William Shepherd

Half of a new billion dollar hedge fund from Kohlberg Kravis Roberts will be spent betting on ‘market dislocations’. The rest will be pumped into ‘stressed’ and ‘distressed’ debt. It was comforting to know that KKR expect two thirds of the fund to be gambling on disasters on the other side of the pond. But don’t get any ideas. The minimum stake is a cool five million dollars…and you have to give six months notice before pulling out…twice the hedge fund norm.

These hedge funds are the shock troopers of the Anglo-American New World Order. They are unleashed whenever some recalcitrant country needs to be taught a lesson. It’s good old-fashioned mafiosa stuff. Geopolitics and The Great Game are every bit as simple as Sir Halford Mackinder portrayed them a century ago…which is why Soviet strategists read Mackinder. The destruction of the East Asia Tiger Economies is a good example of how it’s done.

At the Asia Pacific Economic Cooperation (APEC) Summit in 1993 American officials began to demand that East Asian economies open up their controlled financial markets to free capital flows…in the interest of ‘level playing fields’. Previously the debt-free economies of East Asia had avoided reliance on IMF loans or foreign capital, other than direct investment in manufacturing plants, usually as part of a long-term national goal. Now they were told to open their markets to foreign capital flows and short-term foreign lending.

Once capital controls were eased and foreign investment allowed to flow freely in and out, South Korea and the other Tiger Economies were awash with a sudden flood of foreign dollars. The result between 1994 and the onset of the attack on the Thai baht in May 1997 was the creation of speculative bubbles in luxury real estate, local stock values and other assets. Once the East Asian Tiger Economies had begun to open up to foreign capital…but well before they had adequate controls in place over possible abuse…hedge funds went on the attack.

The first target was the weakest economy Thailand. George Soros, armed with a credit line from a group of international banks including Citigroup gambled that Thailand would devalue the baht and break from its peg to the dollar. By June the baht was floating and Thailand was in the arms of the IMF…the rottweilers sent in after the hedge funds have softened up their victim. In swift succession the hedge funds and banks hit the Philippines, Indonesia and then South Korea. They pocketed billions as the populations sank into economic chaos.

An early adopter of this approach was Margaret Thatcher. One month after the Tory Government was elected in May 1979 her Chancellor of the Exchequer Geoffrey Howe started to raise interest rates from 12% to 17% in twelve weeks while the Bank of England cut the money supply and removed the Callaghan Labour Party’s exchange controls. I had sold my house in Hertfordshire and was preparing to buy a house in Cambridge Massachusetts at the time. Overnight the complex paperwork procedures lovingly devised over several years become superfluous. Suddenly no forms were needed. None at all. There was a look of complete disbelief around the bank as it began to sink in. Years of paper shuffling had been a complete and utter waste of time.

Many years later the Thatcher/Howe Cut ‘n Squeeze approach was adopted by the IMF around the world. In England the only winners were The City of London and the oil companies. For everyone else it was mayhem. Unemployment doubled to 3 million within 18 months. Instead of capital being invested in rebuilding Britain’s rotten industrial base funds flowed out in speculation on real estate in Hong Kong and lucrative (ludicrous?) loans to Latin America.

I spent most of the day at PC-Hut working on the English text for the NCAB website and getting the Russian, Spanish, Finnish, Danish and Norwegian translators ready for a five-day delivery when they receive the English text next week. In the midst of it all the glad tidings came through from John Papworth that Edward Goldsmith had agreed to setting up the Edward Goldsmith Institute. I reminded John of the text I had created for the institute when writing copy for the Resurgence Group of Institutes. It went like this.

The political battle between locality and interests transcends any difference between the developed and undeveloped world. Indeed private affluence for the few and public squalor for the many is everywhere both a global and a local phenomenon. There are no adequate theories of locality...the wealth of villagers...and few if any sustainable examples of good town or country living for the whole community…just isolated examples of individual sane humane ecological survival in the midst of a hyper-expansionist madhouse. Without viable alternatives outside interests ride roughshod over local people. The initial aim of the Edward Goldsmith Institute is to design theoretical and practical examples for future urban and rural villages and to persuade local communities to bypass governments and authorities in setting up their own local initiatives based on the working principles developed by the institute.

Here is my Cancer horrorscope (June 23-July 22). You are sympathetic and understanding to other's problems, which makes you a sucker. You are always putting things off. That is why you will always be on welfare and won't be worth crap. Everyone in prison is a Cancer.

