In our last paper, we suggested a few fairly opportunistic trades, including a long gold/short silver idea which worked out nicely indeed – alas, between the start of the drafting, and the time we finally managed to release the report, the price of silver tanked by about 35% meaning that it was a little late to position – and the expression “about as useful as the teats on a bull” comes to mind!
We hurry to issue because – in addition to our usual positioning – there are now some potentially lucrative opportunities in the crisis economies of the West: About a month ago, having followed it for almost a year awaiting a good entry level, we turned bullish on Greek debt, and we are here reiterating that view, assuming that the Northern Europeans simply cannot afford to allow a true debt crisis in the Eurozone.
The potential weak point in our logic is the dysfunctional Greek political system; one simply cannot rescue a drowning man who is intent upon drowning. Our working assumption is that cooler heads will prevail.
As of this writing, T&B finds ourselves in one of the bicycle-republics of Northern Europe – Stockholm to be exact. Like Singapore, Sweden is one of those irritatingly happy countries. Wealthy, secure, predictable – compared with the last time we drifted through seven years ago, Stockholm appears to have enjoyed something of a renaissance – the upmarket restaurants and hotels are booked solid, the shops have been upgraded, the currency is continuing to appreciate, unemployment is low, and there are none of the visible signs of the sort of social marginalization (people sleeping in doorways, an atmosphere of insecurity) that we encounter further south.
What is most extraordinary is that, according to the currently dominant economic ideology – the Neoliberal Dogma – the Swedish success story should never have happened. Taxes are outrageous, regulation is all-pervasive, equality is the watchword, with conspicuous consumption frowned upon. Security is truly cradle-to-grave, and bankers iron their own shirts. The incentives are all wrong – free market mechanisms are gamed, enterprise should be strangled by taxation… but, against all expectations, there can be no arguing with the fact that objectively it does in fact work. Indeed, Denmark which has considerably lower taxes and less regulation is currently mired in recession – while Sweden is growing strongly.
The key is obviously one of sociology. An economic system which would be catastrophic in the more anarchic and individualistic Southern European countries works impressively well in the context of a Lutheran social-ethic, great social homogeneity and the high degree of socialization with a widespread sense of ownership deeply rooted in Swedish society. A seventy-year history of socialism and democracy has ironed out all the wrinkles – people willingly pay taxes, seek to live precisely as well as their neighbours, and show a good-humoured tolerance for regulations and tax burdens which would be considered unacceptably onerous anywhere else. Tax evasion is NOT a national sport. Swedish workers are highly productive and responsible because of their sense of being stakeholders. Would that Russia could be just a trifle more like Sweden – not, please dear God, politically correct, de-sexed, or boringly egalitarian, but just a bit more civic-minded, law-abiding, and cooperative…
It may happen, but not this week – and we miss the Russian surrealism already. There is one strategist we know keenly looking forward to the Aeroflot flight back to the ambient madness which is Moscow!
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