Monday, May 7, 2012

IMF and World Governments Listen Up

It is well worth a listen.

 On the 28 March 2012 at the London School of Economics, I asked the Question what the Electorate of France and Greece thought about current Policies and would they Vote against them

At 49 minutes in

Amazing in late March IMF et al did not think there was any Concern there would be a massive electoral swing away from the current Austerity program. "As stated it was a Secondary Issue"

Listen Up IMF, ECB, FED Banks and Government.

People have had enough of paying the price.

This time No more Bailouts let Bondholders Banks and IMF take the hit.

Sunday, May 6, 2012


To the Chancellor of the Exchequer

Dear Mr Osborne

Re : Immediate Settlement of All PPI Claims

On behalf of the British Public I order you to immediately FORCE BANKS TO PAY-OUT PPI NO QUESTIONS ASKED if a Claimaint has a  a policy that Conforms to the Defintition of PPI given by Financial Services Authority

The FSA  define Payment Protection Insurance as  43A non-investment insurance contract which has elements of a general insurance contract and the benefits of which are described as enabling a policyholder to protect his ability to continue to make payments due to third parties, or can reasonably be expected to be used in this way.

1.     FSA define Non-investment Insurance Contract  as non-investment insurance contract
2.      FSA define General Insurance Contract as general insurance contract
(in accordance with article 3(1) of the Regulated Activities Order (Interpretation: general)) any contract of insurance within Part I of Schedule 1 to the Regulated Activities Order (Contracts of general insurance), namely:
(a) accident (paragraph 1); (b) sickness (paragraph 2); (c) land vehicles (paragraph 3); (d) railway rolling stock (paragraph 4); (e) aircraft (paragraph 5); (f) ships (paragraph 6); (g) goods in transit (paragraph 7); (h) fire and natural forces (paragraph 8); (i) damage to property (paragraph 9); (j) motor vehicle liability (paragraph 10); (k) aircraft liability (paragraph 11); (l) liability of ships (paragraph 12); (m) general liability (paragraph 13); (n) credit (paragraph 14); (o) suretyship (paragraph 15); (p) miscellaneous financial loss (paragraph 16); (q) legal expenses (paragraph 17); (r) assistance (paragraph 18).2

For ease of reference :

Mr Osborne No questions were asked when we Bailed Out the Financial System. The Banks should Not be asking questions if a Complaintant has a ppi Policy as defined by FSA and should immediately settle.

This may cost more than the £5 Billion the British Bankers Associations claimed in their Judicial Review Claim  No : CO/10619/2010 claimed it would cost the British Banking Industry but if you are true to your word that you want to get the Economy moving again, getting the Banks to settle the Millions and Millions of claims still outstanding will immediately get Money Back into the pockets of ordinary citizens.

All replies to this Blog will be issued as a Petition for you to immediately FORCE BANKS TO SETTLE.

Why should ordinary citizens after 1 year still be waiting for compensation and possibly wait perhaps another year while the Financial Ombudsman deals with a huge back-log of cases, due to Banks simply refusing to settle cases Immediately


Toby Chambers

Saturday, May 5, 2012

Is Social Media the next Big Thing ?

Times Change are you changing with the times ?

While I agree that Facebook IPO is initially over-priced, Social Media is the next Hot Investment.

Why ?

Social Media has quickly become a new medium for information sharing and being up to date with the latest information. It is fast quick efficient and offers individual freedom to select different points of view.

Consumers are now sceptical of traditional newspapers particularly since the News Corp Phone Hacking Scandal, this only confirmed our suspicion.

While there will be a place for traditional printed newspapers we are all reading our news on Mobiles and the Mobile platforms require short sharp messages as we scan through the information selecting what we want.

I have been using mobile news since 2008 and while it took time to adjust as many web platforms were not compatible and at first cumbersome, this has radically changed with Mobile platforms now first priority and so navigation is great.

As the use of Social Media has grown, so to has Brand advertising and while it is still in its infancy it is projected to reach over $ 8 Billion in advertising revenue by 2015. In the current tight ad budgets this is a market to be in

Traditional newspapers simply can't compete with Social Media and will be left stranded if they largely rely on traditional printed material.

As an investment strategy Social Media sounds very promising.

Friday, May 4, 2012

End of the Commodity Super Cycle ?

Is the beginning of May 2012 the end of the Commodity Super Cycle ?

I possed this question to Mr Ruchir Sharma at his presentation "Breakout Nation" LSE on 30 April 2012 and following his presentation I suggested that we pencil in this date as the beginning of the end of the Commodity Super Cycle.

