Wednesday, August 10, 2011
It may be a product of an era of comfort and cosseting or it may be a throw back to the guilt of Empire, but whatever the reason, The British Disease has appeared to TMM to be almost endemic. But now it may have finally been diagnosed and research embarked upon for a cure. The moral compass of the British people has for many years pointed towards one of self doubt and paranoid inward reflection leading to a feeling of collective responsibility for all the injustices of the world. This has led to UK involvement in conflicts around the world, huge payments in compensation and a media which desperately looks for links in any story that can blame the causes on something UK.
The riots may have finally broken this trend with even Guardianistas rebuffing idealistic arguments linking the riots to basically anything they don't agree with. TMM tried suggesting that the riots were a natural reaction to an expansion of the US Balance sheet and a grass roots rejection of the ECB purchase of Italian debt married to an uprising of an underclass that always doubted the enforceability of a 3% debt to GDP ratio in the original Maastricht treaty. We were gaining some traction in political circles until these two idiots betrayed the real reasons.
The outstanding "political betting blog" neatly expressed the latest YouGov survey of what the main causes of the riots are seen as, with a massive majority clearly angry that this is purely criminal and gang behaviour. Only 8% of voters blamed the "cuts".
As such, TMM don't think it will have any affect on the direction of the UKs austerity plans that have, during the latest attacks on Europe and the US, been a stand out differentiator leading to GBP becoming a relative safe haven amongst the carnage.
And we continue to like the proud pound in general. Especially GBP/USD. Which is an extreme rarity having been brought up through an era where there were ever only 2 conceivable positions in GBP - Short or very short.
Now, markets. In the mixed doubles the latest score is FOMC and ECB 1 - 0 SNB and BoJ. ESZ1 now trades 100.01 BID and Swiss customers are being sent letters saying they are being charged -ve interest to hold CHF in their bank accounts. Contacts of TMM have started selling their personal CHf and are moving out to EUR just in disgust that they should be charged for the pleasure, just like some US banks are doing. Which is interesting.
We have been suggesting for a while that the authorities have never had the banks out of their gun sights and have been seeking retribution for the damage they caused in 2008. We thought that ideally the regulators would gently nudge them back towards old fashioned banking where they would abandon all the newfangled investment leverage risk thing and appear as friendly high street bowler hatted guardians of society. But in the case of the Swiss and the odd American they appear to have gone one step further resulting in their being no incentive whatsoever to place your cash with them other than the most fundamental of reasons - a safe.
Which leads TMM to consider selling banks and buying safety deposit box companies as we head right back to the wild west 1800's of banking.
Oh and as to all that FOMC stuff last night? We think that QE3 will be the straw that breaks the Dollar's back.
We leave you with a quote from the man from whom one member of TMM crafted his pseudonym.
"There are a set of men who go about making purchases upon credit, and
buying estates they have not wherewithal to pay for; and having done
this, their next step is to fill the newspapers with paragraphs of the
scarcity of money and the necessity of a paper emission, then to have a
legal tender under the pretense of supporting its credit, and when out,
to depreciate it as fast as they can, get a deal of it for a little
price, and cheat their creditors; and this is the concise history of
paper money schemes"
Thomas Paine (1737 - 1809)