In yesterday’s article on Europe’s fiscal integration we managed to ruffle a few feathers of those (presumably from) the English island. We’ve taken the liberty of reprinting some of their comments below:
First let’s start with a nice (warm) beer… then let’s talk money.
Dear Mr Denning,
Having read your piece of 12th Dec, with a reference to us Brits as cranky and drinking warm beer, I must take exception! We may well be cranky but our beer is very suitable for our climate, thank you very much!
The point about warm beer is that good ones have flavour, body and character – probably why we put up les deux droigts to Merkozy!
Thanks for your pieces.
Gentlemen of Daily Reckoning,
The island people were apparently sensitive to our criticism yesterday. We also received this, which we reprint at the risk of breaking some sort of racial vilification law or other:
English beer is, as you put it, warm, because that’s how best to taste it. It is, being British, brewed differently from the beer of lesser races because, like English cheeses and losses of Empires, we DO THEM BETTER.
Sex is a different matter, about which we do not talk. The beers of lesser races are fizzy lagers which taste absolutely foul if not frozen; try a Foster’s without fizz and at room temperature. You would not give it to your mother-in-law. British beer is intended to be drunk at room temperature and is so good that it does not need bubbles with which to tickle the palate.
As for our not signing up to the Germano-Frankish financial dictatorship; we have been fighting the bastards for the last 1000 years. Do you expect us to give up the one and only national sport at which we do best? Cricket is an unsatisfactory substitute and the French and Germans can’t play it.
And as for limitless growth and economies, any economy founded on the assumption of unlimited growth is bound to founder. Time for economists to look at reality and study shoals of frightened fish gambling on how long a growing population of cows can continue to eat the same old grass in the same old field whilst increasing milk yields for the farmer.
And serfs only working 1 in 10 days for the overlord? Bring it on! I could do with a reduction in taxes. Only billionaires get that privilege these days.
We’ll take that feedback in the spirit in which it was offered, and hope the thought/speech police do the same. In the meantime, here’s another, less friendly reply to yesterday’s letter. This time, we’re taken to task for having it both ways.
You write a funny article that throws around a lot of figures and asks questions that you either, don’t bother to answer, or don’t know the answer.
You say ‘someone” will have to come up with $10.4 trillion next year (Do you really understand how much money that is?) without saying who that ‘someone’ might be. You seem to infer, – and I might be wrong here – that there is a multitude of unknown, unidentified, and to all intents, ‘phantom’ investors, floating around the world with that sort of money in their pocket which, for some strange and inexplicable reason, they need to “invest” – or in truth – “gamble”- so that they can acquire even more.
Why on earth would people with trillions of dollars up their sleeve, want to acquire more? And why does anyone have to come up with the $10.4 trillion anyway? – What happens if “they” don’t? Can’t “we” just write it off and start over again – whoever “we” is? Maybe, “we” can come up with a more practical and rational system than the stupidity “we” currently accept?
You then make the claim that “real money is better than unsound money”. On the surface that is a rational statement, but when one thinks about it, we ask – what defines “real” money and where is this “commodity” supposed to come from? In truth, “money” is not a commodity at all – it is really just a ‘ticket’ system that people can use as a medium of exchange.
I know you are going to say that “real” money is made of gold or backed by gold – but – what happens if a country doesn’t have any gold, or only a limited amount?
As I see it – the crucial question is -“Where is ‘Money” supposed to come from in the first instance?” Is money” the private property of a certain class of people – or – is “money” supposed to be a public service to make it convenient for people to buy and sell products instead of having to resort to a cumbersome Barter system?
I guess you will just toss this in the ‘too hard’ basket and say, “Who’s this stupid bugger asking stupid questions like this? Everyone knows a society can only exist if everyone has to go into debt to the bankers. God forbid, letting the public have access to a money supply through their government – that would be the end of the world – or maybe, just the share markets – as we know it!!!!”
For a person who professes to know a lot about finances, it would be interesting to occasionally read some really practical suggestions about how the existing system might be progressively changed to make it a better place for people – and not just ‘investors’, as you like to call the gamblers.
Graham, you are either a new reader of the Daily Reckoning or were having a really bad day yesterday. We hope today was better. Thanks for your note. It reminded us that there are always new readers to the Daily Reckoning who may not be familiar with the arguments we’ve been making for years.
Our point yesterday was that $10.4 trillion IS a lot of money, especially when no one has it. As we’ve said before, the only way out of the debt crisis is refinancing, restructuring, or default through devaluation. Of the three options, only the second and the third are now realistic and likely.
People who don’t have gold can trade for it by producing things. Money isn’t a public service. It’s a means of exchange and a commodity. Gold is money because its physical properties – scarcity, durability, portability, homogeneity – have made it especially useful as money.
A government in control of the money supply will always abuse it to make war internally and externally, and to pay for accumulated debts through inflation. If your solution to the current crisis is to give the government more control over money, you should probably unsubscribe to the Daily Reckoning immediately.
We don’t profess to know anything about anything. But we don’t mind thinking and saying what crosses our mind. And what crosses our mind is that the existing system is based on unsound money. If you want to progressively change it to make it better, you’re barking up the wrong tree, and barking mad. The system is stuffed.
A sound monetary system based on gold promotes honest labour, prevents the theft of your wages and labour through deliberate inflation, restricts the ability of the government to make war and limit individual liberty, ensures that real resources are directed toward projects that produce surplus value, and generally promotes a world where our experience with one another is mediated by mutually beneficial trade.
The alternative is what we have now: an intrusive, coercive State in collusion with Big Finance and the Military to put us all into debt and in a perpetual war of all against all. Individual liberty promotes a better quality of life than the centrally planned State. The sooner the current model fails, the better the world will be for everyone, and that includes investors, punters, gamblers, speculators, and people who’ve never owned a share in their life.
for The Daily Reckoning Australia