MoneyWeek issue 392 cover

Down and out

11 July 2008 / Issue 392

Why the pound is the world’s worst currency... PLUS:

• Why the global bear market has only just begun

• Takeover targets? Four Aim stocks to buy now

• The preacher who worships private jets


Flee into cash and gold

First a defence of poor Gordon Brown. Clearly, while on his way to one of the G8’s famously over-the-top banquets, it was unwise of him to suggest that the rest of us eat more leftovers. But by Wednesday he was being mocked again, this time for apparently not noticing that he had had a 19-course dinner. “It seemed to me to be three courses,” he told the press. “I don’t know quite why it’s been described as larger.”

Now we all know by now that Brown isn’t very good at counting, but I think on this occasion he was probably right. Japanese menus often list scores of dishes but each one is tiny – just a taste – and in this kind of meal they tend to arrive in groups rather than one by one. Brown can say little right these days, but I think that even he, despite having no formal training in economics, econometrics, statistics or, indeed, mathematics, can tell the difference between three and 19.

Right, on to his failings. The most obvious is surely complacency. He must at some point have believed his own rhetoric – must have believed that he had somehow abolished boom and bust, along with inflation and (any day now) child poverty. Otherwise, there is no way he would have left our currency so vulnerable and our public finances in such a state that he has no immediate way to ease our path into and out of recession. And make no mistake, we are headed into recession. The official numbers don’t show it yet, but we don’t really need the official numbers to tell us things are bad.

• Read the full editor’s letter here: Flee into cash and gold