘good morning girls’ and we replied ‘good morning Miss Johnson’.
‘Some of us have had a disturbed night,’ she said, ‘but I notice that two girls from the worst hit area have come to school. Others with less excuse have stayed away.’ Making this observation, her eyes rested on my sister and I. Nudging each other we blushed, thrilled that our presence had been both noticed and commented on.
Our hymn that morning was of course ‘Fight the Good Fight’. I don’t believe the Zeppelins ever got so far inland again. At any rate I don’t recall spending another night in the cellar. Once was enough.
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Thursday, January 28, 2016
A kick in the araboolies
So (to begin in the fashionable way), I was observing a lad having a post-tantrum sulk out of class, and to be a little less obvious I picked up a book and pretended to read.
It was (and I'd never heard of it) "The Araboolies Of Liberty Street".
The Araboolies are a multicoloured family; even their individual members change hue regularly. Their house is a gaudy exception to the uniform Fifties-style US suburban residential zone of ticky-tacky dwellings and flowerless rectangular front lawns.
And General Pinch hates them. Like all military men, he is a stupid, choleric, fun-hating racist. He wants the Araboolies out, and he's prepared to tell the army (who "don't think, they only obey orders") to deport them.
I trust it won't spoil the tension of this story for you if I reveal that the tables are turned by a clever trick. The local residents all doll up their houses, leaving the Pinches' one as the exception, which the moronic soldiers dutifully tow away to nowhere.
Liberalism is good, though paradoxically (as I argued a few days ago) it is only made possible by limits. How far can we go in dealing with people whose opinions we don't like?
In the story, the Araboolies are playing a ball game outside; the ball crashes through General Pinch's window and bashes him in the stomach, sending him flying backwards. How we are supposed to laugh! Had it been written for older readers, perhaps he'd have got it lower down.
The children who had this kind of thing read to them grew up and went to college. Now they want to ban speeches by the feminist Germaine Greer and pull down Cecil Rhodes' statue in order to erase Horrible History.
I don't know about America, but I grew up in a country that was tolerant without needing propaganda for infants. My teachers and classmates never teased me for wearing lederhosen to primary school in the Fifties. Despite having a Germanic forename, I wasn't victimised for my European heritage in the Sixties - the occasional greeting of "'Itler" was only in jest, in the piss-taking and welcoming way of the British.
That was because my education was about learning things other than opinions.
Opinions are the hardest things to fight against. They grow like weeds in the mind. Facts, logic, experiences are what we need, and debate, always debate.
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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
It was (and I'd never heard of it) "The Araboolies Of Liberty Street".
"You need a new DPF filter, mate!" (Pic source) |
Published in 1989, Sam Swope's tale for tots promotes racial/cultural tolerance. The Araboolies are a multicoloured family; even their individual members change hue regularly. Their house is a gaudy exception to the uniform Fifties-style US suburban residential zone of ticky-tacky dwellings and flowerless rectangular front lawns.
And General Pinch hates them. Like all military men, he is a stupid, choleric, fun-hating racist. He wants the Araboolies out, and he's prepared to tell the army (who "don't think, they only obey orders") to deport them.
I trust it won't spoil the tension of this story for you if I reveal that the tables are turned by a clever trick. The local residents all doll up their houses, leaving the Pinches' one as the exception, which the moronic soldiers dutifully tow away to nowhere.
Liberalism is good, though paradoxically (as I argued a few days ago) it is only made possible by limits. How far can we go in dealing with people whose opinions we don't like?
In the story, the Araboolies are playing a ball game outside; the ball crashes through General Pinch's window and bashes him in the stomach, sending him flying backwards. How we are supposed to laugh! Had it been written for older readers, perhaps he'd have got it lower down.
The children who had this kind of thing read to them grew up and went to college. Now they want to ban speeches by the feminist Germaine Greer and pull down Cecil Rhodes' statue in order to erase Horrible History.
I don't know about America, but I grew up in a country that was tolerant without needing propaganda for infants. My teachers and classmates never teased me for wearing lederhosen to primary school in the Fifties. Despite having a Germanic forename, I wasn't victimised for my European heritage in the Sixties - the occasional greeting of "'Itler" was only in jest, in the piss-taking and welcoming way of the British.
That was because my education was about learning things other than opinions.
Opinions are the hardest things to fight against. They grow like weeds in the mind. Facts, logic, experiences are what we need, and debate, always debate.
READER: PLEASE CLICK THE REACTION BELOW - THANKS!
All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Monday, January 25, 2016
Globalism and its threat to liberty
Individual liberty is not an absolute; it exists in a social context. Reasonable limits on behaviour are established by some combination of external compulsion and learned self-restraint.
Even John Stuart Mill recognised this:
"It is not because men’s desires are strong that they act ill; it is because their consciences are weak. [...]
