Gold - the new bubble

It hasn’t taken long for the bubble-makers to come up with something to replace the buy-to-let flat.

Apparently, if we convert our wealth into gold coins we’ll be safe from any financial crash, while our new investment will rise and rise as other assets fall.

Gold, we’re told, is the ultimate safe investment.

Well, “safe as houses” used to be a fact.

And the gold hucksters’ sales pitch sounds rather like the property developers’ tarnished rhetoric. (Watch out for irresponsible schemes that enable low-income people to purchase gold at 'fixed' prices with low monthly instalments.)

The thing is, you can still live in a house. Gold just isn’t all that intrinsically useful. Even as jewellery, it’s tacky in any large quantity.

Take a look at the historical fluctuations in the value of gold – the downside is terrifying. The only thing that’s keeping the price up at the moment is hysteria. And even that won’t be enough when Joe Average realises he can’t afford the stuff at today’s price – and really doesn’t need it anyway, at any price.

The people who moved into gold early have already made their profit. Now the latecomers and the conmen are hoping we'll make them rich. Sorry.

Why trust government to regulate their own banks?

Now, with both the means and the incentive to milk the next economic bubble, why trust the UK government to do an effective job of regulation?

The UK bank bailout is a fantastic deal for the government: giving them a huge amount of boardroom clout, first dibs on profits and all at a fire sale price. In a couple of years, the taxpayer is going to start reaping the benefits. We’re always demanding windfall taxes from whichever corporations are making the most outrageous profits – well, now we’re going to get them.

And the forthcoming regulation won't stop that from happening. Because, after all, when has self-regulation been effective? In the case of governmental self-regulation, it's like putting an alcoholic in charge of the pub key.

Not that financial regulation has any reputation for being successful anyway. What it mostly achieves is to lock the stable doors as the horses head for the hills. That’s what the Sarbanes Oxley and Basel II compliance framework was all about – preventing the reoccurrence of Enron and Worldcom. But for all the extra burden it put on auditors and writers of annual reports, did it prevent the credit crunch?

In fact, by lulling investors into the false belief that balance sheets really did reflect reality, they probably helped to make it happen.

So why do we believe that new regulations will work better? While bankers are often caricatured as extremely dull, greedy people, financial innovation is driven by extremely creative, greedy people. They’re already working on finding a new bubble to inflate. Perhaps it’ll only come along in a year or two, perhaps it’s already a germ in someone’s imagination, or maybe it’s already attached to the footpump.

But at first it’ll look like the cleverest thing ever and financial commentators around the world will pump it enthusiastically, explaining how it makes the financial world more stable, secure, efficient, etcetera. The regulators will prod it warily, then give up under a hail of protest – and a couple of meaningful phone calls from their own paymasters.

Because the government will need to milk its new investment for all it’s worth. And they’ll be able to. As major shareholders, with seats on the board, and as both dividend and tax beneficiaries, they have the incentive and the means.

Massive expenses are just over the horizon for the government. There’s the Olympics, far starters. Then there’s all the infrastructure investment that’ll be forced by climate change. Flood defenses. High speed train links. More tunnels under the Channel. Massive donations to more flood-prone countries to stop their people from all getting on the next boat to Britain. Defence spending, so we can menace them with battleships when the donations don’t work.

And that’s why I’m not convinced that the regulators will be allowed to prick the next bubble. Instead it’ll be cheered to the rafters as a new boom. Faster than you can say tulipmania.

Skydiving Everest? Try a zorb.

I'm blogging from the summit of Everest today using voice recognition software. You don’t dare take your gloves off in these temperatures.

I must say I’d been worried that it would feel lonely at the top of the world, but thankfully it’s anything but.

There’s a school party of girl guides (I’ve just bought their last cookies, hopefully they’ve eaten enough to get them down again), a few superheroes from Dads for Justice having a fracas with the Women’s Institute (they’re doing another calendar shoot, fortunately with clothes on this time) and – oh – here’s my next door neighbour just stuck his head over the top and wanting to know what I paid for my permit, seems he got his at a discount and why didn’t I let him know I was coming here so he could have got me the same deal?