Listen to the presentation

The Key reasons for an end to Commodity Super Cycle as discussed in the presentation plus my own thoughts and analysis

1. High commodity prices have resulted in many new mines being developed and have taken many years to come on-stream.

2. China's rapid growth has come to an end. Lower overall demand will feed into commodity producers constantly accepting lower prices, rather than has been the case in recent years of producers dictating prices.

3. The Euro-zone is now clearly back in Recession, with little prospect for rapid growth.

4. High commodity prices have depressed overall disposable income and feed into lower overall consumption. In the coming years overall demand for commodities will be well below the levels we have recently seen as the growth of the developing nations slows considerably.

5. The Commodity producing countries, have seen large capital inflows with their currencies now far too strong, resulting in loss of productive competitiveness. Australia Brazil  case in point.

6. The Financialization of commodities is coming to an end. I suggest that we are now entering a phase similar to 2008, although this time the general public will not stomach the bailouts of Financial Firms and we will soon witness a financial crisis much worse than 2008. In 2008 several big named financial firms were able to use "Bailout Money" to stock-up on Commodities, but this time that luxury will not be possible as their own financial survival depends on liquidating everything.

7. Consumers in the Developed world have altered their behaviour and now are very concerned about purchasing fuel efficient vehicles, using public transport as an alternative, walking and cycling. This can clearly be evidenced with Western European oil demand now below consumption recorded in 1994.

8. Renewable Energy, while still in its infancy provides a glimmer of hope that the renewable energy industry will be a growth area, leading economies out of the Current Depression including Greece, resulting in lower overall demand for traditional coal and oil.

9. Recycling and reclaiming materials is growing as more efficient methods of processing recycled materials are developed, reducing the need for the extraction of raw commodities. Consumers are also playing their part with a Boom in mend and repair.

10. High Food Prices have been forcing city dwellers to either Grow Their  or Own, local community food growing or has recently been cited in Greece returning to farming as a way of earning a living.  Improved climatic factors will also improve crop yields in the coming years.

As of writing today 4 May 2012 WTI Crude  had a 5% fall before settling  below the $100 and I suggest that in the coming weeks with no stable government in Greece, just like we saw in 2008, there will be rapid unwinding of Commodity Contracts and it will be a race to the bottom.

Time will only tell if the analysis is Spot On.

You be Judge and Jury.

All I can offer is that the quicker the Commodity Bubble Unwinds, the quicker the world's economic engine will spring to life.

I will leave with one final thought

The Book "Breakout Nation" by Mr Sharma offered a set of principles in identifying countries with potential to be new growth Nations. I suggest Greece could be that New Economic Miracle and could easily take-over from China in being a production powerhouse for Europe, once Greece exits the Euro.

Thursday, May 3, 2012

Greek Money Supply

This Chart Says it all

The Imploding Greek Money Supply


The money supply will quickly turn positive once Greece Exits Euro

Tuesday, May 1, 2012

Greeks Show Courage

Dear Greek People

While your leaders Claim that Austerity is the only way, this is only to protect the same Banks that have stolen from you since Austerity was thrust upon you.

A countries Debt balance is in reality  a Theoretical number between the Country, Bank and intermediaries such as ECB and IMF.

There is no reason why this Theoetical number can't simply be Cancelled

Businesses do it all the time, where a Theoretical Balance is agreed to be written-off.

It is a pity the Centre Left and Right parties in Greece Do not show Courage and do what is right for the Greek People.

Even after all the Austerity by 2020 the debt to GDP is basically the same, so what is the point of all this austerity to end up with the same Debt to GDP ?

 We are ever hopeful this would be a new beginning for Greece

A Berlin Wall Moment In History

Are we witnessing a Berlin Wall style of moment in history ?

The old guard is starting to fall

We have just had the Murdoch Report and his days are now numbered as an influenctial power base

We have French and Greek elections coming up this weekend. It looks very doubtful that Austerity will be maintained

We have the end of the Commodity Super Cycle

In reality the old powers have clung on since 2008 when the whole system should have collapsed.

We still have not dealt with the Banks but their days are numbered should Euroland simple SAY NO ENOUGH and simply default.

Do not get me wrong the shifts that are happening will be very disruptive for a period, but they will set the scene for prosperity. The worst case scenario is a War, but lets hope and pray the old guard go quietly.

This is a momentous week.

