Wednesday, February 18, 2009

Gordon's "grand bargain" is wearily familiar

I don't know who said it, but the phrase "those who cannot learn from history are doomed to repeat it" is something our PM is clearly not familiar with.

"From the discussions I have had and am about to have... I think we are fashioning for the future a global deal, a grand bargain, where each continent accepts its responsibilities and its obligations to act to deal with what is a global problem that can only be solved with a global solution," he told reporters in London.

This is all so reminiscent of the Great Depression with even the location of the summit conference being the same - except that there were 66 nations represented at the 1933 London Economic Conference.

Make no mistake, the origins of this crisis are almost identical to those that led to the Great Depression and, unless protectionist measures are introduced right now, the results will be exactly the same - a collapse in production, employment and trade, a massive rise in personal and business bankruptcies and a further contraction of the money supply.

The global debt is now so massive, there simply isn't enough money to go around. As Ambrose Evans-Pritchard pointed out yesterday, Austrian banks alone have a debt from the ex-Soviet bloc equivalent to 70% of Austria's GDP and the East European nations have to repay some $400 billion of their total debt (some $1.7 TRILLION) this year - equal to one third of the regions total GDP.

Almost all East bloc debts are owed to West Europe, especially Austrian, Swedish, Greek, Italian, and Belgian banks. En plus, Europeans account for an astonishing 74pc of the entire $4.9 trillion portfolio of loans to emerging markets.

So where does Brown think all the money for this "grand bargain" is going to come from? China? USA? India? Does he seriously expect the taxpayers of Europe to cover the $3.6 trillion owed by "emerging markets" (now, most probably, submerging markets)?

Globalisation always leads to a depression. Denying it or blaming other factors doesn't make that any less true. As always when depression strikes, the nations which will come through it best will be those nations which remain, largely, self-reliant and self-sufficient.

We're not one of those nations. We're so far up the creek, even if we had a paddle we'd still be carried away by the currents. The only thing we can do now is start building for the future and that means making our nation as self-sufficient and self-reliant as possible. That means our government supporting our industry, our manufacturing, our agriculture and our trade above and at the expense of any others.

The longer we leave it, the worse it will be.

1 comment:

Henry Crun said...

Hmmm, a global solution ay. The global solution to the Great Depression started with the annexation of the Sudetenland.