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A Parable for Europe: The Tower of Babel1st April 2013

And behold, a united humanity of the generations of six nations, following two terrible wars, resolved to build a continent of trade and common market that they named the European Coal & Steel Community.  And men were elected by their nations to the High Authority. And the High Authority did command that the Community should prosper as the wrongs of the past were put right, and they raised a tax that was proclaimed to be for the common benefit of the multitude. But through the frailty...

Surprised by Cyprus? You shouldn’t be25th March 2013

If we are ever to understand opportunity and risk, we need to think for ourselves, and think well outside of the box. Or perhaps in Cyprus' case the holiday suitcase. The mainstream does none of this, stuck in silo thinking all of its own making, so no wonder they get surprised by events. If one can ever take satisfaction from a disaster, I was quietly pleased to have blogged on 20th February "the next default ... Cyprus ... a bail-in of bank depositors ... queues forming outside the doors...

Frederic Bastiat On Troops, Henry Hazlitt on Bureaucrats11th March 2013

Last week we introduced the great French economic philosopher, Frederic Bastiat, and his Broken Window, which goes to the root of the current problems with our bodies economic and politic, and perhaps much of human thought. I promised to pick up with more of his erudite thoughts, and so here we go ... Remember that Bastiat was born in 1801, and even though he died young, of tuberculosis in 1850, he lived through an era of revolution, anarchy, authoritarianism, monarchy and republic. With all...

Frederic Bastiat: The Broken Window10th March 2013

This magnificent angel forms part of the famous Arc de Triomphe in Paris, built to recognise those who fought and died for France from the French Revolutionary Wars onwards. Such glorious architecture reminds us that what we do today is but a modest spec in the passage of time, and that many dramas have been acted out in the lives of millions long before we arrived on the scene. As a boy I was fascinated by the Napoleonic Wars. The different styles of leadership, the Armies across Europe...

Corporations: No Taxation without Representation4th March 2013

You'll know about the 1773 Boston Tea Party. I had the pleasure of visiting Boston a few weeks after the shocking events of 9/11, at a time when Americans were only too pleased to see travelling Brits, so my welcome was a great deal fonder than it might have been back in those heady days leading up to the American Revolution. 240 years ago, 342 chests of tea were dumped from three ships after colonists objected that taxes were imposed on their tea by a British parliament, a parliament on...

The Trouble with Inflation25th February 2013

My Economics tutor’s favourite saying was “Inflation is the greatest social evil”. But when we talk about inflation, what do we really mean, and what do we really understand? What is inflation? We’ve been groomed to understand that inflation is the published measure of RPI or CPI. No, this is not inflation, but rising prices. These price rises are a consequence of inflation, which properly defined is an increase in the money supply. Changes in the quantity of money in existence...

The Europe of Broken Dreams, Part 5: Default20th February 2013

I’ve taken an extra couple of days to prepare this blog, for the issues it raises and the potential threats it portends should not be taken lightly. You have been warned. We finished our previous blog, part 4, on Europe by suggesting that the struggling Eurozone states, who are in a mess as currency users rather than issuers, may have just three choices: 1) To meet the austerity criteria required by the ECB, which can’t work because even in the unlikely event that they eventually sort...

The Europe of Broken Dreams, Part 4: Depressing Repression9th February 2013

Our series on Europe continues, and the news continues to heat up. Ignore the apparently great news on the politically negotiated reduction in the EU budget. Even if it happens it is a tiny pinprick in the scheme of things, and is utterly irrelevant when compared to the scale of the Eurozone’s debt challenges. Don’t get me wrong, we may ultimately need politics to solve the challenges, but politics is what created this mess, and there seems to be no understanding or desire to get a grip....

The Europe of Broken Dreams, Part 3: Baffling Borrowings4th February 2013

The news from Europe continues to escalate. Funny how things were so quiet just a few weeks ago, but such is the calm before the storm. Over the last week we have more news from Spain. Their parliament is seeking to peel back regional business rules, under which the country’s 17 autonomous regions all have their own business regulations and permits. Want to start a business? You have to wait for all the permits! Want to become an interior designer? That’s a regulated...

The Europe of Broken Dreams, Part 2: Leveraged Banking, it takes Three to Tango28th January 2013

Well Europe is quickly back in the headlines with speeches and opinions galore. In last week’s blog we took a foray to Spain, one of the largest and most troubled European economies, to introduce our FYI blog series on Europe. We also briefly looked at how banks create money, as this is a crucial starting point to understanding the economic situation.[1] So why choose Spain, when Greece has been leading the European troubles? Well, a Financial Times article by Victor Mallet piqued my...