Been reading a lot of stuff about the financial crisis tonight. Now, I'm not an economist. Well not in any professional sense. But the blood of a Welsh hill sheep farmer runs through my veins, which makes me an economist of sorts. 'Be careful with your money' is the creed that has flowed down through the generations. Never gambled in business - except when there was no alternative (which did happen when I was 32 years old). Luckily, that gamble came off. I refused to carry a credit card for many years, believing it would encourage a spendthrift attitude. If notes have to be handed over, spending seems so much more painful. I remember going on holiday some years ago and paying with £20 notes. The lady behind the desk of the Aviemore hotel looked at me as if I was a criminal, and called the manager. This is just by way of introduction, informing you that my financial instinct is deeply conservative.
And another thing. And I don't think I'm unusual in that I've always been in some awe of the Governor of the Bank of England. Well I'm not now. While the bankers were screwing up big-time, and Gordon Brown's shiny new regulation system was fast asleep, the Governor said nought. Let's never forget that the mess we're in happened on the watch of Gordon Brown and the Governor of the Bank of England. I don't really know exactly how much of a mess we're in, but I did read what the Deputy Governor of the Bank said yesterday. His name is Charles Bean, so he must be able to count, and yesterday he said "This is a once in a lifetime crisis, and possibly the worst financial crisis of its kind in human history". If this really is what he thinks, why on earth is the Monetary Policy Committee so far behind the action. They're acting like a panel of reactive spectators. A flock of hill sheep farmers could do as well as that.
This week the Governor and the Prime Minister declared with great fanfare that the UK is likely to go into recession. They must have been the last two individuals on planet Earth to realise this. Its so obvious that interest rates are going to have to be cut. So why haven't they done it? Why have they left it until its too late? The only person disagreeing with interst rate cuts that I've read is Simon Heffer, which surely strengthens the argument in favour.
Another thing about amateur economists like me is that we like to keep our money in something solid, that we understand. You can keep your shares and bonds and pensions and such like. Probably missed loads of opportunities. I've kept my money in land. The only big business gamble I made was to buy acres with borrowed money. OK, so the return was abysmal, but it looks a lot smarter than most of the wheezes that the regulatory authorities sanctioned over the last ten years. Put sheep farmers in charge is what I say.