“Politics and the fate of mankind are formed by men without ideals and without greatness…”: Albert Camus
When the Labour government of Prime Minister Harold Wilson took office in the UK in October 1964, the country faced a fiscal deficit (an excess of government spending over revenues) of £800 million. It was around that time that Wilson is believed to have coined the phrase “a week is a long time in politics”.
It sure is, as Manuel Merino – interim President of Peru for six days until Sunday 15 November, when he resigned on TV after massed protests – can testify. Merino had taken over the presidency after Peru’s Congress had ejected the previous President, Martín Vizcarra for his alleged “permanent moral incapacity” – Vizcarra is accused of taking big bribes, which he denies. If “permanent moral incapacity” were a justification for ejecting all and any politician, who would escape?
By November 1967, the financial pressures on the UK had become overwhelming and the then Chancellor, James Callaghan recommended that Sterling be devalued. Two days later it was devalued by 14.3%, taking it from an exchange rate against the US dollar of $2.80 to $2.40, and interest rates were raised from 6.5% to 8%. Wilson notoriously weaselled his way out of this bad news on television, mendaciously telling the British public: “That doesn’t mean, of course, that the pound here in Britain, in your pocket or purse or in your bank, has been devalued”.
Fifty-six years later and the conditions of the British economy – a relatively weak export sector, a trade deficit in goods (around £23 billion in the second quarter of this year) – are pretty much the same, except that today no-one talks in terms of millions. It’s all billions – such is the erosion of value.
Shortly after that devaluation the UK’s application to join the European Economic Community (now the European Union or EU) was blocked (for the second time, the first was in 1963) by the President of France, Charles de Gaulle.
Less than six weeks from now the UK is due finally to leave the EU, with or without a trade deal. Opinions are sharply divided as to whether the lack of a trade deal would be more damaging for the UK or for the EU. In truth, leaving without a trade deal would harm both sides, and not just financially.
Decline and fall
President Donald Trump kept revolving doors’ manufacturers in business; the Brookings Institution calculates that his so-called “A” team – the most influential positions within his executive office – has had a turnover of 91%. So far he has not yet conceded office, yet even China has congratulated Joe Biden on winning the presidency. Clinging to office is starting to look petulant.
Petulance is a trans-Atlantic sickness. One reason for turning to gold as money is because politicians, the class of people who manipulate fiat currencies to serve their own ends, can be whimsical; they are fallible creatures, wrapped up in their own ambitions, desires, jealousies and other permanent moral incapacities.
Witness this week’s teacup-tornado in No 10 Downing Street. A wrangle over who would get the job as Prime Minister Boris Johnson’s chief of staff (and boy, does he need one) led to the walkout and/or dismissal of the two men most closely identified with a hardline position on the UK’s departure from the EU. These two – Dominic Cummings and Lee Cain – were unelected advisers but are reckoned to have masterminded Johnson’s victory in the last general election. In his blog, Cummings wrote in May 2018 that “the wiring of power in Downing Street is systematically dysfunctional”, possibly his most prescient comment.
Recriminations have already started. A leak (picked up and widely reported) that the Cain/Cummings camp had a nickname for Johnson’s latest squeeze, Carrie Symonds (also unelected but undoubtedly influential on Johnson), calling her behind her back “Princess Nut Nuts” for her supposed interference in government. Accusations of misogyny have necessarily followed. This is decline and fall with a vengeance.
Gold is not petulant
The capacity of politicians, who are swayed by personal tastes as much as national “higher” interests, for petulance is as great as it is for any of us.
The need for “good” government – for government that takes rational decisions that are unemotional and not swayed by the Twittersphere – has rarely been more urgent than at a time of global pandemic.
Whether it be how the UK leaves the EU, or how the US intends dealing with its own deep internal divisions, the time for petulance should be over. But because our political leadership – be it in Beijing, Brussels, London, Minsk, Moscow, and still in the US – shows very little indication of developing maturity, it is as well to think about buying some gold, which is utterly impervious to blandishments or bluster.
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