"In some early states of society, [the strong desires and impulses of individuals] might be, and were, too much ahead of the power which society then possessed of disciplining and controlling them. There has been a time when the element of spontaneity and individuality was in excess, and the social principle had a hard struggle with it. The difficulty then was to induce men of strong bodies or minds to pay obedience to any rules which required them to control their impulses.
"To overcome this difficulty, law and discipline, like the Popes struggling against the Emperors, asserted a power over the whole man, claiming to control all his life in order to control his character-which society had not found any other sufficient means of binding.
"But society has now fairly got the better of individuality; and the danger which threatens human nature is not the excess, but the deficiency, of personal impulses and preferences."
- "On Liberty" (1859), Chapter 3.
The slogans of individual freedom are used by rich and powerful persons and corporations to justify knocking down all obstacles - tax, law, regulation, restrictions on the international movement of capital and people - to their own advancement.
In the wake of their activities come economic uncertainty and cultural confusion, out of which arises growing social unrest which the governing power in each country or region is challenged to contain.
When the populace feels its collective identity crumbling, the State feels obliged to compensate for the weakening of individual psychological constraints by an increase in spying, legislation, police and armed forces.
If the "men of strong minds" cannot be persuaded or compelled to accept certain bounds to their impulses, their liberty will depend upon the progressive subjection of the majority.
The nation-state is not a restriction on liberty but that which gives liberty its form, just as the sonnet is not a cage for words, but its house and organising framework. "To enter in these bonds, is to be free," said John Donne; like life itself, freedom is a paradox, a balance of contradictory forces.
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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Even John Stuart Mill recognised this:
"It is not because men’s desires are strong that they act ill; it is because their consciences are weak. [...]
"In some early states of society, [the strong desires and impulses of individuals] might be, and were, too much ahead of the power which society then possessed of disciplining and controlling them. There has been a time when the element of spontaneity and individuality was in excess, and the social principle had a hard struggle with it. The difficulty then was to induce men of strong bodies or minds to pay obedience to any rules which required them to control their impulses.
"To overcome this difficulty, law and discipline, like the Popes struggling against the Emperors, asserted a power over the whole man, claiming to control all his life in order to control his character-which society had not found any other sufficient means of binding.
"But society has now fairly got the better of individuality; and the danger which threatens human nature is not the excess, but the deficiency, of personal impulses and preferences."
- "On Liberty" (1859), Chapter 3.
The slogans of individual freedom are used by rich and powerful persons and corporations to justify knocking down all obstacles - tax, law, regulation, restrictions on the international movement of capital and people - to their own advancement.
In the wake of their activities come economic uncertainty and cultural confusion, out of which arises growing social unrest which the governing power in each country or region is challenged to contain.
When the populace feels its collective identity crumbling, the State feels obliged to compensate for the weakening of individual psychological constraints by an increase in spying, legislation, police and armed forces.
If the "men of strong minds" cannot be persuaded or compelled to accept certain bounds to their impulses, their liberty will depend upon the progressive subjection of the majority.
The nation-state is not a restriction on liberty but that which gives liberty its form, just as the sonnet is not a cage for words, but its house and organising framework. "To enter in these bonds, is to be free," said John Donne; like life itself, freedom is a paradox, a balance of contradictory forces.
READER: PLEASE CLICK THE REACTION BELOW - THANKS!
All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Sunday, January 24, 2016
Trillion Dollar Drain - is it about bail-ins?
Yesterday I commented on Hugo Salinas Price's observation that Central Bank assets have declined by a trillion dollars in 17 months. I thought it might be caused by big money trying to get away from a potential dose of inflation as governments try to print their way out of obligations.
Of course, buying government bonds wouldn't help with that. How silly of me to forget.
But what it would help with, is avoiding a giant cash-grab by banks as they start collapsing.
Ever since the law case Carr v. Carr (1811) it has been clearly established - but still not generally known by most people - that bank deposits are not simply left for safekeeping. [This was re-discussed in 2010 in the wake of the 2008 Global Financial Crisis, e.g. here in the Daily Telegraph.] Revisiting this issue in the courts in 1816, the judge Sir William Grant ruled that "money paid into a banker's becomes immediately a part of his general assets; and he is merely a debtor for the amount."
"Depositors" go without dividends and recently have received no or little interest to boot. In the optimistic dreamworld of the common man, it's worth it for the sake of security - but he does not enjoy preferential/secured creditor status, either. Yet he goes on happily, relying on some vague notion that he'll be made whole if something goes wrong.
But I warned in 2007 that at that time in the UK only the first £2,000 was 100% guaranteed and any excess over £35,000 had no protection at all. This was later raised (in line with an EU directive) to €100,000, translated (roughly) into British £85,000 - and from 1 January 2016 it has been reduced to £75,000 as the Euro sank. [It's a moot question: which is more nearly broke, the EU or the UK? and how will that impact relative currency values? One wonders what the maximum UK depositor compensation will be in the near future.]
