The British are an odd nation. They can reach get heights of great achievement while at the same time plummeting to depths of poor performance. The ability to do both things at the same time speaks to their priorities, as we can see from the Olympic Games now being held in London. Taken on any standards the Great Britain and Northern Ireland team has done very well. It is third in the medal count, it has the third number of gold medals of any nation, including nations that are much larger and much more prosperous that it. There is a simple reason for this excellent performance: money. Continue reading
The thrills and spills of the Olympic Games circus have rather distracted attention from the thrills and spills of the economy. Something bad is happening out there with currencies and the world economic outlook is in decline, but no one really notices as we praise competitors who win and commiserate with those who lose. What is happening in the economy of the world right now? The problem of the economy is created by other specific problems. Continue reading
Filed under: banking | Tagged: currency, currency problems, economy, gambling, laundering billions, lottery, taxation, US sanctions on Cuba, US sanctions on Iran, world economic outlook | 4 Comments »
It is odd how many people, companies, organisations and governments allow belief to prevail over reality. A problem can be staring you in the face but sometimes belief overwhelms reality and you do not recognise the problem, or, if belief allows you to recognise the problem, it fails to allow you to recognise the solution. Belief is a matter of feeling and reality is a matter of fact. Your beliefs may prevail where the facts are unknown or indistinct but if you allow belief to oeverwhel reality byou will make wrong decisions and ultimately come to a sticky end.
A good example of belief prevailing over reality is what is happening in the Eurozone. Governments, officials and policy makers are allowing their belief that the euro is a good thing for Europe to prevail over the reality that for many parts of the Eursozone the Euro is a bad thing.
I do not think that the Euro will survive for long as the national currency of twenty seven nations, each with very different habits and expectations. To believe that the euro will survive is to allow belief to prevail over reality.Such is the nature of wishful thinking.
Greece is in distress. It is in great difficulty, with no money, no government and very little hope. It has taken much in the past ten years, taken from nations that were willing to lend to it, and directed its economic policy to suit the demands of those pursuing a dream of European unification. It has gorged on the money it borrowed, without being able to create wealth from its debts. Continue reading
If you entrust your money to JP Morgan Chase you will be perturbed to learn that the bank managed to have lost $2 billion due to errors sloppiness and bad judgement and that more losses are on the way. It did not lose the money because of some crooked employee; it lost it in what is the casino in which banks participate, hedging wrongly – in other worlds making best without, as every good bookmaker does, laying of appropriately to minimise loss potential. Continue reading
Right now the banks in the United Kingdom are in business and able to trade in markets by leveraging their depositors’ funds. Their depositors are only placing such funds on deposit because the government of the United Kingdom has given a guarantee supported by the taxpayers of the United Kingdom, many of whom have deposited the funds which are being guaranteed. Without the depositors funds the banks would not be able leverage and that would prevent them dealing in markets for profit (or loss). Continue reading