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Today thousands of people are wasting their Saturday by marching through London to “make their voice heard”. The trouble is they all have different voices, and are all saying completely different and often contradictory things. At very best they’re impossible, at worst downright mad or dangerous!

Local radio headlines described it as a march for “jobs, justice and climate“; I thought it a mistake but this is I’m told the official theme. I’m glad that’s cleared up then, those three fit together so well, rather like a march for jobs, justice and the promotion of the Cornish language in the bus timetables of St Ives; or for jobs, pre-decimal currency and the return of The Crystal Maze. What have jobs, justice and climate got to do with each other?

It’s one of many problems at the G20 protest, as no two groups seem to have any coherent or thought through belief. The BBC has a brief guide. There’s Action Aid, The TUC, Save The Children, Stop Climate Chaos, Plan, Salvation Army, CND, WWF, British Muslim Initiative… And we get statements such as “make jobs not bombs” - as if we deliberately make “bombs” at the expense of jobs - and demands like “guarantee of job, home, future for everyone”, “make capitalism history” and “become patriots of the planet, not countries”.

It’s all so 1970s. I think they just dig out from the loft whatever old banner they could find from their student days and go; I’m still half expecting some Free Deirdre Rashid protestors myself.

Do protestors really know what they want?

They all want “someone” to do “something” that will “fix” everything, answering critics who ask how with that ridiculously naive “Yes we can” rubbish. “Yes we can” is not a policy, argument or defence. I think we have a period when too many people think “I have a problem, it’s the Government’s job to cope with it!”

Protest demands may be illogical

And why does everyone tack the environment onto their issues? Groups like the TUC - which spend their days promoting high polluting mass industry such as coal mining - suddenly add “green” as a prefix, or “and the environment” as a suffix, to everything. Make up your mind!

We have got to realise governments aren’t magic, they aren’t Superman and can’t “save the World”. They can’t guarantee a “job, home [and] future for everyone” and nor can they stop wars without the right circumstances for lasting peace and freedom. In the end “I have a problem, it’s the Government’s job to cope with it” isn’t sustainable; they are casting their problems on this mythical magic being - government - and who is government? There is no such thing! There are individual men and women and there are families and no government can do anything except through people. It is our duty to look after ourselves and then also to help look after our neighbour and life is a reciprocal business and people have got the entitlements too much in mind without the obligations, because there is no such thing as an entitlement unless someone has first met an obligation.

If they really want to make a difference, I’m guessing there’s plenty of charities who’d welcome and make good of someone’s service for a Saturday.

Not this man though…

The recent failure of the government to sell its gilts, thereby failing to borrow the amount it planned, has already started discussion on the possibility of a wider “guilt strike”. What if the government can’t fund its spending commitments?

As any failing business knows, no one wants to lend to a loss making firm with no realistic plans to stop losing money. This firm is UK Plc; Sterling has collapsed by 30%, there’s a 3.8% contraction predicted this year - the worst since comparable measures began in 1949 - and ourbudget deficit of 10% of GDP is higher than any other G20 country, indeed it’s 6th worst Worldwide (and they’ve mostly called the IMF). To add insult to injury the foolish bailouts and quasi-nationalisation of the banks means we are two large banks (near bankrupt ones) with a medium sized government attached, which isn’t an attractive punt.

The government has been buying up government bonds alongside investors with printed money for some time, so called “quantatitive easing”, but what if it needs more. Currently it plans to do £75bln of QEing, although the Governor has been saying he might not spend all the £75 billion, but the government deficit looks set to be over £150bln this year. What if they can’t raise the other ~£75bln? Will Brown throw caution to the wind and go nuclear, monetising the debt wholesale?

The only options besides this would be major tax hikes or major spending cuts, or a combination of both. To put £150bln into perspective, it’s roughly the combined cost of Health, Education and International Development. Total Government Expenditure is £557bln, so about 27%. Alternatively if you doubled Corporation Tax, Fuel Duties, Council Tax, Business Rates, Inheritance Tax, Stamp Duty and Tobacco Duty, without this tax hike affecting revenue (as it would) - you’d still be a £100m short! It’s just not possible.

So if the bond market doesn’t improve next month, what then?

The risk is the ever growing incentive for Brown allowing inflation to increase thus reducing the debt burden or the need to raise taxes or cut spending. With debt monetisation, government debt disappears and inflation takes its place. That £150bln seems a lot now, but not if a banana costs three million. While we complain at the high inflation and savers are ruined, the government escapes responsibility and the sort of cuts that caused the 1978 Winter of Discontent.

