Tag Archives: Henry VIII

A Country Ghost, the Devil’s Chair and Other Stories

Economics, scepticism, , , , , , ,

What has been lost from the countryside is the art of spinning a yarn or the telling of tall tales. I grew up in a time prior to the modern media age and the entertainment we valued most was story telling. We children loved it when my father had a friend call who was an adept story teller. Although there was some truth in these stories they were considerably embellished through constant repetition and could contain fantastical elements. Country folk used to love story telling, particularly when the audience included some credulous outsiders.

This credulity could be exploited for profit. A friend of my father’s was a farmer. He had been contacted by a television company who wished to film on his lands some scenes for a television programme on Jorrocks, the nineteenth century huntsman. When they had set up the jumps for the horsemen, they were interrupted by a shout of that’s all wrong after the first jump. This very helpful farmer told the producer and assembled cast that Jorrocks would never jump in the manner they had done. After several jumps with the guidance of the helpful farmer they began to jump in the manner of the Victorian huntsman. Once they had achieved that, the very helpful farmer noticed that the costumes and tackle they were not those that would be used in the nineteenth century. He gave them his help in securing the correct tackle for the horses and the right costumes for the huntsmen. What had intended to be one days shooting, became for the farmer a profitable three days of filming. What the television producer never realised was that this farmer knew less about the historical Jorrocks that they did.

After this diversion I want to get back to my intended story, that of country ghosts. The estate on which I lived was owned by a very wealthy American family, who had become British over the generations. When the first American owner bought the estate, he invested part of his wealth in improving the estate. He added a maze to the grounds, topiary chessman and an Italian garden. The grounds around the castle were turned into a pleasure garden. One such added feature were the walks and one such walk was Anne Boleyn’s walk.

The castle had once been owned by Anne Boleyn’s father. It was doubtful that she had spent anytime there with her lover Henry VIII; yet the thought that she might have appealed to the new owner. The walk was a long walk between rhododendrons and other scrubs. In early summer it must have been a delightful to walk between the flowering shrubs. When I knew the walk it had largely fallen into disuse and looked rather neglected. It had a markedly gloomy and spooky appearance which is perhaps it was why it gave rise to a local ghost story.

Stories circulated amongst the castle staff that the unfortunate Anne Boleyn could be seen at night walking there with her head in her hand. The fact that the castle staff at night attended the pub situated at the edge of the castle grounds, I think aided the development of the stories about this ghostly apparition. According to local legend an Italian valet was employed at the castle. This man was easily persuaded of the existence of this ghost. One night he was persuaded to walk along Anne Boleyn’s walk to see the ghost. Another of the servants had dressed in a sheet to look like a ghost. I don’t know what he used for a head, but he certainly had one under his arm. Then when the valet was walking along this path, this ghost jumped out from between the bushes. The scared valet ran away and gave his notice the next day.

I say local legend because staff would play such tricks on one another, but I doubt that even the most naive of Italian valets would be fooled by the disguise. What made the story believable was that it was a trick played on an incredulous outsider. Everybody in the village knew that only an outsider would be taken in by such a trick. However from such beer talk the legend grew. Certainly when I was a child the story of Anne Boleyn walking the grounds was widely known and of course disbelieved. It became something of a local custom, that some locals when fortified fortified by the consumption of beer would do the walk to see if they could see the ghost. Only after a number of these beers would these people think it worth their time to look for what they really knew was a non existent ghost when they were sober. All the estate was sceptical about Anne Boleyn’s ghost, but it was an amusing story to relate to credulous visitors.

Now the myth of Anne Boleyn walking the estate is widely accepted. I suspect mainly to encourage visitors to come to the estate. Since my childhood the walk has been transformed and now looks like it did in its heyday. Yet many thousands have now walked along that path to share in the vicarious pleasure of walking the same path as Anne Boleyn’s ghost.

There was also the story of the devil’s chair. At a nearby village there was a chair in which the devil had been reputed to have sat. Any unfortunate that sat in the chair would be certain to die the next day. Whatever the source of the story it was one popular with locals. However I can express some credulity about the story, as after a few drinks the locals would forget which was the devil’s chair and somebody would mistakenly sit in it. None of them can I recall ever died from doing so. After a nights drinking nobody was quite sure which of the chairs the devil sat in and I’m sure the devils chair was a different one each night. If fact I know that none of the local adults took the story seriously. However it was a story the landlord promoted to encourage trade.

