Gold Standard after Brexit, and a Matter of National Identity

It's hard to believe that a week has passed since Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term and quite a week it has been. Probably the most documented event of the year, this is perhaps a good time to deviate and turn our thoughts towards alternative reading material.

As usual every Friday, our editors get the chance to talk about their favourite reads of the week. This time round, they have also recommended a series of videos. So, take five and read on...

Victor Golovtchenko kicks off this week's "What We Are Reading" with his recommendation about how Alan Greenspan is advocating a return to the gold standard.

Alan Greenspan on Unsustainable Entitlements and the Gold Standard

This week I had the pleasure to listen to one of the veteran central bankers in the world Alan Greenspan speak for almost 30

minutes. It appears as if the end of his public service has changed the views of the former Fed chairman on a number of issues, which the Federal Reserve has to deal with. Greenspan is advocating a return to the gold standard in order to keep more strict checks and balances on Washington. The unfunded liabilities of the government in Medicare, Medicaid and Social Security are at the forefront of the next crisis according to him.

The issue of paying future debts is not only a hazard for the United States but also for the United Kingdom and Europe. More social spending across the West is about to get harder and harder due to productivity grinding to a halt while the population is aging. Almost all advanced economies are going to have to print loads of money or go bankrupt in order to meet their unfunded Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term.

In any case, if you are interested in learning more about the global economy and Alan Greenspan’s take on going back to the gold standard, the following video should be entertaining.

Simon Golstein is next up with his favourite article of the week which looks at the history of, and what lies ahead, for the nation state in the light of Brexit.

A Case of National Identity?

The events of last week led me to read this fascinating article by Debora MacKenzie which examines the history and the future of the nation state. The exit of the UK from the European Union has raised questions of economics and sociology, two subjects

inextricably linked.

The EU is ostensibly an economic union, but to what extent was its failure in Britain the result of a perceived loss of national identity? As MacKenzie puts it: "What the EU fails to inspire is nationalist-style allegiance... Europeans’ allegiances are no longer identified with the political unit that handles much of their government."

But national identity itself is arguably a product of economics:

"National identity was…deliberately fostered by state-funded mass education. The key factor driving this ideological process, Maleševic says, was...the development of far-reaching bureaucracies needed to run complex industrialised societies."

How would you explain the Brexit? What are the repercussions for the rest of Europe? Will the future resemble the "medieval model more than the Westphalian one" ?

And last but not least, Avi Mizrahi enlightens us with his recommended viewing of a series of documentaries about Shenzen, the manufacturing hub of the world.

Shenzen: The Silicon Valley Of Hardware

They say a picture is worth a thousand words so a video must be worth a million words, which is what I recommend you ‘read’ this

week. The tech magazine Wired has produced a series of short documentaries on the Chinese city which is the manufacturing hub of the world – Shenzen.

Titled 'The Silicon Valley of hardware' this series offers a truly interesting look at the place where all the ‘innovation’ from Apple, Samsung and the rest of the tech brands we all know really comes from.

For businesspeople that work with China, the third part is especially important to watch - “A new breed of intellectual property.” If you don’t understand why the Chinese don’t value IP rights and how they see them as a hindrance to progress and the economy, this will help you a great deal to understand their mindset, if you keep an open mind.

We conclude another week of stories that our editors are reading, along with the accompanying videos they have viewed. We hope you found their suggestions useful.

Feel free to share your views in the comment section and any recommendations of your own. We'd love to hear from you!

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