It’s not going to be nice.

Dan Hannan’s 3-minute assault on our “devalued Prime Minister of a devalued Government” has had 1,200,266 views as of 17:37.

I often feel that good economists make bad investors, and the reverse example of Keynes proves this. His economic policy caused disaster, but Keynes made a killing of 13% a year on average during the Depression investing for King’s College, Cambridge, whilst the stock market as a whole dropped lower each year. And thinking about it, if I was a great investor I’d probably not waste time writing economics books.

If only more shared my view, as I am really starting to get a headache - a Keynsian headache.

It’s all the fault of Polly Toynbee, who’s articles should never be read. Well actually it’s not just her fault, but her article triggered it.

She accuses David Cameron - and everyone who agrees with economic policies that work “with the grain of human instinct” and a “government liv[ing] within [its] means” - of being “economically illiterate”.

Far better to follow Keynesianism she says, a theory Keynes himself said is counter-intuitive. He wrote about the problem of the “thrift paradox” - if people try to increase their saving, there will be a decrease in spending, and supposedly a fall in employment and production.

Indeed if everyone saved everything and spent nothing this would indeed occur, as would starvation. But the problem is we need money available to borrow for new businesses and business expansion, overdrafts, mortgages etc; and for banks to lend out money, savers have to put it in.

The fundamentalist following of the “paradox of thrift” Keynesian dogma by daft governments lead saving to be discouraged (it’s taxed at 20%, pensions too are taxed), the savings rate dropping to near zero, and banks to become dependent on money borrowed short term from international investors (mainly the Chinese).

But that money was only ever a limited resource - there is only so much money - and only available whilst investors thought they were making a good investment. But the mortgage backed securities they bought were based on ever booming house prices, something bound to end sooner or later, as they knew many “sub-prime” borrowers were, well, sub-prime and libel to default.

When it appeared these mortgages were losing money, the investors stopped lending, called money back, and Northern Rock went bust. No one lends money to a business that’s losing money and has no realistic plan to stop losing money, which neatly explains why the government failed to borrow at yesterday’s bond auction.

So why can’t they realise we need savers?

But of course Mr Keynes isn’t just responsible for the crazy notion of saver hating. No, among other pearls of wisdom dished out by the supposedly “great” economist - why does he always get called “great” on TV? It’s a peer pressure thing if you ask me!- is the concept of borrowing your way out of debt. Got a huge credit card bill, struggling to repay your mortgage, in negative equity? What you need is more debt!

When challenged about the sanity of such a policy in the long run he famously answered: “In the long run we are all dead.” He should know all about that, he died in 1946, conveniently before the dire results of his crackpot theories fully reached their zenith in the 1970s.

It’s really time to return Mr Keynes to the crypt.

The news reported on ConservativeHome that Australian election strategist Lynton Crosby - dubbed “The Wizard of Oz” - has signed up to run the campaign of the newly formed Libertas is indeed strange. It strikes me there are three possible outcomes here: either (1) Crosby has made a big business mistake by annoying long term client in the Conservatives and will never work for them again; (2) Libertas has offered a huge sum of money so he doesn’t care if the Conservatives never call again; or (3) he has made a business masterstroke by breaking what seemed a Conservative monopoly over his services and will reap the rewards of a bidding war at every election from now on.

Meanwhile, what exactly is Libertas? It’s founder, Declan Ganley, ran the NO campaign against the Lisbon Treaty [EU Constitution] in Ireland, so it’s been branded Eurosceptic. The Independent even branded it “far right”. Have they even bothered to Google it? It’s the first real pan-European political party, uses the EU colour scheme, the EU’s symbols and flag, the EU’s “.eu” domain name suffix - but perhaps more tellingly states on its home page that “Libertas is a pan-European party dedicated to creating a new, democratic and open European Union…Libertas wants a strong and successful European Union. A Europe for and of the people…Libertas wants to change how Brussels works and give power back to the people in Europe.” It does not advocate returning power to free nation states.

Generally I am against the throwing of custard pies - and other gunge like substances - although the ennobling of Peter “Lord” Mandelson has made me think twice. But still I stand with my view, politicians - even those reptilian lizard like ones such as Mandelson who’s natural habitat is slime - should be able to go about in public free from the fear of imminent and unexpected gunging.

