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January 2012 - Books by Sam North as e-books now available - see links below
Previous notes by Sam in 2011:
Tis the Season to Forget

As Christine Lagarde (Chief of the IMF) warned before Christmas 2011 …"There is no economy in the world, whether low-income countries, emerging markets, middle-income countries or super-advanced economies that will be immune to the crisis that we see not only unfolding but escalating.  It is not a crisis that will be resolved by one group of countries taking action.  It is going to be hopefully resolved by all countries, all regions, all categories of countries actually taking action.

The only snag in all this is what John Kenneth Galbraith reminds us:  ‘Economics is extremely useful as a form of employment for economists.’  And further he adds: ‘Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable.’

For those who don’t know Galbraith he wrote the definitive history of the Wall Street Crash ‘The Great Crash: 1929’ and it seems Ms Lagarde has been reading it lately. “No one was responsible for the great Wall Street crash.  No one engineered the speculation that preceded it.  Both were the product of the free choice and decisions of thousands of individuals.  The latter were not led to the slaughter. There were impelled to it by the seminal lunacy, which has always seized people who are seized in turn with the notion that they can become very rich.  There were many Wall Streeters who helped foster this insanity …there was none who caused it.” John Kenneth Galbraith

For the Great Crash read ‘Euro Crisis’.  Make no mistake we are on the threshold of a great cataclysm if it is not dealt with promptly.  Sadly European politics runs at a snails pace and then there is Christmas, followed by New Years then January weather and so forth.  David Cameron (UK Prime Minster) has come in for a lot of flack for using the veto to try and prevent France and Germany stealing the lucrative City of London financial quarter for themselves.  (Make no mistake this is their sole purpose).  No matter all the vitriol from France (in particular) it has served as a wake up call for some in Europe (but sadly not France who choose to wail and accuse treachery rather than actually deal with the real problem – the Euro doesn’t work unless there is political and fiscal union and that means – in reality- Deutschland Uber Alles.  It is much easier to get the French people all worked up to hate the UK (and get Sarko re-elected on the way) than admit that the game is up and all seventeen – if not 26 European countries will have to be ruled from Brussels via Berlin.  This is not to be cynical, just the plain logic of a currency union. 

The UK chose not to be part of it – rightly it turns out because the southern countries in Europe saw the Euro as a big fat piggy bank left to raid on Daddy’s shelf – without ever considering that their pilfering would be found out and they’d have to pay it all back.  Worse because they aren’t able to devalue – they can’t escape the consequences without bankrupting their own countries or the rest of Europe. 

Thanks to the profligacy of former UK PM Gordon Brown who essentially looted the coffers of Great Britain to ensure he’d be re-elected by grateful Labour supporters he stuffed into millions of useless Government jobs – the UK is crippled by debt as well.  The worse part of all this is that those same public sector workers are quite likely to re-elect Labour next time around under the mistaken belief that they will get all these jobs back.  It isn’t going to happen.  We are essentially bankrupt.  The only way to survive is less government, not more.  There is an estimate that more than five million people are of working age are economically inactive – getting benefits that are plainly unaffordable.  It is a very hard nettle to grasp.  A neighbour, who has never worked, an alcoholic, smoker (with emphysema) owns her own house, is on sickness benefit and the state has just spent £30,000 on putting in a new kitchen and double glazed widows.  Multiply that person by a few million more all getting this incredible largesse and you can see the problem. 

I have had the misfortune to have to go visit my sister in hospital of late.  It is filled with people dealing with obesity problems, addiction, and alcohol abuse.  I had no idea just how bad it has become, wandering around the corridors of St Thomas’s Westminster is an education.  Many of these people are abusive to staff, make extraordinary demands, all know their rights, but exercise no self-discipline at all. I am amazed nurses are able to put up with it and that there has to be police in the wards.

Everyone can see there is a problem with discipline, with self abuse, with 'expectation of something for nothing' but is there really the political will to face up to this?  Or, the fact that we keep millions of people unnecessarily alive.  (Yes euthanasia should be a human right – if you do not have a quality of life or agility and are in pain and want to go – it should be your right to leave painlessly.  Equally if you want to live but can’t support yourself –fine, but why should we the taxpayers have to pay for your right to live forever?)  One day we shall have to face this issue – sooner than you think.

