Friday, October 10, 2008

London Calling

London calling to the faraway towns
Now war is declared - and battle come down
London calling to the underworld
Come out of the cupboard,you boys and girls
London calling, now don't look to us
Phoney Beatlemania has bitten the dust
London calling, see we ain't got no swing
'Cept for the ring of that truncheon thing

The ice age is coming, the sun's zooming in
Meltdown expected, the wheat is growing thin
Engines stop running, but I have no fear
Cause London is drowning and I, live by the river

London calling to the imitation zone
Forget it, brother, you can go at it alone
London calling to the zombies of death
Quit holding out - and draw another breath
London calling - and I don't wanna shout
But while we were talking I saw you nodding out
London calling, see we ain't got no high
Except for that one with the yellowy eyes

The ice age is coming, the sun's zooming in
Engines stop running, the wheat is growing thin
A nuclear era, but I have no fear
Cause London is drowning and I, I live by the river

Now get this
London calling, yes, I was there, too
An' you know what they said? Well, some of it was true!
London calling at the top of the dial
And after all this, won't you give me a smile?
London Calling

I never felt so much alike, like-a, like-a...

This Clash song just perfect for the meltdown Friday.

In the current conflict London holds more position than many analysts give her credit for. Certainly she was gloated on cheap money, but cheap money was almost always over 4% Bank of England. At the same time the US had primes at 1% to 2% with MORE economic growth.

The dollar fell and money became cheap in America. This made the sub-prime crisis possible but I imagine if not that something would have burst the bubble of debt. It could have been credit cards, car loans, home improvement loans, or investments somewhere around the world.

What is important here about sub-prime is that it happened in the US and not the UK.

The UK will suffer but it does not contain the problem DIRECTLY.

The plague is in the US and essentially the property market in the UK though inflated is in far better condition than the US market. The UK is exposed for US debts it has purchased on the markets, but it likely holds less of these than US banks. Well accept for Iceland, assuming the nation even exists after I post this.

In case of a major house value problem the Government could instruct councils to buy extra properties. The councils would then rent them as flats or houses, or earn government credits for providing rent at loss to investment. There is simply no such program in the United States to support a housing price floor that I know of. If I am wrong hear please leave a comment.

And England is far more crowded with quality properties. London property remains a strong position.

This gives Brown a stronger position as he faces Obama, someone I think he will be happy to work with. The UK consumer and credit markets should remain stronger than the US counterparts and money from Asia to the west will often flow through the Docklands and the City.

Brown is made even stronger by Cameron's obvious conclusion that he does not really want to be Prime Minister in 2010. The Great Peace of 2008 makes Brown very strong, much stronger than Bush in the United States On the issue of the economy Brown faces no opposition, all parts have formed a blue, red and yellow alliance.

The meaning of this is important. Brown has a fully unified a total majority along lines that he can effectively argue are in the economies best interest. This has and will include nationalisation of banks, once a crazy dream of Labour Socialism is what the markets demand.

Brown will be the ugly stern face over a mass nationalisation of an already very nationalised UK economy. British economics is a strange mix of neo-liberalism and big state. Really it is the Late Capitalism of Post-Marxist thinking. But this mix of power will move from the City to Westminster over the coming years, with a Labour Conservative alliance on economic policy making a more 1970s style England.

Now to my fellow Americans in faraway towns, you have to understand the terror that the term 1970s holds for the people of Britain. The Clash capture a time that continues as a history and myth of strikes, inflation, confused economic policy and poverty.

Since the 1980s the UK has prospered. This is not unusual. British people like Americans and all the Anglo-States are very good at making and controlling trade and money. This is their defining feature. In the 1980 to recent present the UK has grown rich, fat, and massively tasteless. Mass wealth has enabled all classes of British society to flood every bar in the world and spread their reputation as drunks. English have purchased communities in Greece and Spain*. They have built massive equity in an excellent property supply and a very modern economy. They have no industry power but they profit in the information and imagination economies.

Beyond the UK Brown has a very strong position in the EU. Being something of an outside in the closer club of France and Germany Brown is a perfect executive. The EU has problems but the strong Euro will mean the value of US assets will improve as the dollar increases against the Euro. With the Federal government pricing and buying toxic assets EU banks can find they have an exchange advantage, though generally I image they have some derivative that exposes them to risk of falling Euros.

The Key Event right now is that the US leadership will not be able to act as an executive until next year when Obama becomes President. Bush is powerless. China has the money, but China's leaders never take global stands, so right now the strongest voice of Confidence must come from Europe. Europe is in a unique event and Brown suddenly finds himself very close to the centre of the Universe. I argue that this is a natural position for the UK in Europe**


*I meet "fellow" British all over the world. After 9 years I think I can consider myself British. I was hear for the gas lines, 9-11, Iraq, the London Bombing and all the little dramas of this strange Island. When the Queen mother died I went with workmates to see the cars of the Royals go by and I was happy to see the Queen and her family. And when the WWII planes flew by I felt a pride. I guess when you are proud of a system that you are contained in you become part of it.

But I do go on.

**When Europe has even been existentially established or endangered England has played the Constitution of a Allied Europe. The most noteworthy was their fine hour of early World War II. But they also turned back Napoleon. It was they who ultimately won World War I after their brutal start at Somme. In the 7 years war they held a global empire together against a French effort to wage asymmetrical ware. In America, India and Europe the UK lead allies who made an English war. Winning in India, Canada, for Empire and then in Spain and Belgium for a national Europe. Britain established a Europe of small nation states. They stopped France and German efforts to establish themselves over a new Rome and with the American stood down Soviet efforts to do the same.

This role is natural for a British Prime Minister, proclaimed by the opposition and speaking through the mouth of the Queen is position in drama of history that no other European leader has. The role of British Prime Minister has a dignity and antiquity no other office in the world can claim. He speaks from the same position where the Anglo people alone said no to Hitler, speaking also with the voices of Canadians, South Africans, Indians, Muslims of various nations, Kiwis and Australians who stood against the greatest evil in history.

All other offices were shamed by that time.

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