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Cash from Chaos

Psst. Wanna make some money? Sweet dough? Moolah? Now’s the time. Don’t tell no one else, yer know, keep it on the downlow ‘cos this is just for us, the elite like. I’ll give yer the name of a horse that’s guaranteed to lose. Bet against her and you’ll make a fortune. She can barely pound the track anymore and she falls more often than a Boing 737. Her name’s Sterling and she’s running, if yer can call it that, in the 11 o’clock Brexit Sweepstakes 31st October. She’s guaranteed to dive like Gareth Bale.

Don’t like betting? Wanna invest? Yer’ve probably missed the boat, or let’s call it the Cross Channel Ferry, to buy them Euros because they’re bloomin’ expensive now but I can hit yer up with some drug suppliers, legit British medical ones, they’re a hot investment right now. Wait until the sick and dying are whining for their meds after the No-Deal Event Horizon, squeeze them, they’re in pain anyway, then when a few have croaked, sell yer stock. Easy money.

And mate, when yer’ve made your dosh, when you’re living it large, you wanna pay tax on it? Nah, course yer don’t. Tax is for losers; yer money literally given to life’s losers. Yer lolly needs to go on holiday if you know what I mean. I got all the offshore accounts you could need. Those johnnies over the channel can launch their “Anti-Tax Avoidance Directive” next year but we’ll be well aaht by then, no regulations, no one knowing where yer money’s going, no questions asked. We’re not gonna be the next Singapore chum, we’re gonna be the next SingaRICH!

When Leave politicians talk about Brexit Opportunities they’re not wrong. As long as you’ve got capital, which most of us don’t, and the empathy of a psychopath, ditto, you, and your opportunities are golden.

It may sound a bit conspiracy nutty to link the chaos in British Politics to elite wealth creation but it is, increasingly, the only way to make sense of the bonkers situation we’re now in. Yes, “first-past the post” democracy is eminently exploitable by autocrats and wannabe demagogues. An unwritten constitution relies on shared beliefs and when they erode we can no longer rely on it to protect us. Party systems set up to elect leaders that our representative MPs have little confidence in is another recipe for disaster along with unchecked media xenophobia. It all adds up. Possibly, it is just the perfect storm that our creaking 17th Century system in a 21st Century mass communication globalised world, was always headed for. But, as Deep Throat told Bernstein and Woodward, “Follow the money.”

In a stable, liberal, “End of History” economy, it’s only the billionaires who get to consistently drip feed their fortunes. Profits on shorting currencies or buying or selling stocks are measured in hundredths of a penny as prices rise and fall in microscopic differentials. So you need many many pennies to make any appreciable difference. Profit is slow. For crotch scratching, testosterone pumped, city dealer types, these tiny advantages were so frustrating, Spread Betting surged in the 2000s. This wasn’t buying or selling actual stocks but betting on those tiny changes in direction that stocks may take. Opportunities for major profits and huge risks were thin on the ground before the 2008 crash and even thinner after that as regulations threatened the financial services. They needed a saviour and in 2016 it came.

Nathan Rothschild

Social media has dubbed it ‘disaster capitalism’. Creating chaos in order to profit on market reactions to it. The more divisive a political climate the more profit there is to make. The disaster capitalism industry has form. War profiteering has a long and undistinguished history. The shield makers of the Trojan wars didn’t go hungry. Famously Nathan Rothschild got early news of Wellington’s victory at Waterloo. He immediately sold his British stocks triggering the market to follow suit as all other traders believed he must have inside knowledge of the result and the French must have won. It drove the prices of the entire market down, and just hours before news of the victory came through, Rothschild bought the depressed stock which soared with the news making him a million pounds which, in 1815, was quite the haul, and just as surely drove Antisemitism up a notch or two. “The time to buy,” he apparently said, “is when blood is running in the streets.”

Lenin believed that it was only in conditions of catastrophic upheaval that humanity progresses fastest. Which is not so different from free-market disaster capitalists who seem to believe that economic advances are best won through the destruction of societies.

In Naomi Klein’s book The Shock Doctrine: The Rise of Disaster Capitalism, she argues that the societal collapses that have accompanied so many free-market economic policies aren’t the result of stupidity or mismanagement but are integral to the “free-market project”, which needs disasters and chaos to advance. Although Klein hints that these disasters may be manufactured by corporations using shady influence in government, she also concedes that “disaster” may just be part of the normal functioning of capitalism. “An economic system that requires constant growth,” she writes, “while bucking almost all serious attempts at environmental regulation, generates a steady stream of disasters all on its own, whether military, ecological or financial. The appetite for easy, short-term profits offered by purely speculative investment has turned the stock, currency and real estate markets into crisis-creation machines, as the Asian financial crisis, the Mexican peso crisis and the dotcom collapse all demonstrate.”

So is Brexit just a messy accident that has been in the offing for some time or a cynical ploy to enrich the ballsy British risk takers and re-invigorate the market?

The Observer journalist Carole Cadwalladr, currently being sued by Brexit backing investor Aaron Banks over claims that he had a “covert relationship” with and had been offered money by the Russian Government, has followed the money. She has, time and again, exposed the links between the Leave Campaign’s (and Trump’s) investment in Cambridge Analytica, dodgy data gathering and targeted social media ad campaigns. “Fake News” cry Leave supporters. We have our own minds, ads don’t make a difference. If that were true you’d think the advertising industry would be worth something less than the $1.2 trillion it is today.

Directly addressing “the Gods of Silicon Valley: Mark Zuckerberg, Sheryl Sandberg, Larry Page, Sergey Brin and Jack Dorsey” in a TED Talk they sponsored, Cadwalladr berated them for enabling this chaos. “I didn’t think it was possible to have free and fair elections ever again,” she wrote. “That liberal democracy was broken. And they had broken it.”

If you still think that our political chaos is just an accidental opportunity it is worth having a look at the play book on disaster capitalism written in 1987. Blood in the Streets, Investment Profits in a World gone Mad delineated how to invest as the world descends into division and violence. “A roadmap to understanding the relationships between politics, the mechanics of markets, and the way people respond to crisis.”

“The coming years will be a bad time to be ill advised,” warned the writers presciently, “A time fraught with snares for anyone who is unprepared. We could be on the verge of financial upheaval when blood will, indeed, ‘run in the streets.’ Many people will suffer staggering losses. Others, who take the right investment steps, at the right time, will earn handsome profits.”

Though they argued that knowledge of political machinations and opportunism was the way to profit on misery, they didn’t go as far as suggesting influencing policy to start the “blood” running. What makes one pause to think though is that Blood On The Streets was co-written by one William Rees-Mogg.

Before going into Government, his son Jacob started the investment firm Somerset Capital Management. According to the Daily Mirror, their “publicly-available accounts show its operating profit rose from £14.7m in the year to March 2015, to £18.3m in 2016, £27.8m in 2017 and £34.1m in 2018.”

Now yer can draw your own conclusions chum but the boy’s doing well. Chip off the old block yer might say. And yer got opportunities coming my old matey. Now’s the time to get your dosh out and splash the cash. Take a punt. The stakes were never higher and the old nag’s gonna fall before the final furlong. Get in there.