Tuesday, 19 January 2016

Time to embrace the uncertainty

Trade analysts seem fairly united this week in saying that the shipping industry is looking at a "perfect storm" of low prices and oversupply in just about everything. There are unprecedented strains within Europe with Germany reaching maximum absorptive capacity for refugees.

News from around the web paints a very unpredictable future, with nobody quite sure what is going to happen and "emerging economies" going "downhill fast" - challenging a few long standing assumptions. Then from Ambrose Evans-Pritchard we gets this:
The global financial system has become dangerously unstable and faces an avalanche of bankruptcies that will test social and political stability, a leading monetary theorist has warned. "The situation is worse than it was in 2007. Our macroeconomic ammunition to fight downturns is essentially all used up," said William White, the Swiss-based chairman of the OECD's review committee and former chief economist of the Bank for International Settlements (BIS).

"Emerging markets were part of the solution after the Lehman crisis. Now they are part of the problem, too."William White, OECD "Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief," he said.
There is every reason to take this with a pinch of salt in that Pritchard has a penchant for disaster porn, and has made a career out of being massively wrong, but this doesn't sound all that far-fetched. We are very much in uncharted waters here.

One gets a sense that there is a global economic correction underway and it is not going to be pretty. The certainties are all in flux and we might just be looking at a new age of mankind. It may well be that with the world more connected than ever, with the internet in the hands of anyone who seeks it, in the palm of their hands, we have let a genie out of a bottle that won't ever go back in.

I look upon it all with bewilderment and awe. If you think you know what is going on then you clearly haven't been paying attention. We are all global citizens now and a new order is emerging - one that may result in wars the likes humanity has never seen before the new order sets in. Or it may be that our existing structures collapse under the weight of their own constraints. I really don't know. 

I think on this and then I laugh. I laugh like a drain. I laugh because the EU referendum debate is littered with Europhiles saying that leaving the EU "may cause uncertainty". What exactly at this point in time are you certain about? Because I haven't a clue.

I have warned against hyperbole when it comes to reading into world economics, and the doom-leaden predictions should always be met with scepticism. This is because so much of our economy is, in the end, just numbers on a screen and has no tangible impact on the physical world around us; the grass still grows and the sun still shines, but something tells me that the strains and stresses we see represents a natural reordering that defies the obstinacy of our political elites and their pet projects - and by trying to artificially hold the EU together we are attempting to swim against the tide of history.

In that regard I think it time to embrace the uncertainty, accept it and exploit it. We should use Brexit as a means for orderly transition into the new world and start building structures and institutions that represent the world as it is rather than how it looked in the early part of the last century.

We now live in an age of uncertainty where the only certainty we do have is that massive and rapid, unpredictable change is coming. In this we need our wits about us, we need all the tools available to hand and we cannot defer or delay decision making. Nor can we afford the kind of political navel gazing we have seen in the last few years. We need our politics to be fully engaged in what is happening now. We cannot outsource these decisions - especially not to the unelected.

We stand on the brink of something massive, something that will define a new age. An age that will bring wonder and terror in equal measure. Is anybody else more than a little concerned that parliament finds the time to debate Donald Trump? It surreal!

What we need is our media and our political establishment to pull their heads out of the sand and apply themselves to possibly the most daunting global challenge since the last great war. We need minds to focus and we need them thinking about our safety, security and our prosperity. In this we need to be done with the Euro-sideshow and start making decisions rather then delegating them. It's time to part company with old and failed ideas. It's time to put on the big-boy pants and leave the EU.

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