By Tim Price
So what precisely did our inflation-fighter-in-chief actually say? Well,
that euro zone instability had created
an exceptionally threatening environment
as falling government debt prices, softening confidence, and distressed
asset sales threaten to
spiral
into a systemic financial crisis. Also, the UK financial system was
encouraged to continue building up capital to bolster against an
extraordinarily serious
situation not of its own making and which it could not resolve. Also,
The crisis in the euro area is one of solvency not liquidity. And the
interconnectedness of major banks means the banking systems and economies
around the world are all affected. Only the governments directly involved can
find a way out of this crisis.
And,
If debt is not to [continue] exploding to ever more unsustainable levels,
transfers will be required together with the plan to restore the
competitiveness within the euro area. There comes a point where the creditors
need to realise that the scale of the debt owed to them is so large that they
may have to be part of the solution.
Strong stuff from a fellow who looks like the hamster in “Danger Mouse”. It
is all a waste of time, of course, more than a day late and more than a
trillion short in whichever currency you care to proffer.
Perhaps things are not quite as bad as they seem. Last week in London we
had the pleasure of hearing Gordon Corrigan speaking at Owen James’ always
stimulating “Meeting of Minds” investment seminar. The intention of his speech
was to put to rest a few myths about Britain”s role in the Great War. There was
undeniable tragedy during those dreadful four years, but could there be a
chance, asked the ex-Gurkha Major, that the Brits have tended to mythologise
the whole World War One experience, magnify the national role, and accentuate
the negative – a process that hardens with every passing year?
The late Alan Clark once quoted a conversation between a German general and
one of his men that has not just entered the national psyche but become firmly
embedded there. These British fight like lions, observed the soldier. Yes they
do, replied the general: lions led by donkeys. But apparently Alan Clark made
it up. No such conversation ever took place.
And there are evidently plenty of other established “facts” about the Great
War that turn out to be somewhat detached from the actualité:
The popular British view of the Great War is of a useless slaughter of
hundreds of thousands of patriotic volunteers, flung against barbed wire and
machine guns by stupid generals who never went anywhere near the front line.
When these young men could do no more, they were hauled before kangaroo courts,
given no opportunity to defend themselves, and then taken out and shot at dawn.
The facts are that over 200 British generals were killed, wounded or captured
in the war, and that of the five million men who passed through the British
Army 2,300 were sentenced to death by military courts, of whom ninety per cent
were pardoned.
The popular conception is that nearly every family in Britain had somebody
killed in it. But according to the official census reports, there were
approximately 9,800,000 households in Britain in 1914. The British lost 704,208
dead in the Great War. So statistically, only one family in 14 lost a member.
Although there were undoubtedly certain parts of the country where fatalities
were concentrated due to the way in which British infantry were recruited back
then, there were large swathes of the country from where no one was killed.
Corrigan has spoken of his own family, and his own black-clad Great Aunt, who
never married – perhaps because all of her boyfriends and potential boyfriends
met their end at the front? “Nonsense,” suggests an uncle – his Great Aunt
never married because she was “simply too damned ugly”.
By Gordon Corrigan’s account, British soldiers actually spent more time
playing football than facing the enemy. By regularly rotating the soldiery and
never keeping men in maximum danger for more than relatively short periods of
time, the British army was alone among the major forces on the Western Front in
never suffering a collapse of morale leading to mutiny.
One in 65 of the British population was killed in the war; for the French,
the figure was one in 28. One in every 12 men mobilised in Britain was killed;
for the French, one in six. For the Germans, one in 31 of the population was
killed, one in every seven mobilised, as shown in the table below:
France, with a population six and a half million less than that of the UK,
mobilised more men and suffered nearly twice as many deaths. Unlike in the UK,
the demographic effect on France was enormous.
The perception of soldiering in the Great War has the young patriot
enlisting in 1914 to do his bit and then being shipped off to France.
Arriving at one of the Channel Ports he marches all the way up the front,
singing “Tipperary” and smoking his pipe, forage cap on the back of his head.
Reaching the firing line, he is put into a filthy hole in the ground and stays
there until 1918. If he survives, he is fed a tasteless and meagre diet of
bully beef and biscuits. Most days, if he is not being shelled or bombed, he
goes “over the top” and attacks a German in a similar position a few yards away
across no man’s land. He never sees a general and rarely changes his lice-infested
clothes, while rats gnaw the dead bodies of his comrades.
Just on the topic of transportation, many soldiers were moved by train
until a few miles from the front, and as the war went on, motor lorries and
even London buses were used as troop carriers. And as Corrigan has
already pointed out, the rotation of troops alone ensured that conditions were
altogether more bearable than the popular conception would have it.
But back to the present. The war then may have been ultimately much less
bleak for the British, for example, than the media and propaganda have
portrayed. That does not mean that the peace now is any less bad for any of us
than Mervyn King suggests. As investors we remain trapped in a surreal
nightmare in which clueless politicians and desperate central bankers can see
nothing other than money printing as a way out of the gloom. In the euro zone
the problem is worse to the extent that the currency crisis is not merely
severe but existential. Tragically, former voices of sanity such as The Telegraph’s
Ambrose Evans-Pritchard seem to have now taken leave of their senses and joined
with the inflationists, as this recent mad piece indicates.
This crisis can be stopped very easily by monetary policy … to expand the
quantity of money.
Oh, really? I am indebted to Tony Deden for the following quotation,
from Alasdair Macleod in excerpts from a speech given to the Committee for
Monetary Research and Education, given in New York on 20 October 2011:
I support sound money for two very good reasons. Firstly, it is a basic
human right to choose to save, without our savings being debased by the tax of
monetary inflation. Those who are worst affected by this inflation tax are not
the rich, they benefit; but the poor and the barely well-off, which is why
monetary inflation undermines society and why the right to sound money should
be respected. If government gives itself a monopoly over money, it has a duty
to protect the property rights vested in it.
Secondly, it is a basic right for us to own our own money rather than have
it owned by the banks. For them to take our money and expand credit on the back
of it debases it. It is an abuse of an individual’s property rights and a
banking licence is a government licence to do so. If anyone else was to do this,
they would be guilty of fraud. Banks should be custodians of our money, and it
should not appear in their balance sheets as their property.
Sound money guarantees a stable yet progressive economy where people are
truly equal. It allows people to save properly for their retirement so that
they will not become a burden on the state. It leads to democracy voting for
small governments. It encourages peaceful trade and discourages war. It is the
only path, after this mess, that leads us to long-lasting and peaceful
prosperity. We really need everyone to understand this for the sake of our
future.
Are you listening in the chancellories of Europe? Here in Britain we may
not have had lions led by donkeys, but we now have liars throughout finance
being led by junkies addicted to the printing of money. As democracies
throughout the continent now topple to be replaced by technocrat stooges, and
as the monetary and social chaos accelerates, we must hope that we at least
manage to avoid the devastating political mistakes our forebears throughout
Europe committed almost a century ago.
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