Friday, April 27, 2012

A Blueprint for Greek Economic Future

1. In the coming Greek elections people have to VOTE AGAINST MORE OF THE SAME.

2. Current policies have totally failed, they have only enabled the elites to transfer money out of Greece.

3. It is the Rational Expectation that eventually Greece will have to exit the Euro that is causing Capital Outflows from Greece in unprecedent historic proportions. This Capital is never going to flow back into Greece until such time as Greece Exits the Euro and returns to a different currency either Drachma or an alternative name for a new currency.

4. Despite many Greek concerns, exiting the Euro WILL NOT automatically banish Greece from the EU, far from it. In actual fact a Greek exit from the Euro would in fact potentially strengthen EU relations as it is the current economic tensions brought about by the currency unification that does not allow a currency devaluation as a quick and efficient method of restoring economic competitiveness that is causing the current European tensions.

5. On a Greek Euro Exit, The So Called "FIREWALLS" should only be used to ensure that current business contracts priced in Euro's allow for the currency adjustment, aiding a smooth transition.

6. Despite the fear of massive inflation in Greece on a Greek exit of the Euro, I would suggest as happened in 2008, there would be such a massive and quick unwinding of speculative commodities contracts as the financial system realizes the game is up that Crude Oil contracts would fall from the current over $100 Dollars a barrel to at least $50 Dollars a barrel. This would counter any new Drachma that may also halve in value.

7. While the initial value of new Greek Drachma currency will inevitably fall exceptionally heavily, as Capital inflows back into Greece take hold, the new currency will stabalize and will actually begin to rise as investors want to be part of a Greek Economic reconstruction. The stabalizing of the new currency and the Capital Inflows of capital that has fled Greece in the past well over 2 years now, will significantly reduce the need for Greece to print money and Inflation will not be as rampant as the many scare mongers of a Greek exit may claim

8. In any Greek economic restoration "Social Enterprise" should form the back-bone of the new economy allowing for all people to be involved and not just the few who may attempt to buy up assets on the cheap.

Whatever the eventual Political outcome on the 6 May for Greece, the world is praying for all the Greek people, that this will be the turning point and the powers that be implement an economic program that allows Greece to Default and Exit the Euro, as this is the only path for an economic recovery.

Monday, March 19, 2012

Collaborate help Develop New Economic System

Please share your ideas on a New Economic System to replace the current system.

The Great Depression created the environment for New Economic thought and right now across the Global the Best Thinkers are needed to Collaborate and help develop a New Economic System.

I welcome your Collaboration.

Please Email me

Toby Chambers

STATE CAPTURE by the Financial Services Industry

State Capture is generally associated with Corrupt Countries where a small number of firms (or such entities as the military) are able to shape the rules of the game to their advantage through massive illicit, and non-transparent provision of private benefits to officials and politicians. Examples of such behaviour include the ability to control legislative votes, to obtain favourable executive decrees and court decisions. A new phynomena of "State Capture" where "Too Big to Fail Financial Institutions" dictate economic policy is now evolving since the onset of the Financial Crisis in 2008.

The UK economy has now been infiltrated and hijacked by a self serving group of Bankers and Financiers who have no regard in re-distributing wealth to the many for the overall good of the country, but seek to engross themselves at the expense of Civil Society. This cannot continue and the Financial Industry can no longer hold the UK to ransom. Go back in history and the Great Depression is eerily similar, but Banks were allowed to fail in the Great Depression. 100 years ago Bank Executives were held personally liable for a Bank's failure, now they walk away with Golden Handshakes. Many economists claim that Bank failures caused the Great Depression to be so prolonged and deep and the Federal Reserve allowed the money supply to contract so sharply. I disagree with this analysis and suggest as Hayek does that Banks should be allowed to fail. However I suggest to significantly reduce the impact of a falling money supply when Banks are placed into Insolvency and Depositors withdraw their savings that Bank Savings Deposits should only be protected in any form of Bank Insolvency and immediately  new "Good Banks" without the legacy of "Toxic Assets," be Incorporated with  local community people taking over the governance of these new entities. Financial Elites would loose in such a scenario given the fact that over recent years Share Bonuses have been given on top of monetary bonuses. The so called "Fire Wall" should only protect Bank Saving Deposits held by a Bank that at best now comprises in most cases less than 10% of a Banks Balance Sheet. In the current Financial Crisis if you had forgotten, goes back to 2007, now coming on 4-5 years and we do not seem any closer to solving the fundamental economic problems, so it needs a total re-think. Top Bank staff even now in 2012 are still rewarding themselves handsomely for Failure and the 99% have had enough. Yes Prime Minister we are not all in it together. Financial Institutions who have been bailed out by the State should be considered as "BENEFIT SCROUNGERS," and should not be considered as "Folk Heroes." Giving them now a third chance after 4 years since 2008 to pull the economy out of The Abyss when everyone else suffers is totally unacceptable. The economy simply will not recover when the wealth of a country is so highly concentrated in the hands of a few, who were bailed out in 2008 and continue to squander the countries wealth at the expense of everyone else.

