Tuesday, February 07, 2012
Things remain pretty quiet in the markets and apart from the RBA deciding not to cut rates but instead fuel the fires of dutch disease, Team Macro Man have been left to trawl through the smaller stories in the press.
The background theme of potential Euro break-up has provoked turbid debate as to how the introduction of local currencies could be managed without cataclysmic step change wrecking the domestic economies, so TMM were amazed to find that the UK city of Bristol has decided to leap-frog Greece and Portugal and plow ahead with the introduction of its own currency. TMM assume that Alex Salmond and his Scottish colleagues are watching the project with keen interest.
Of course, introducing local town currency is nothing new, but when one reads the resume of its creator, and knowing the qualifications needed now to even mention a new product in the City, we wonder why the FSA haven't already locked him up. Yet somehow the project is ready for launch. Now TMM have had a bit of experience in the currency markets and so would like to make their own predictions about the probable life cycle of the Bristol Pound.
We give you Team Macro Man's "19 stages of the Bristol Pound".
1) Bristol shopkeepers decide that their high street demise has nothing to do with a lack of shops that people actually want to buy things in, the internet, no parking, or cheaper prices from out of town super-centres but is due to having to use "bankers' fancy money" and so decide to make and use their own.
2) Bristol look for their John Bull rubber printing set, last seen in Toby's toy box in 1976, give up, and instead run a competition between 5 year-olds to come up with the simplest, most forgeable design possible and run it off using the printing service at Boots the Chemist.
3) The new Proud Bristol Pound is launched to gullible shop owners and the odd major supermarket who feel they have to go along for PR reasons but won't accept more that 5 or them per £100 of groceries and even then charge a 20% "handling fee".
4) All runs well for a month or so with local pride swelling. Some people especially appreciate the benefits of the new currency - mostly those who notice that there is no column in their tax returns entitled "Earnings denominated in Bristol Pounds".
5) Someone notices that the Bristol Pound is actually just like a normal pound with the drawback of only being accepted in a handful of shops that they wouldn't normally go to (remember - that's why it was created).
6) News spreads and folks start exchanging their Bristol Pounds for the universally accepted British pounds. Meanwhile, others have noticed that photocopying them is not that illegal and a run starts on the Bristol Pound.
7) Questions are asked and newspaper articles appear showing the frail and elderly freezing in squalid garrets surrounded by piles of Bristol Pounds that they had been persuaded to buy in the Post Office. "SOMETHING MUST BE DONE!"
8) But help is at hand... Reuters Headlines:
*THE SPINNING-WHEEL TEA ROOMS SEEN INTERVENING IN BRISTOL POUND SPOT MARKET TO SUPPORT LOCAL CURRENCY
*"SPECULATIVE ATTACK'S FROM CIRENCESTER MOBILE CHIP SHOPS WILL NOT BE TOLERATED AND FIRM POLICY IMPLEMENTATION WILL BE UNDERTAKEN" - SPINNING-WHEEL TEA ROOM
*"WE HAVE THE SUPPORT OF THE CENTRAL BANKS OF WESTON-SUPER-MARE AND BATH" - BEN FROM THE RED LION, CHANCELLOR TO THE BRISTOL POUND
9) A news headline temporarily stays the markets:
*CHINA'S WEN JIABAO SAYS "IT IS IN CHINA'S INTEREST TO SEE A STABLE BRISTOL POUND"
But hope is then dashed when followed by:
*CHINA NOT YET READY TO BUY PROPERTY IN CLIFTON - CHINA'S JIABAO.
10) Bristol introduces capital controls. Road checks on the M4 and M5 stop and ask motorists if they have any Bristol Pounds that they are taking up to "the big Smoke" and then onwards to "those off-shore folks, probably on the Isle of Wight, as the Lundy lot are OK and mostly seals".
11) The United States accuses Bristol of currency manipulation and demands an immediate devaluing to its true value of "toilet tissues" from the artificially maintained level of "chip wrapping".
12) Bristol buys a second hand HP Photosmart C7280 All-in One printer off Ebay and starts to print more Bristol Pounds (as it worked for the USA). Builders merchants and garden stores praise the policy as wheelbarrow sales explode. However, Zimbabwean economics sees Boots run out of printing paper.
13) Bristol realises that printing more Bristol pounds is the wrong thing to be doing and calls the Bank of England for some British ones instead.
14) The Bank of England offer to help, realising that Bristol is on the way to their holiday homes in Cornwall and that trouble in Bristol could add an hour each way to the journey. A delegation is sent, which soon discovers that the local bookie, Jim, having volunteered to look after the British Pound reserves, had paid them out against a 30/1 shot that had come in on the 4.30 at Haydock the week before.
15) The Bank of England and the counties of Avon, Somerset and Gloucestershire insist that any aid is accompanied by austerity measures for Bristol, to include half-day closing on Wednesdays, the sale of the "Great Britain" steam ship and 20 points off Bristol Rovers and Bristol City's league rankings, with all local teams being made to play in their underpants when a mid-level administrator at Bristol Council misinterprets the ban on short selling.
16) Riots break out and marches are organised to London, but the launch of a new Bristol rescue bond backed by Greece and Portugal and the swift reintroduction of the British pound swiftly restores calm.
17) Bristol shop keepers moan about the lack of trade once again (wheelbarrow sales plummet) and blame the fat cat bankers who forced them into having to introduce their own mickey mouse currency in the first place.
18) Jim the Bookie is not allowed to keep his bonus.
19) All is well