THE FRENCH HAVE A NEW ONE, THE RUSSIANS HAVE AN OLD ONE AND THE GREEKS HAVEN’T GOT ONE AT ALL
I appreciate that this could apply to many things such as economic policies, fashion sense or even kettles for all I know. However, my brain was heading towards those trying to find some effective leadership. Maybe the changes of last weekend might just be the catalyst for change that we have been waiting for to finally get things moving in Euroland and to try and break this seemingly intractable euro impasse. A combination of some Hollandaise on a tossed Greek salad may actually herald, not necessarily a wholesale change in policy but rather one of a change of emphasis.
Although the „austerity pact‟ may be sacrosanct to the German Chancellor, there is no reason why an encouraging growth ingredient cannot be added to the mix. This if not a perfect economic recipe for recovery, would be politically astute and reflect a level of empathy with popular frustrations. It would be seen, at least, to be providing some confidence in future growth rather than be the bleak picture laid out by some - many including our own dear leaders.
So with Greece continuing to be a mess and with a Euro exit (subset or suspension) or even a coup at the extreme, looking like possible options, France becomes the more important issue. If a „growth‟ policy can be allied to the current austerity agreement and potentially create the necessary confidence for central bond purchases, then a route for stabilisation and eventual recovery appears on the horizon. Perhaps action via such bodies as the European Investment Bank could provide the basis of a growth plan, whilst still ensuring that the disciplines of the austerity package are maintained. Now maybe there is a shaft of light – albeit I grant you a thin one.
Another positive sign has come from the Bundesbank, who have a deserved reputation of being one of the most cautious central banks, that they may be willing to accept a higher level of inflation. This may seem wholly normal to the British where we positively revel in reasonable inflation, but for the Germans, fear of inflation is deep in the national psyche as a result of the 1920‟s period of financial decimation caused by hyperinflation. Their view now though seems to be that limited inflation as part of the economic rebalancing within the Eurozone could help the most indebted nations.
This however, is not going to allow any huge change, as for many German workers, it is they who have been improving their productivity with controlled wages, whereas other nations‟ workers have been profligate in the boom times and wasted their great opportunity of lower interest rates by paying themselves out of all proportion to their effectiveness.
Additionally, Mrs Merkel will be watching the local polls in North Rhine Westphalia where 13 million voters go to the polls. Although these are not national, it is the most populous state and is being seen by many as a proxy general election, preparing the way for the real thing in 2013.
After their sound spanking at the polls (maybe a familiar term for the posh boys .......), the UK coalition leadershave to learn some humility and encourage an air of positive leadership over negative backward-looking blame. I am finding organisations desperately keen to do new business both here and overseas, but it becomes even more difficult when the air is not filled with much in the way of constructive confidence rather than uninspiring gloom. Again so much of this seems to emanate from the fact that so few of these leaders (in any leading political party) seem to have had any practical experience, but rather have obtained their business knowledge from textbook examples and healthy debates in the student union.
Sadly, the Queen‟s speech was another missed opportunity in which even she sounded somewhat disenchanted in tone but to be fair, that probably was the aftermath of a throat infection. In an unofficial poll around me after the speech, I asked if anyone could remember any particularly exciting and dynamic idea which might inspire the enthusiasm and attention of the nation. Answer came there none. Oh dear!
And finally...after what must have a thin news day last weekend, interviewers were reduced to speaking to people about dinosaur flatulence and its impact on global warming. There comes yet more natural waste news although this has at least a slightly more up to date relevance. Reuters reports that China's love of pork presents a mountain of a problem for the environment, 1.5 million tons of pig poo a year to be precise, but an Australian company believes it has part of the answer. Why not turn the pig poo into power?
Using a bioreactor called „PooCareTM‟ and other technology, the pig manure is converted into biofuel for cooking and heating, while the residue goes to farmers as nutrient-rich fertilizers.
"The benefits are energy and fuel for farmers as well as preventing further contamination of the environment," said Ravi Naidu, Chief Scientist at CRC for Contamination Assessment and Remediation of the Environment (CRC Care), a south Australian-based firm involved in drawing up the technology.
The process converts solid waste into a biogas that is then pumped through gas tanks that can be delivered to the local community. The entire process takes about a month, with the first biogenerator already running at a farm in Wuhan, central China.
China has an estimated 700 million pigs producing some two-thirds of the meat consumed there annually, so the scale of the problem can't be underestimated.
Only one tenth of pig waste is now used as manure. It is estimated the nutrients lost in the waste of one pig alone are worth about A$50 ($52) per year. There is a vast disparity in rural and urban incomes with farmers earning around $75 per month.
Porcine Power could certainly catch on. Would this mean we could end up with self-frying bacon – what a tantalising dream - what else do we need in life?
Have a good week.
Justin A. Urquhart Stewart Director Seven Investment Management www.7im.co.uk
P.S. I note that the term „under-pants bomber‟ seems to have been elevated to the description of „underwear bomber‟, thus can we presume it‟s not going to be long before we have the lingerie and designer label bomber?
“Carl Lagerfeld Darling – so snug - I wouldn‟t be seen dead without them.”
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