The calls for Bailouts in 2008 were not from the very poor, but the very very elite Rich who would have lost everything had the Banks and Financial Institutions been allowed to have failed in 2008. The Balance sheet of a Bank is in most instances at best comprised of only 5%-10% of general savings deposits. The 90-95% of Banks Balance Sheet is typically Toxic Assets (ie assets that become a major liability for the Financial Institution if the claimed market value of the asset falls and has to be marked down to true value, such as has just happened with Greek Debt in March 2012.).

Capitalism is about efficient allocation of resources, traditionally Land Labour and Capital. Banks and Financial Institutions in the current Capitalist system decide which oragnizations are allocated capital, it is very questionable that market forces are allocating capital efficiently, given the sheer size of the "Too Big to Fail Banks." When these mega Financial Institutions now have Banlance Sheets far greater than a Countries GDP, market distortions could easily occur when large Financial Institutitions consider, "It in their self interest, rather than liquidating assets and accepting the market price, to leverage up and borrow even more in the HOPE that in the long term the toxic asset can be made whole."  In its simplest form, this is exactly what the  European Financial Stability Facility (EFSF) is designed to achieve. A short term fix in the hope that all will be merry in the long term. They talk about "Fire Walls" but these so called  "Fire Walls" are only designed to redistribute wealth from the 99% to cover up the losses of the 1% elite. Case in point ECB in March 2012 dispensed 1/2 Trillion Euros for 3 years at 1% to the Financial Elite and yet all these Financial Institutions in 2008 were on the verge of Bankruptcy. A poor person with a poor credit history would not have a hope of borrowing even £1000 at 1% and yet the financial elite through the way the current Reserve Bank Monetary Capitalist system operates are able to borrow infinitum  "Free Money" very soon after they were on the verge of Bankruptcy. These Mega Financial Instutitions also get to decide where the money from 1/2 Trillion Euro's goes into the economy. Market Forces can not possibly be allocating this money efficiently as a  few well connected elites decide where the money goes in the economy, that can only but be described as "STATE CAPTURE"

Governments including the UK government are now held hostage to "The So called Market" as any hint Government borrowing will increase will lead to money markets dumping UK sovereign debt. The irony is that "The So Called Market" is not you and me, but these major Financial Institutions and Hedge Funds supported by huge leverage from the Financial Institutions who were Bailed Out by Governments around the world in 2008. It is beyond belief that Governments can be held hostage under such a scenario, but this is where we are in 2012. Governments can't default on their Soveriegn Debt for Fear the Market will punish them and yet, Keynesian Economic Theory suggests that Governments should be borrowing and spending in times of economic uncertainty, but borrowing from "The Market" will lead to Credit Downgrades and as we have seen with Greece, "The Market" heavily punishes a country, forcing Austerity upon the Country.

Japan has been caught in economic stagnation for 20 years, largely because they have not accepted the Bank Balance Sheet losses since the Economic bust in the 1980's. UK is quickly following Japan with endless Printing of Money now Quantitative Easing is used as a euphemism to deflect attention from the fact that QE is the only policy tool now available since interest rates have been at rock bottom for several years. QE leads to massive inflation, simply look at the price we are all paying at the Forecourt. In yet another twist to "State Capture" the Financial Institutions can front run the purchase of Crude Oil contracts from QE before the real market, yes that is you and me filling up a few litres of fuel at the forecourt have a chance.

While harsh, the only Solution to restore economic equilibrium in the UK is to allow Banks to be placed into Insolvency, but with a caveat to build a "Fire Wall" to protect Depositor Savings only. Since 2008 there has been no attempt to establish mechanisms to place Banks into insolvency and isolate Depositor Savings with Deposit Savings transferred into a Good Bank owned by the people for the benefit of the people.

Have your say at E-Petitions Now

Stop the endless Bailouts

Be part of a London Peoples Bank run by the People for the People

Toby Chambers
Economist and Social Entrepreneur