Oh, What Became of the Likely Lads?


Although it’s a little bit late, I just stumbled onto a great article at the Mises Institute about inflation, fiat money, and the UK riots.  I paid some degree of attention to them, primarily because I have an Englishman who is very near and dear to my black old heart.  Frankly, and I mean no offense when I say this, I am completely unsurprised that those riots happened.  For one thing, it seems to me, in my careful observation of the English that, for all we outsiders seem to think they’re a lot of gentlemen in bowler hats, they’re really just ornery brawlers descended from barbarians.  They enjoy conquering and plundering – it’s part of their history.

Of course, the other thing to keep in mind is that England, financially, is in dire straits.  When the recession/depression first began, the UK had greater debt per capita than the US, which is a bit of an accomplishment, really.  That was pre-QE 1,342, though.  The numbers may have changed since then, although if this article is any real bellwether of the British situation, I rather doubt that conditions have improved.

My near-and-dear Englishman has told me repeatedly how tough England is and how much people tend to be out for themselves.  Now, I know that people can do terrible things and be incredibly cruel and self-centered, but in my naive little heart, I still believe in the general goodness of man.  I have found this to be generally true among most North Americans, US and Canadian alike.  Not so with the English.  Again, I hate to make generalizations, because it certainly doesn’t speak for all English, but by-and-large, they are incredibly distrustful of their fellow citizens.

I was brought up to trust your friends and neighbors and to distrust the government at all costs.  The government, I was told, would always try and infringe on you in whatever way was to its greatest benefit.  It seems, alas, that this is more true today than it was when I was a child.

Unfortunately, like the rest of Europe, England seems to have been corrupted by the government safety net.  Single mothers are given council houses in which to raise their children.  The council houses that I have seen and been inside in the UK were all bigger than the houses bought and paid for by private individuals.  Most all Brits I’ve met have had ambitions to get a job either working for local government or in some other state-funded position.  Why?  Job security.  Because England manufactures virtually nothing.  Even Cadbury has been bought by the American food company, Kraft.  England’s economy is anemic, and no amount of propping up by the government will change that.

It seems now that the government, due to lack of funds, is no longer able to continue propping up its socialist state.  Austerity is here.  It’s frankly not hard to imagine why people are rioting who have always had the safety net available to them.

But you know what?  There are other reasons why they should be rioting.  The Bank of England, like the Fed, has opted to keep interest rates low until 2013.  Inflation is running rampant throughout the British economy, and it is eating the sterling alive.  One thing I will give many English credit for – they are better savers than Americans, as a somewhat general rule of thumb.  God forbid that the few lucky who are lucky enough to have stable jobs and put aside a bit of money for a rainy day not have their hard-earned dosh gobbled up by the failed policy of the central bank.  Sadly, the pound has gone the same way as the dollar, losing about 6% to inflation annually since the 1930’s.

Unfortunately, with the Bank of England following Ben Bernanke’s lead (or vice versa), it doesn’t seem like things are going to be getting any brighter for the beleaguered Brits anytime soon.  In fact, with the specter of Greece and the slide of the Euro looming large just over the Channel, it seems like England is suddenly in a position to lose a lot more value out of its currency.  I wonder if Gordon Brown wishes that he had kept the other half of the UK’s gold reserve, instead of selling it off to China…?

To read the Mises article by Andy Duncan, click here.

 

UPDATE:

I just stumbled across some information concerning the UK debt-to-GDP ratio.  If one doesn’t include financial sector intervention and things such as pensions that will have to be paid out at a later date, it was about 61.4% of the GDP as of July 2011.  However, if you include pensions and financial sector intervention, it is 148% of the UK GDP.  Financial sector intervention would be defined as bailouts that were given to Royal Bank of Scotland, Lloyd’s, etc.  I don’t know why in the world this wouldn’t be calculated into the equation, but for some reason, it’s not being reported as widely.

With all of that taken into account, the UK is in worse financial shape than Greece.  I’m fairly positive that none of the mainstream media outlets are reporting the debt with the interventions factored in.  Were that the case, I expect this map would be so red, you’d think a herd of swine had just been slaughtered atop it.

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About The Lady Libertarian
I am American, currently expatriated but hopeful about getting back home one of these days. Besides reading and writing about politics, I enjoy camping, sailing, canoeing, making pie, and traveling. I hope you'll enjoy this blog and find it informative and accessible.

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