Our friend and Advisory Board member Ben Davies of Hinde Capital has produced a two-part report entitled Eyes Wide Shut covering the state of the UK’s financial health.
Nations sustain prosperity by encouraging an openness of society, willingness to permit creative destruction and democratic rule of law. It is the relationship between man-made economic and political institutions that fosters these aspects of the nation. Those that promote real growth through productivity enhancement and encourage progressive innovation will thrive; those that move towards repressive institutions of the State will stagnate and fail.
Unfortunately this is where the UK is heading today. Mounting debt that has merely boosted government consumption and transfer payments have undermined the overall productivity growth and led to economic stagnation and loss of economic freedom. Unfortunately, we believe that a nation will tend to bankrupt its citizens before it bankrupts itself; especially under a fiat currency system when it has the temptation to fund a welfare state through continued deficit financing.
Both reports are well worth reading:
Finally, you can find Ben’s thoughts on the PIIGS and the potential remonetisation of gold here.