So; after a week of panic and mayhem on the stock markets, things have returned to about where they were when we started – maybe with a little improvement on the week.
Who drives this nonsense and who benefits? There does seem to be an inordinate amount of panic in the day to day business of world trading – and it would not be unreasonable to question why all the so called experts who work in this field are constantly caught ‘on the hop’ – or so it would seem from the panicked reactions to just about anything: the dollar’s up, the dollar’s down, oil is too cheap, oil is too expensive…
Whatever the movement; we have to endure some serious flapping, TV presenters banging on about recession and extensive analysis as to the effects – often wrong (refer last weeks stock market movements and final position).
We should of course bear in mind that traders only make money when they are trading and TV news people only have a story when they can get someone to flap on screen – so whether there is movement up or down – movement itself is required to show a profit (or loss) and so therefore must an objective in its own right.
Whilst this display of ‘smoke and mirrors’ is enacted before our eyes, we seem to miss the big picture: in the UK, as in most of the ‘west’ we don’t make anything anymore; we have an economy based on shopping and the price of your house.
We also hear talk of ‘the emerging economies’, which is meant to refer to China and India (with Brazil coming up fast too) – well I have news; these are not emerging economies – they are emerged – but they don’t look like the ones we are used to, so we don’t recognise it.
We don’t make anything – they do. Not only do they make it, but they make it better than we did and cheaper. Now they are buying up any bits of our remaining ‘family silver’, that even if it’s a bit tarnished; could be buffed up and repackaged; Rover, Land Rover, Jaguar, British Steel etc etc… and the same is happening all over the ‘western’ world.
Whilst this is going on, do you really think that the governments of these ’emerging economies’ give a toss about the price of your house – or the interest rate you are paying? Not much I shouldn’t think; unless it affects your ability to buy the stuff that they are making – and if things get a bit tight they have some profit margin that can be forfeited in the short term.
India has just produced a car for £1200; even after shipping costs you could flog that in Europe for £2000 and show a healthy profit.
Whilst we don’t make anything anymore – we pride ourselves that we are experts in financial matters, and so the rest of the world will trust us to run that bit… Really? again refer to last weeks panic…
Of all the industries we have ever had I would have thought that the financial one was the easiest to loose – given the will and some investment you could shift the whole thing out of the traditional sites (London, New York, Paris) in a matter of weeks… Then we wouldn’t have anything to do; but the economic world might be more stable for it.