What I think was the true source of the story was this. A landlord wanted to devise a way to stop children coming into the pub, because he only wanted adult drinkers in the bar, as children distracted the men from the serious and profitable activity of drinking. He came up with the story of the devil’s chair to scare away the children. It certainly worked because all of us children were too scared to enter the pub. From that simple ruse it developed into what became a well known local legend.

As a former countryman proud of his roots, I prefer to believe all such rural ghost stories had a practical origin. If outsiders from the town took them seriously, so much the better. Much pleasure was derived from duping our sophisticated urban cousins. The man who appeared to be an ignorant country yokel was all to often one of the village wide boys testing the credulity of an outsider with an increasingly series of incredible stories.

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London’s dire housing situation, are the banks also to blame for this?

economic history, Economics, Politics, society, , , , , , , ,

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Reading a blog by Holly and Rhiannon on the New Statesman’s website prompted this post. In their blog they described the appalling conditions in which many young people live in London. Conditions reminiscent of those prevailing in the poorest parts of Victorian London. While the obvious villains are the new breed of landlord exploiting a dysfunctional housing market, these people are merely the catspaw in a highly dysfunctional inegalitarian society. Who are the real villains. One group are the third of MP’s who are buy-to-let landlords, who put their chance to earn a profit above the needs of the poorly housed young. What really is happening is a structural change in the economy that disadvantages the young and the poor, who are often the same. There is at the heart of this change a familiar villain the bankers and the City of London.

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How the bankers can in large part be blamed for the poor living conditions of the young in private rental accommodation can be explained by the structural change in the British economy engineered by the banking community. This explanation starts with how a business makes a profit. There are two ways either that business develops and new product or service that people want or it acquires the right to sell an existing service or product and is able to increase the price at which it sells the product or service by exploiting the market. Apple with their successful IPhone would be an example of the first and Centrica and the other energy companies that make up the dominant cartel of energy companies would be the other. Bankers in part have made their money in part through the second route. The banking market is dominated by the big four who can exploit the market for money handling services by collaborating informally. Credit card charges are exorbitantly high and yet no bank undercuts the others by offering a low interest rate credit card. Any deals offered are merely incentives to change card companies. The £80 billion of bonus payments to be paid to the bankers this year is merely another example of increasing the charges for money transaction services made by the banks, its the exploitation of a captive market.

However there is a way of profit making unique to the banks. To understand this other way it is necessary to go back to Tudor times and Henry VIII. Henry was constantly overspending building and furnishing palaces fit for a Renaissance Prince. There were also the almost constant wars against France and the need to build a modern navy to defend the UK against aggressors. When faced with the inability to pay his bills Henry resorted to debasing the currency, that is reducing the quantity of precious metals in the currency. This enabled him to produce many more coins with his limited stock of gold and silver. The losers in this situation were Henry’s creditors who received payment in the new debased currency. The pound in their pocket was now worth much less. Debasing the currency was a common practice for insolvent monarchs who wished to reduce their debts to manageable proportions. Unfortunately this new debased coinage had the effect of impoverishing the less well off as it was inflationary and increased food prices. When the less well off were the majority it had a very negative impact on national well being. Contemporary bankers like Henry VIII have similarly debased the pound sterling to benefit themselves at the expense of the rest of the nation.

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What is little understood is that in contemporary Britain it is the banks that are responsible for the supply of money in the form of bank deposits. Only 2% of money in circulation is notes and coins. It is banks through the process of credit creation that create most of the money in circulation. Realising the significance of this power governments in the Social Democratic era, but since 1971 all limits on the power of banks to create money have been removed by successive governments. The only limit of the amount of money the bank create is what the bank decides its reasonable to create. Perhaps leaving the bankers to decide how much money to create is not the best of economic policies. When Lehman Brothers collapsed it shocked many observers to discover that the banks deposits (bank money) was 50 times greater than its reserves. Later it was discovered that this was general practice and in fact many banks exceeded that ratio.
EU regulations require that banks equity total 1.5% by value of a banks deposits, which means European Banks are entitled to create bank money (deposits) that are 66 times the size of their reserves. The UK banks are marginally sounder as the ratio for them is 1:50. However their opposition to this limit and pleas for delay in its implementation suggest that even that ratio is exceeded in practice by our banks.