As a townie I know nothing about rats, foxes and chickens. So it was quite an eye-opener for me at the weekend when John Papworth told me that he had lost three of his chickens to foxes...including the pride of the roost - his new cockerel. ‘What do you do?’ I asked Natalia when we were over at Purton House collecting Tempe and some free range eggs. ‘We lock them in at night.’ Apparently John didn’t...but does now. He can see the foxes in the field on the other side of the garden wall. Country folks tell me that foxes are unusual because they don’t kill chickens for food but for pleasure.

Foxes and chickens I knew something about. But rats and chickens were another matter. John’s dog Tempe was away all Saturday and I asked John why. ‘She’s out ratting!’ ‘Ratting? What’s that?’ I wished I hadn’t asked. Natalia filled me in on the gory details. Every week or so Purton House requisitions a tractor to move one of the hen-coops...they are on wheels. Out from underneath swarm hundreds of rats. They set a pack of rat-catching dogs on them...this is ratting. Tempe was being inaugurated into the canine joys of killing rats...for pleasure. Between them the pack finished off 120 rats on that particular Saturday. Tempe slept all day Sunday. In my naivety I wondered whether it mattered if rats ate some chicken feed. ‘No, of course not,’ Natalie replied. ‘The trouble is that they eat the eggs!’

My Nationwide card has developed a crack. Rather than be confronted at a crucial moment with a card that would not withdraw money from the wall I went into my local branch to have it replaced. A two-minute job? Nothing is simple anymore. Half an hour later the order for my new card finally reached card-making headquarters…probably in Bangalore. The problem? Once again it was my address. The Nationwide database refused to accept my PO Box as a good enough address. Delivering the card to the branch was not a problem. My address was not on their postcode database so I could not get a new card. Jennie was nothing if not persistent however. At last she found that by giving the post office an address she could hack her way into the system. My monthly statements will now no longer come out as P.O. Box 36, Rye TN31 7WP but will be P.O. Box 36, Rye Post Office, Cinque Ports Street, Rye TN31 7AA. Of course if I was laundering money I would have a normal street address.

Jo Kirkham is giving a talk at the Rye Museum next Tuesday evening entitled The Huguenots in Rye. Jo is a big fan of Connie’s illustrations and in particular the pen and ink pictures in Rye From the Water’s Edge so I put together a CD with the complete series of seventy five pictures so she could make her slides more interesting. The two pictures Jo had particularly asked for were The London Trader showing Rye’s Strand Gate on the occasion of Daniel Defoe’s visit to Rye in 1724 and The Escape showing Camber Castle in Shakespeare’s times.

One of several tragic aspects of Connie’s sudden death is that many of the projects we were working on together are now unlikely to come to fruition. On the two Rye books for instance…Rye From the Water’s Edge and The Maritime History of Rye…we had planned a series of Rye Tales set in the ancient town through the ages. To enable Connie to draw these tales and place the characters and plots into their proper historic settings we had worked together developing outline plots and inventing our cast of characters. As a result Connie’s illustrations give the impression of being illustrations from real stories. This is a big part of their charm…this and the fact that Connie was a stickler for detail and very thorough about her historical research. The working titles of these five Rye Tales were Chaucer’s Times, Shakespeare’s Times, Defoe’s Times, Henry James’ Times and Modern Times.

I managed to write two weblogs today…between other work…and in the evening finished reading Enigma by Robert Harris. Also a set of horoscopes dropped into my e-mail today. I will lower the tone of these weblogs by quoting them over the next few days. But be warned. I labelled them horrorscopes and questioned whether they may start a new trend of reality horoscopes in our daily newspapers…desperately trying anything to stop their plummeting circulation. Here is Aquarius (Jan 23 - Feb 22), for instance: ‘You have an inventive mind and are inclined to be progressive. You lie a great deal. You make the same mistakes repeatedly because you are stupid. Everyone thinks you are a jerk.’

Anyway these horroscopes amused me so I wasted ten minutes formatting them properly and sending them on their way around cyberspace. ‘These will be all over Sweden within a week,’ I remarked to Tony Payne at P-Hut where I was working at the time. Perhaps I should have said ‘The States’ because the next day an e-mail came back from Susan May in Jackson, New Hampshire.

Susan’s daughter Kristin…a close friend to my daughter during their time at Cambridge Friends School…works in a thrift shop and had come across a little book entitled Sex After 50. Susan had remarked quick as a flash: ‘It's a blank book, isn't it!’ Her e-mail continued: ‘My horrorscope for Gemini (May 23 - June 22) went like this: ‘You are a quick and intelligent thinker. People like you because you are bisexual. You are inclined to expect too much for too little. This means you are a cheap bastard. Geminis are notorious for thriving on sex.’