If we are going to allow the use of custard pies and other non-hazardous but easily sloppable matter in the political process, and many say it is a good means of anger management, the supporters of such activities should publish a clear and strict set of rules - a kind of Geneva Convention on Custard Pies - for all to follow. Here are my suggestions.

1. Custard Pies must always be non-hazardous.
2. Victims of pie throwing may counter attack.
3. Pies can only be thrown as a last resort when the democratic/legal process has failed and individuals are being over-ruled by the State (i.e. expropriation of property etc)
4. Pie contents and consistency should meet a European Directive regulatory framework on the harmonisation of custard pies, and must be inspected before launch by a specially appointed professional expert from the multi-million pound European Custard Pie Agency quango.

With rules like these, pie throwing would be a thing of the past.

However maybe Mandelson should be the exception to the rules…

A group sloppily labelled as ‘bosses’ by the BBC has called for the government to support the expansion of Heathrow Airport, involving as it does the compulsory purchase and demolition by the state of over 700 homes - including the entire village of Sipson - and the blighting of many thousands more.

The idea is wrong in so many ways.

Environmentally, we know it will produce a huge increase in pollution from both flights as well as road traffic. There is also the impact of noise over much of London, and the safety hazard of having such a busy flight path over such a crowded city.

Morally, it is undeniably wrong for the state to force people from their homes whether with or without compensation. Property rights are a core element of a free capitalist society, whereas state powers of expropriation are based in a rather different system of government. Airport owner BAA, via the state, have no right to force the sale of other people’s property. An Englishman’s home is his castle?

And infrastructure wise, expanding Heathrow is like Brunel deciding to widen the canals rather than build the Great Western Railway. Heathrow is a crowded site with limited scope for expansion and in the wrong place. The only long term option is the Thames Estuary Airport - aka Boris Island - which would have no constraints and an entirely sea based flight path.

Whatever way you look at it, Heathrow’s days are numbered. It’s time for Boris Island.

Way to go aliens!

The little not so green men obviously know they’re useless and unsightly, but how will they explain it to the insurance company?

Read more here.

Gordon Brown has announced plans to magic up 100,000 new jobs to help stem unemployment, in much the same way Paul Daniels might pull a rabbit from a hat - illusion.

According to The Times, Gordon Brown plans to;
“Pay firms to take on more apprentices than they need” - i.e. create some illusionary jobs.
“Pour taxpayers’ money into creating green industry to employ people” - i.e. create illusionary jobs at illusionary companies funded by real ones.
“Inject huge sums of infrastructure spending into the transport system” - i.e. build bridges and roads to nowhere.
And “Offer emergency loans on a case by case basis to car firms facing collapse” i.e. give a blank cheque to any car firm near a marginal seat.

The man is crazy. And he’s being crazy with our money.

The Pound is down to a record low against the Euro for the fifth day in a row. The Pound now buys just less than 1.12 Euros on the FX Markets, although most High Street currency exchangers are offering rates not far from parity. It is only a matter of time before the Pound is worth less than a Euro.

The weak Pound is bad news for consumers and businesses which use imported goods, contrary to what that previous Pound-devaluing disaster of a Labour PM Harold Wilson said, the Pound in our pockets really isn’t worth what it was. Going abroad is dearer, as are many products. Take the popular Nintendo WiiFit, which was around £70 in September and is now roughly £130. But then a Pound once bought over 200 Japanese Yen, 215 at its peak, but is now buying just 134 Yen. Exporters will do well - assuming they don’t need too many imported parts - but this too will push up domestic prices. Inflation could well soon be back on the agenda once the current deflationary pull of declining energy prices ends.

The weak Pound has lead some to talk about Euro membership. I say the opposite, thank goodness we aren’t in the Euro!

Currencies move for a reason, that reason being the changing economic strength of one country compared to another. Movements are a safety valve and the currencies find their own true equilibrium balance as changing economic conditions affect different countries differently. We are being affected hardest by the recession so our currency falls, cushioning the crash by boosting exports and reducing imports - thereby saving jobs! If we couldn’t revalue the Pound, the economic changes would be all the harder. Conversely during a boom the currency strengthens, boosting imports that help contain inflation. We can also set interest rates to suit us, rather than a European average that is in fact like nobody (remember the average family has 2.2 children, unlike any family I know, and European averages are the same)!

Setting an exchange rate in concrete forever, like with joining the Euro, removes all of that flexibility. It’s madness, plain and simple.