Regulation again - Peter Valentine

As you will remember I have for a long time thought that the recovery from the financial crises would be influenced by the regulation of the "markets" and that the parts of those markets that only make sense in the tortured minds of the Bankers should be abolished. I have also long term believed that our position in the UK is worse that we have been told and felt that a National Government was needed to avoid the cures being tainted by political point scoring.
 
So how are we doing this Monday morning? It would seem that the battle is between the speculators and the various World governments. The Americans look to be winning their regulation battle, but London is too quiet and probably fearful, whilst Mrs Merkel showed willing to go it alone on the ghastly side markets in naked short selling. However, I am unimpressed by the leadership and common action within the EU. So on balance you have to believe that the speculators are winning and determined to prove it by bringing down a country or currency. Mind you on the plus side the exchange rate between the US Dollar and the Euro has reached a more sensible level and that should help EU exports. This weeks movements in the USD the € and the £ will be very interesting.
 
Just as a reminder the UK position is very similar to Greece except that we have much longer to roll over our immense international borrowing. But sterling declined last Friday back to €1.15, we are a repeat offender at
devaluing our way out of debt, and inflation reached 3.17% as we run out of special factors to explain that!
 
So what do we need NOW? At the EU level we must establish a unified set of regulations and use the power of the Common Market to rein in the speculators. That may very well mean we need much greater political unity than envisaged in the Lisbon Treaty, so be it, the other 26 existing EU states or at least the 16 Eurozone members should be prepared to implement such a scheme and if the English wish to veto then the UK must be asked to leave the EU and become another Norway. California is technically bankrupt in the USA as was New York City some years ago. But their currency is controlled at Federal level - ours must be too! And we must establish a Finance Minister for the EU and convert the ECB into the EU Federal Reserve.
 
As for the UK we must take the harsh measures necessary to payback the loans we used to boost government spending and create bubbles of false wealth. But somehow we must NOT appease the speculators by going soft on regulation. If we had joined the Euro and followed the rules it would have been much easier now, particularly if backed by the strength of the Union.