In the US, the security for depositors depends on the FDIC, which Tyler Durden explained last May is in no financial condition to weather a storm, having a reserve ratio of merely 1.01% in 2014.
This is of little concern to the average American - less than half the population has anything more than $1,000 in savings and a fifth have no bank account at all. A couple of years ago a survey found a similar picture in the UK.
But ultra-high net worth (UHNW - assets > $10 million) individuals have something to worry about if the banking system turns turtle:
"UHNW households held more than $10 trillion (about 7 percent) of global private wealth in 2014, a slight increase over 2013, and will be the fastest-growing segment through 2019 [..] At a projected CAGR of just over 14 percent over the next five years, private wealth held by the UHNW segment will grow to an estimated $20 trillion in 2019," says Boston Consulting Group.
It would not be surprising if in the context of shrinking global demand and (for now) low inflation wealthy individuals were looking to bonds as a safe haven.
Let's ignore bond holding by corporations, pension fund and other fund managers, and national governments. The missing trillion dollars that exercises Hugo Salinas Price is less than 10% of UHNW household assets.
What a great time to be a bond salesman!
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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Of course, buying government bonds wouldn't help with that. How silly of me to forget.
But what it would help with, is avoiding a giant cash-grab by banks as they start collapsing.
Ever since the law case Carr v. Carr (1811) it has been clearly established - but still not generally known by most people - that bank deposits are not simply left for safekeeping. [This was re-discussed in 2010 in the wake of the 2008 Global Financial Crisis, e.g. here in the Daily Telegraph.] Revisiting this issue in the courts in 1816, the judge Sir William Grant ruled that "money paid into a banker's becomes immediately a part of his general assets; and he is merely a debtor for the amount."
"Depositors" go without dividends and recently have received no or little interest to boot. In the optimistic dreamworld of the common man, it's worth it for the sake of security - but he does not enjoy preferential/secured creditor status, either. Yet he goes on happily, relying on some vague notion that he'll be made whole if something goes wrong.
But I warned in 2007 that at that time in the UK only the first £2,000 was 100% guaranteed and any excess over £35,000 had no protection at all. This was later raised (in line with an EU directive) to €100,000, translated (roughly) into British £85,000 - and from 1 January 2016 it has been reduced to £75,000 as the Euro sank. [It's a moot question: which is more nearly broke, the EU or the UK? and how will that impact relative currency values? One wonders what the maximum UK depositor compensation will be in the near future.]
In the US, the security for depositors depends on the FDIC, which Tyler Durden explained last May is in no financial condition to weather a storm, having a reserve ratio of merely 1.01% in 2014.
This is of little concern to the average American - less than half the population has anything more than $1,000 in savings and a fifth have no bank account at all. A couple of years ago a survey found a similar picture in the UK.
But ultra-high net worth (UHNW - assets > $10 million) individuals have something to worry about if the banking system turns turtle:
"UHNW households held more than $10 trillion (about 7 percent) of global private wealth in 2014, a slight increase over 2013, and will be the fastest-growing segment through 2019 [..] At a projected CAGR of just over 14 percent over the next five years, private wealth held by the UHNW segment will grow to an estimated $20 trillion in 2019," says Boston Consulting Group.
It would not be surprising if in the context of shrinking global demand and (for now) low inflation wealthy individuals were looking to bonds as a safe haven.
Let's ignore bond holding by corporations, pension fund and other fund managers, and national governments. The missing trillion dollars that exercises Hugo Salinas Price is less than 10% of UHNW household assets.
What a great time to be a bond salesman!
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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
Saturday, January 23, 2016
Trillion Dollar Drain
General Midwinter's invasion force sinks through the Baltic sea ice - a still from "Billion Dollar Brain" (1967) |
Billionaire businessman and precious metal advocate Hugo Salinas Price notes that exactly one trillion dollars has disappeared from global Central Bank reserves since August 2014.
He comments:
"The fall in International Reserves is a clear indicator of a world-wide economic slump, which will become a severe depression... World liquidation has set in. The Piper must be paid. Growth is gone. This will be story in this epic year 2016."
- and asks, who bought that $ trillion-worth of assets?
I look forward to some expert opinion enlightening me.
Is this a sign that the super-rich and the offshore "dark pools" are offloading their cash for something safer? If so, is that an indication that they expect inflation as governments try to pay their obligations with debased currency?
Alternatively, has there been a secret write-off of unpayable debt?
Or did somebody at Bloomberg just hit the wrong key when updating the figures?
This infographic from Demonocracy shows what a trillion dollars in (100-dollar bills) looks like, compared to a football field (it's still only 6% of the US debt ceiling):
(Pic source) |
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All original material is copyright of its author. Fair use permitted. Contact via comment. Unless indicated otherwise, all internet links accessed at time of writing. Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog; or for unintentional error and inaccuracy. The blog author may have, or intend to change, a personal position in any stock or other kind of investment mentioned.
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