Britain – phuski or phoenix
With just about two months left before the expected election date of May 6, the outcome is impossible to predict. A Tory majority, a minority Labour government, or a split Parliament with the third-party Liberal Democrats holding the swing votes are all viable scenarios. The markets have a jittery season ahead of them. (via In Britain, a Rout Turns into a Race – BusinessWeek).
At the edge of the precipice!
Last time around, in the stagflation of 1970s, as the low-exchange rates era in Europe ended, in the post oil-shock world of 1973, Britain inched to the edge of precipice of becoming a Third World economy. It was North Sea Oil that saved Britain. What will it be this time? Britain’s options are shrinking.
The Great Squeeze
Between 1930-1940, Britain was in a similar position, electorally and economically. Churchill, Montagu Norman executed the Great Squeeze on the Indian Peasant. What will it be this time around?
On October 27th, 1931, the Ramsey Macdonald led “National” Government (Conservatives and Liberals coalition, fearful of the rising Labour Party) in Britain won a huge majority of 554 MPs of 615. The economic crisis of September (misnamed as the Indian Currency Crisis), ensuing Depression era problems in the US, the Weimar Republic problems – and other issues pushed this ‘National’ government to ram through a series of measures (page 130-131) that depressed silver and gold prices and raised interest rates in India.
Which way the wind blows
Will Scotland secede? Will North Sea Oil go away with Scotland? Will Britain be able to withstand a hung Parliament and a coalition Government? Italy, after WW2 and before 1993 electoral reforms, had nearly 60 Government changes in 47 years (1946-1993). Will Britain go the Italian pre-1993 coalition-era way? Rapid descent or a slow spiral.
Or an unlikely phoenix-like rise?
PS – Phuski is colloquial Hindi for damp squib