The power to issue money gives the banks incredible power. In 2010 the UK’s GDP(National Income) was £1.46 trillion, while bank deposits I estimate as totalling £7.3 trillion. Anybody glancing at these figures will realise that it gives the banks the power to dictate the direction of the economy. It is a power the banks don’t hesitate to use, most notably in 2009/10 when they succeeding in persuading (!) the government to save the banks by adopting a policy of national austerity.

This control of the nation’s money supply gives the banks the ability to direct the nation’s spending policies. If these excessive bank funds had been directed into developing the nation’s infra structure or long term industrial development their effects would have been less pernicious. It is no coincidence that this period of exponential growth in bank money was the period in which the number of new build homes declined catastrophically. To build a new housing estate meant money would be tied up for a long time in a construction project, which was unattractive when quick returns where available in other sectors in the housing industry. With a febrile housing market money lent on mortgages offered a quick return as there was always a large turnover in housing stock. Money was always being repaid from the sale of houses by customers wanting to move up in the housing market. Not only that but mortgage loans could be bundled up and be sold on as as part of a Collaterized Debt Obligation to other banks providing yet another source of ready cash.

The superior purchasing power of the banks enabled them to redirect activity in the housing market away from new build houses to the sale and resale of ‘second hand’ houses. There was a collapse in effective demand for new build houses, as all the money was going elsewhere to more profitable forms of speculation. Simultaneously the rise in prices of traded houses pushed up the prices of starter homes, reducing the purchasing power of the incomes of the first time buyer. Now the average house price is 5 times the average income, whereas most of recent history it was 3 times. Banks had effectively debased the domestic currency by reducing its purchasing power in terms of what really mattered, securing a home.

This change was effectively masked by a decline in interest rates, which reduced the cost of mortgages. In an economy in which people increased derived an income from property speculation it did not seem to matter.

Speculation in the various financial markets further increased the incomes of bankers and traders in the City of London. Bonuses of £1 million were becoming common place for traders in the City of London. It comes as no surprise to discover that this year England has become the largest market for Ferrari. What must be understood that the vast profits derived from this trading was money profits not real profits. It did not add to national wealth so much as become a charge on national wealth. Given that the bankers etc. now had control of a disproportionate share of the nation’s money they could outbid the rest of the population for the most desirable goods and services. Chelsea and Knightsbridge became the home of bankers, poorer residents were pushed out into other areas. Even less expensive areas in London such as Islington have become no go areas for professionals other than those who work in the financial trades.

Inflation figures whether shown in the Consumer Price Index or the Retail Price Index fail to show the extent of the true devaluation of the domestic currency. Since housing is one of the most significant items purchased in an individual’s lifetime it should be shown in a separate index and that would indicate the true decline in the value of the domestic currency. Giving bankers control of the money supply has resulted in them debasing the domestic currency as effectively as Henry VIII. Instead of reducing the value of the content of the currency, they reduce the value of the currency by increasing its supply of money, making each domestic pound worth less. Further by gaining a stranglehold over government economic policy they have been able to limit the incomes (money held) by the majority through persuading the government to adopt supply side economics and domestic austerity, which have kept incomes for the majority in real terms at 2003 levels, which means the bankers and the super rich can through their spending increasingly determine what is produced in the UK. The shrunken purchasing power of the majority means they have less say over what is produced, therefore less affordable housing.

UK government through surrendering control of the money supply to the banks have been able to remake the economy so that increasingly not just bankers but increasingly large parts of the population to look too making income through speculative activities, rather from gainful employment. It is a population with little optimism for the future that is attracted to the gambling websites, as they see it as the only chance of making money. A speculative economy in which the financial elite make fortunes through speculation in currency, commodities and equities is an unfair society as most are denied that opportunity. One such speculative activity is the buy-to-let property market in London, with prices increasing at a rate of 11% a year, the buyer cannot fail to make money. Since all too often its a short term speculative investment there is no desire to make the purchased property habitable.

Bankers I believe share a disproportionate part of the blame for the housing crises in the UK. Only by taking control of the money supply away from the banks can a fair and equitable society be created. There are lots of policies that could achieve this, one of the best is increasing the banks to hold a larger ratio of share equity (reserves) to bank deposits. A gradual increase of the amount of equity to deposit ratio to 1:10 would end many of the evils of the current system.