Trading Game - Part III (Last) - Why Gary Stevenson matters..

During the periods I was studying for my Bachelors' degree in Athens, it was extremely obvious that the monetary policy was wrong in too many ways. I attended the University of Athens for free, I got free books and the bus ticket was extremely cheap. I also couldn’t explain why this personal observation was not relevant to the average Greek student. That was part of their own normality.

As I was born and raised in Cyprus, I was familiar with a different world. We were closer to the English system, our companies were more interacting with England and our financial model looked more like England. That gave us some extra benefits, English style knowledge, more money-making opportunities. When I first visited London, back in 1995, the whole experience was like moving to a bigger capital of Cyprus. There was something extremely awkward. The prices were too cheap for me. That of course was part of a monetary miscalculation that was eventually explained during the bust of 2013/2013.

The model of Athens was different. The people had lower wages and less money to spend, in comparison to a Cypriot. Everything was extremely cheap for myself, in Athens, based on my own salary. And because of that reason, the streets of Athens were full of Cypriot visitors, shopping cheaper than in Cyprus. Soon, many Cypriot companies went bust. There was an increased cost they couldn’t afford..

It took me a couple of years to do the math in detail. The Greek government was indirectly supporting the Greek citizen, for many years, in order to make life look affordable. This observation is identical with what the situation is in the UK. The governments make living affordable, through loans that the people will have to repay later.

Both Athens and London were also contributing to the European budget. That means that both countries sent money to Brussels, in order to support the EU mechanism. Salaries, projects, expenses. That is not necessarily bad, but in addition it’s not necessarily good.

If projects work, there is a benefit for the average citizen of the EU. If projects are implemented for laundering purposes, the bill will be revealed sooner or later.

By 2013 I was able to monitor and keep records on how the EU design was laundering funds for the oligarchs of the member countries. In the exact same pattern that the UK did during COVID. By 2015 it was too late for the people of Greece to prevent what was really happening.The country collapsed. Too identical to the existing trend in the UK.

By 2015 the situation was also really bad and extremely obvious for the UK residents.

People paid a bill that went to a black hole. This is an extremely simple explanation for the BREXIT results. Whoever paid and couldn’t afford to continue paying the on-going scheme, had to put an end to it because they couldn’t afford the continuous, increased bill.

The exact same situation was too obvious after I permanently moved to England. I was not able to clearly understand the “why”, but I could notice that there was an indirect support to the businesses that caused increased instability. Main key point, the extremely low taxation for those who controlled the profits in comparison to extremely high taxation for the lower incomes.

When the Conservatives lost their seats and the Labour Party won the majority in the parliament it was too obvious that the damage to the economy was irreversible. The past governments (Conservative/LibDem) lowered the taxation to the business world and at the same time provided financial support to the general public in need through increased loans that we will have to pay in the future.  This combination of low taxation for the profit making industries in addition to an indirect but continuous support to the problematic financial model and the direct benefit would explode at some future time. IT happens at this time, as the late Hyman Minsky perfectly explained decades earlier.

This explosion occurred during Boris Johnson, Liz Truss and Rishi Sunak. That was the simple reason the Labour Party won that huge majority of seats. The problem was that the Starmer administration was not experienced enough or prepared enough to fix the long-term problems.

I have to be fair on that. My own studies and research allow me to understand and identify early enough. Too many of the politicians (applying to any country of course..) don’t really have any similar studies and experience to do the job. A perfect example is the United States. Trump keeps trying every possible methodology he thinks, in order to hide the increased instability. Yet, it still is not working..

Most of the current team administration and the previous of course (both in the UK, Cyprus and many other countries of course..) are there for the pay check and the benefits they forward to their own peers. They make it too obvious if we closely observe the OPEKEPE scandal in Greece.

So, just to reward Gary Stevenson, since my article started with Gary Stevenson in mind. He explains in amazing detail why the past administration failed and why the current administration still follows an expired methodology. Although Gary Stevenson is described as Leftish, I personally disagree. He is a good thinker that notices what goes wrong. I believe I do the exact same for my own clients..

I am not considering myself as a Leftish. I am not considering myself as a Rightish. I consider myself as a person that identifies early enough what the administration should do and I prepare myself and my clients for the bad scenarios, if and when they appear.

I was doing the exact same thing when I was working in Greece and also when I was working in Cyprus.

The forecasting is a service to prepare the mass of the population and the business world  for the periods the administration will fail to do the right things. 

This is the reason I decided to explain, on my own approach, why everybody should read “The Trading Game” and watch the “Gary’s economics” channel on YouTube.

Our job, as the normal people, the professionals, the business owners is to protect ourselves from the malfunctions of the administration. Every time they occur, every time they become too obvious.