Are there solutions to our financial and frankly ‘spiritual’ problems?  Yes self-discipline, self-restraint – living within your means – taking responsibility for your life and decisions.  Shocking isn’t it.  Add helping others, consideration. 

2012 will be tough – there may well be outbreaks of trouble that border on the revolutionary and it may give birth to the rise of extreme politics on the left and the right all over again.  Sadly history repeats itself as farce - however no one will be laughing. According to Robert Wiedemer author of 'Aftershock Survival Summit' we are looking at 50% unemployment going forward, coupled with 100% annual inflation and a 90% stock market plummet. The fact that the gold price has gone below $1600 an ounce today would seem to belie that but you are warned. Wiedemer correctly prediction the crash of 2008. If you also follow Max Keiser on RT you will also be building some kind of bomb shelter in your garden right now. (The Occupy Garden Movement). Yes the sky is falling. Then again...
A Happy Christmas to you to all - see you the other side. Maybe.

Previously Dec 1st:
On 1.12.11 the Governor of the Bank England worried that we must protect ourselves from an ‘extraordinary serious and threatening’ economic situation in the face of a Euro collapse.  The trouble is how does an individual protect oneself from this possible catastrophe?  Take your money out of the bank (assuming you have any) and buy dollars or gold?  If you look at the state of the USA economy and the calibre of those running for president would you want your money invested there?  OK Black Friday went well and people are consuming more (up 16% on a year ago) but this only helps China who seems to make everything now.  I was in Gap on Monday for their 30% sale and literally everything I picked up was made in China.

It is no use moaning about our economies in the West if we fail to make anything people want and if the stores we use don’t sell anything made in your own country. The other day The Times pointed out that we in the UK make little the Chinese want. Or Brazilians for that matter, the people with money right now. But they might be wrong. The UK is strong on intelluctual capital - publishing - TV - media of all kinds, as well as science. Not so good at making money out of science it seems but we make our way in the world with our minds nevertheless. I'd rather have Adele or Emeli Sandé leading our export drive than plastic santas from China. But that is selling China short. Right now it seems they make everything we want and they have $3000 Billion US in reserve to prove it. But for how much longer will the accept dollars as payment (or Euros of course). Might we have the last laugh when they discover it's all just well - paper...?

Yes there will be hard times ahead. Pensions will be squeezed or not paid at all.  A person born today may not get a pension until they are 73. Already estate agents in the UK are reporting that discounts on asking prices for homes are heading towards a 12% average (source Gascoigne and Pees 30.11.11)

Right now everyone is worried about inflation – quite right too, as it costs nearly £100 to fill my Fiat now with diesel, but next year the spectre of deflation may hit us like a ton if bricks and with credit squeezes and accelerated job losses your home could plummet in value.  Negative equity is no joke. 

Perhaps we need to do this. China again is to blame.  Our salaries and costs in the West are far out of line with China’s.  For a time it meant we felt rich buying stuff so cheap.  Now we can only feel poor as our currencies buckle under the weight of collective debt.  The rich will hedge and survive.  You and me might well be crushed underfoot however.

You think I exaggerate?  We shall see.  There’s a reason the Mayan calendar runs out on December 21st in 2012.  Armageddon doesn’t have to mean great nuclear explosions – although we could suggest that Iran seems to be working towards that deadline.  It could mean global financial collapse, the inward implosion of capitalism.  The anarchists will reap the world they crave – only they might be upset to find that there are no toilets working in Starbucks when it happens – or indeed anywhere.

Kids' fiction is filled with dystopian fiction right now – showing brave individuals overcoming huge odds and finding love on the way. (I just read Divergent - a disappointing example).   Sadly it might be much worse than even the terrible nightmare scenarios they conjure up.  No love at all.

2012 sees the 100th aniversary of the sinking of the Titanic. Can't think of a better metaphor for the Western Economy than that. The unsinkable was holed by ice. We have hubris and greed. Worth noting that there is rather less ice now as global warming accelerates. Most of the world's manufacturing (and China's) , nuclear power stations - ports etc are built at sea-level and vulnerable to an unstoppable rise in sea levels and weather patterns. (Ask anyone in Japan about nuclear reactors and their vulnerability). If you never read 'The Wind Up Girl' by Paolo Bacigalupi you should. Treat yourself to a genuine glimpse of the future.

You can explore short stories and reviews in this archive.   If you have a spare cent, buying one or more of my novels linked hereabouts would be sincerely appreciated
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