Economic peril
Ever since I was corralled by David Strahan (of peak oil podcast and BBC fame - the former being more prestigious a gig for the guy than the latter, obviously) into news-gathering for ODAC (Oil Depletion Analysis Centre) about a year ago, I've become acquainted with the reportage of Ambrose Evans-Pritchard (I keep tabs on the Telegraph).
The guy has a painstaking tenacity for digging facts, figures and stats, and weaving them through a story such that you end up both more enlightened, and doom-laden at once.
Although his coverage of the topic has been less frequent of late, his attentions have turned to the current financial meltdown instead, on which he muses regularly on his blog.
Look what he slapped us with last week when commenting on the slide of Sterling (Warning: do not read unaccompanied):
The danger is blindingly obvious. The $4.4 trillion of foreign liabilities accumulated by UK banks are twice the size of the British economy. UK foreign reserves are virtually nothing at $60.6bn.
SERIOUSLY ALARMED :: Ambrose Evans-Pritchard
Gulp.
And we're talking about the real possibility of nationalising some - or all - our banks?
"If the Government is forced to nationalise RBS and perhaps Barclays with their vast exposure in dollars, euros, and yen, it risks being submerged."
In other words, we don't have nearly enough foreign currency.
He concedes the banks have foreign assets to match the debts but reminds us that no one actually knows how much they are worth.
There... both enlightened and doomly-ladened, aren't you.
The above all probably goes some way to explain, on the one hand, the calls from major economic powers to resist protectionist policies ('Buy British'), and on the (contradictory) other, our seemingly relaxed attitude towards our devaluing pound (stimulate exports, lower imports) - something that's already pissing the Irish off as shoppers and businesses hop across the border.
Blogging from the World Economic Forum in Davos this week, Ambrose yesterday cyber-slapped readers to another reality: China's trade surplus is currently running at $40bn a month - "the highest ever recorded by any country", he writes.
Better still:
Beijing has amassed reserves of $1.9 trillion.
US-China currency war eclipses Davos, and threatens the world.
Feeling morbid?
Tags: debris
