Tel. +44 (0)20 7287 4414
Tel. +44 (0)20 7287 4414
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Déjà Vu and a Confected Crisis

crisis-5238323_1920 Crisis. What Crisis?

An energy crisis hit world economies and after almost three years the pain exploded in most countries. The exception was the USA. Acting pro-actively President Reagan slashed regulation to free the economy. He fired over 11,000 striking air traffic controllers. Breaking the strike. An action Paul Volcker saw as a 'watershed' moment in the battle against the wage-price spiral. The dollar soared. In March 1985 I was working in Nigeria. I listened to the BBC's world service as the financial crisis worsened. The experts solemnly stated that the pound was going to parity with the dollar, then below and would never recover. The rate hit $1.02 to a £1. We ignored the doom-sayers. It was obvious that the high dollar would hurt US exports and was unsustainable. To restore order the USA, France, West Germany, Japan and the UK and signed the Plaza Accord, which agreed to depreciate the value of the dollar. By years end the $/£ rate was 1.44.

The 1985 crisis was the result of OPEC rationing oil output and the price reached a 2022 equivalent level of $130 pb. OPEC's policy led to weaker demand and increased non-OPEC production. In 1986 OPEC changed tack abandoning price for market share and the energy crisis was over. The world breathed and grew. BoE interest rate in 1985 averaged 12.43%. At the end of 1986 it was 10.88%. If all this sounds familiar it's because we continue to suffer the results of governments incompetence and group think based on 'Expert' opinion.

The government's mini budget has sparked hysteria in markets and sections of the Tory party. Why? 90% dealt with providing aid to households to cope with energy costs, which by its nature is unfunded. The rest was reversing announced tax rises and two small reductions. One percent off the standard rate of income tax from next April and reduction of 5% in the top rate. Compared with the energy intervention the tax announcements are a drop in the ocean. The furore over tax cuts being unfunded is confected or do its opponents also oppose energy help? The UK has the second lowest debt to GDP in the G7. Our economy is still growing. The EURO has tanked and is now below parity to the dollar. The Chinese Yuan the world's second largest Currency is at a record low against the dollar. Bond yields are at a ten-year high in France and Germany. There are serious concerns in the US that falling stock markets will fall further because of the dollar's strength.

Back in the UK. Inward investment is up and French firms are buying into British ones. According to Ernst&Young "In a survey of global investors, the UK came out as the most attractive European country for future FS investment, with Germany 2nd and France 3rd". Writing in Money Week 29 September , Max King observes "The view that the reaction of sterling and the gilt market reflects badly on the Budget in the eyes of financial markets is highly questionable. Bond yields are rising around the world and the UK has had some catching up to do." One might add that if the Bank of England had not dragged its feet and matched the Fed, we would not be in this mess. Except. Is this actually more about a decision of the British people than fiscal probity?

Since the BREXIT vote governments have refused to implement the changes we voted for. The shocking attempts by May, Labour and the LibDems to overthrow democracy were met with a crushing defeat at the election Johnson won. And then? BRINO. Talk about talks and more talks always fuelling the belief that we would rejoin. The more the government vacillated the more pressure was exerted. From the EU, USA, and of course International Organisations and the Civil Service- to say nothing of the BBC. The simple self-help mantra. "If we do not believe in ourselves, why should anyone else?" Sums it up. Early indications are that the Truss government is going to continue talking. What lame brain is selling the idea of meaningful discussions with a brick wall? The chickens of past inertia and profligacy are coming home to roost. We need action, not words. Unless BREXIT is completed the desire for a reinvigorated economy and country will wither on the vine. Our potential as a European Singapore a sad joke. Without fully implementing democracy, Kwasi Kwarteng's mini budget stands no chance of success.

It should be obvious that much of the market turbulence is due to Remoaner hopes. The Cheerleaders of hysterical economic Armageddon are those who led project fear. They have 'Skin in the Game'. John Major, Ken Clark, Mark Carney (the money printer extraordinaire), Starmer, Davey et al. join with the EU, Biden and others to whip up a frenzy over very little. The IMF's impertinent intervention is a reflection of those who oppose an independent UK. Examining the IMF's leadership is instructive. Kristalina Georgieva Managing Director of the IMF was formerly Vice-President of the EU Commission and acting president of the World Bank In 2021, an independent inquiry determined that Georgieva had instructed staff at the World Bank to inflate data to make China look better during her tenure as Chief Executive. No action was taken against her, and she followed convicted fraudster Christine Lagarde (Now head of the ECB) as IMF Chief. Fully implementing BREXIT will unleash our potential. It will also remove the hope Rejoiners nurse of overturning our democracy.

This is an existential crisis. Not financial, but political. The tentative reforms proposed by Kwarteng are going to fail unless the Truss government has the courage to finish the job. Unless our democracy is put out of reach we may well find ourselves with a coalition of Labour and Lib/Dems. Starmer worked hard to overthrow democracy. The Lib/Dems are unashamedly in favour of sacrificing our freedom. Their only contribution has been to set a tremor scale so low that one might be prosecuted for dropping an empty plastic bottle. The Green madness is now seen as a threat to health, peace and prosperity. I wish Truss well, but she must step up and deliver in all areas.

The media and opponents of democracy have claimed the scalp of one prime minister because he supported democracy. If they are allowed to succeed against Truss it will be a savage near fatal wounding of democracy. She must stand firm. She could do worse than model herself on Pitt the Younger. The hatred and fury directed at the UK since BREXIT is indicative of an anti democratic elites fear of losing control. Not for the first time we are a torch bearer for freedom. When Pitt became Prime Minister his administration was mocked as the "mince-pie administration" not expected to survive beyond Christmas. It survived for seventeen years. Let us hope that fully implementing BREXIT will enable the great man's words "England has saved herself by her exertions, and will, as I trust, save Europe by her example", be true once more. 

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Director : Robert Oulds
Tel: 020 7287 4414
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The Rt Hon. the Baroness Thatcher of Kesteven LG, OM, FRS 
Vice-President : The Rt Hon. the Lord Lamont of Lerwick,
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Director : Robert Oulds MA, FRSA
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