Whoever wants to reach the extra mile on the topics, do please get in touch and message me for more details.

Nicos Rafidhias

https://www.linkedin.com/in/nicos-rafidhias/

The times real experts are needed

 As the UK is now copying the pattern that both Greece and Cyprus followed between 2006 and 2015, the lesson is the exact same ; you never put amateurs to do the job of professionals.

After thirty years in business, I find that the most valuable modules I ever studied were the Financial Instability Hypothesis and the Minsky Moment.

Funny detail ; those modules were studied because of my personal curiosity and my personal business activities.

Although most Universities tend to offer the typical modules of Political Science, Political Economy, Marketing, Management and Human Resources, the people that do that extra mile always get knowledge that makes the difference.

Today's CITY AM (post shared earlier) admits that the industry of education brings a dangerous combination of problems to the most recent graduates ; debt and unemployment. The industry sells a generic service that stopped providing any benefit.

During my Bachelor's studies in Political Science (around 20 years earlier), I was lucky to have a lecture by the UK Ambassador in Athens, Greece. The Ambassador described the UK business system as extremely stable, in comparison to the Greek system. Long term job positions, building careers in comparison to the short term job model of Greece.

Although the Ambassador was right on his observation and analysis, at that timeframe, around ten years later I found out that the UK unfortunately copied the model of Greece ; short term job positions, freezing the salary of the low income population and covering the gap through the Universal Credit pot while multiplying the salary of the politicians and the public administration, paid by continuous loans.

This long-term policy, followed not only by Truss but by several previous administrations including Thatcher, caused the Minsky Moment during Liz Truss 45 days in power. Since then, Truss repeatedly stated that she did nothing wrong, despite Kwasi Kwarteng's repeated statements, admitting the mistakes they made.

How Liz Truss caused a Minsky Moment ?

Liz Truss decided to give extra free money to peers from a country already facing collapse. All previous administrations provided free money to their peers ; Truss made that little extra effort.

Why did Rishi Sunak and Keir Starmer continue the same pattern ?

Both Sunak and Starmer are part of a huge circle of politicians with extremely limited knowledge on how to run a country or a union. They never had any courses on the field because if they had they could notice and correct the red flags. The majority of the politicians I met, all gave promises to their supporters including free money and benefits, like Boris Johnson did with Michelle Mone.

The Financial Instability Hypothesis and the Minsky Moment explains the day that you give everything and you now operate on increased loans and multiplied interest rates.

This is a phase where real experts are needed.

The Cyprus bankruptcy - The "before" and the "after" (part III)

 

In a similar situation, the British government faced a shocking devaluation of the Sterling pound during Liz Truss' administration, losing markets’ trust. What was the difference in that incident? Due to the danger of the Sterling pound to be plunged for good and for the long term and of course due to the danger of losing their seats due to the election that looked inevitable, they forced Liz Truss to resign.

The period of Liz Truss' administration brought to my mind the administration of Demetris Christofias in Cyprus, ten years earlier. As I assume, Liz Truss never heard of Demetris Christofias or ever paid attention to what happened to Cyprus ten years earlier. She just planned to increase the debt level of the United Kingdom that unfortunately for her had already reached the Ponzi levels, where nobody is willing to lend more. Liz Truss, even today claims that there was nothing wrong with her governance. Although, whoever has experience of Ponzi financing can easily understand and connect the practices of Christofias administration with what happened ten years later in the UK.

Those two financial crises prove the fatal mistakes of each private or public administration. Every administration claims to hire or appoint the best. Although, each administration hires or appoints based on friendly relationships or political benefits, translated as votes.. As a result, the administration is full of incompetent members or fraudsters that sooner or later create chaos. Cyprus is a perfect example. We all know that people in the public administration are appointed in exchange of votes and they cover fraud practices like money-laundering and in recent years the sale of passports to international criminals.

Mafia-State is a whistleblower evidence of what was happening during Anastasiades' administration. Anastasiades was repeatedly linked with international fraudsters and money-laundering practices that shaken the European community. Even worse, the whole European community infrastructure is designed in a pattern that one century ago led to the collapse of the “Latin Monetary Union” that today nobody dares to mention.

One hundred years ago, the European people had another monetary union that because of fraud, corruption and incompetence had to be left to collapse in silence.

As history repeats first, first as tragedy and second as farce, Greece was expelled from LMU from 1908 to 1910 and they faced the same pattern a century later. This time Cyprus was added to the story. When you spend all your (national) money, someone will have to loan you some more, in order to keep the (monetary union) illusion alive. But, just because a loan is always a loan, you are first out of the Union unofficially, but you are out a few years later, officially..

End of part III