That’s just at the top. We’ve also been buzzed by skydivers, chased by snowmobiles, sprayed by snowboarders and there was some bloke in a zorb (giant ball) who went screaming past at some point (literally).

Of course the body count is horrendous, new today is the ‘first nudist to reach the top’, the jet pack guy and a whole stag party who insisted on inhaling a helium-vodka mix on the way up. At this rate, the mountain’s only going to get higher and higher.

Oh well, time to activate my disposable hot air balloon, let the wind float me off the summit, then open my parachute and zoom down to base camp.

I just wish the guys building the funicular would keep the bloody noise down. How can they expect me to do voice-rec in these conditions?

The superstore bubble is about to pop

In today’s economic climate, does it make any sense to force your customers to burn litres of overpriced petrol to waste their afternoons visiting a store that’s sitting on acres of land that’s losing its value faster than your tills can rake it in? Superstores and out-of-town retail parks, yesterday was the tip of your boom.

Yesterday? Yesterday we had a panicky phone call from a friend who’d been stuck in gridlock for over an hour with two small children. Where exactly? In the exit lane of the Tesco car park.

It’s the inevitable result of turning a neighbourhood supermarket into a superstore that now attracts customers from a vast area of North London. Basically, since this Tesco extended its floorspace and somehow squashed in more parking spaces (against the wishes of the locals) it’s become too popular for its own good.

The planning is idiotic. As soon as the parking lot reaches critical capacity, the cars trying to get in cause a jam in the surrounding roads which makes it impossible for cars to get out. Finally, the tailback brings the North Circular motorway to a standstill, followed by more and more of the local roads as desperate motorists try to find a way around the blockage.

As neighbours go, Tesco is one who buys the house next to yours, crams a family into each bedroom, two more in the front room and then diverts their excess sewage onto your lawn.

But I don’t expect it to last.

How many times does anyone want to spend an hour or more trying to leave a car park? Any savings from Tesco’s “deals” are quickly negated by the petrol they waste. The locals already head in the opposite direction to do their shopping. I’m willing to bet that Tesco’s abomination will be a vast white elephant in a year’s time as people turn to smaller supermarkets and the corner store.

(Whoever sorts out an internet grocery shopping set-up that delivers your stuff to convenient always-open local sites will also clean up big time.)

101 uses for a dead Tesco, anyone?

Do I need a diagonal thinking cap?

My sister’s great at thinking literally, logically and systematically. I tend to think sideways in a jangling chaos of pictures, words and noises. Now the ad industry is trying to push “diagonal” thinking on us as the next big thing.

They all have their uses and we all end up, hopefully, doing the sorts of activities and work that make use of our thinking modes. Literal thinkers work with and within systems, lateral thinkers head for the creative world and diagonal thinkers tell us how wonderful they are.

All fine and dandy. Except occasionally I need to get literal for a few hours. Like when I’m doing my tax return, or I’m in a supermarket or sitting in a meeting with an anally retentive client.

I’ve also watched literal thinkers struggle to handle situations where they really need to just chuck their preconceptions in the bin. Handling little children, for instance, or getting a new piece of technology to work.

The diagonal thinkers never have a problem, of course, because they can “switch effortlessly” from one mode of thinking to another. Which may or may not explain all the puerile advertising we see on the box. Personally, I don’t have that ability and simply end up with rude letters from Her Majesty, all the wrong stuff in my trolly, or picturing my client with an axe buried in her head.

But I imagine that everyone’s brains are physically capable of thinking in any way, we just end up training our brains into one path or another over time (or having them forcibly retrained at school). So what we need is some way to “jolt” our brains from one mode to the other as the occasion demands. Nothing as invasive as an axe, hopefully, but probably a sort of hat with electrodes that stimulate different parts of the skull.

And preferably with the controls disguised so that my client can’t see me desperately stabbing the “ossified and constipated” setting five minutes into the meeting.