Currency Exchange
Originally uploaded by Martin Deutsch

I’m getting really annoyed by the way people assume that a low interest rate and a low exchange rate are what this country needs.

To start with the latter, it used to be the case that a lower exchange rate, i.e., a devaluation, was a good way to get through an economic downturn because manufacturers would export more and there would be fewer imports.

However, these days almost everything is produced abroad – even those products that are technically produced here are often just assembled from parts produced elsewhere.

This means that devaluation leads to higher prices (= inflation) much more quickly and strongly than in the old days.

Sure, people will go on fewer holidays abroad and buy fewer or cheaper foreign products, and more tourists will come here and buy more, all of which will help, but there is no manufacturing industry that will benefit, so in practice most people will just be poorer and less tanned.

A low exchange rate also makes it very unattractive for foreigners to come to work here, and it makes it very appealing for British people to work abroad.

As an example, when I moved to Scotland in 2002, my salary looked attractive, but if the exchange rate had been where it is today, I would have earned the same by working in a supermarket in Denmark, so there’s no way I would have accepted the job.

Actually, fluctuating exchange rates is a huge problem. Around the turn of the millennium, when the pound was very strong, the UK was a bad place to do manufacturing, but because the salaries looked attractive abroad, it was a good place for multinational financial institutions. These days, it’s just the opposite.

But it takes years to start or change successful companies – you can’t just convert a bank into a TV factory overnight.

If the currency had been stable, for instance by being part of the euro, companies would have known what the UK would be a good “Standort” for.

Let’s now return to the interest rate.

Classic economic theory says that in a recession, you lower interest rates to make people borrow more money, thereby stimulating investment and consumption.

But this time the banks are hoarding money, so most mortgages are still high, and most companies can’t get the loans they need.

So the actual consequence of the low interest rate is that it makes it unattractive to hold British pounds, so the exchange rate collapses, pushing up inflation in the process and leading to all the nasty consequences described above.

I would therefore recommend putting up the interest rate again (not a lot, just to about one point above the Eurozone interest rate) in order to strengthen the pound and reduce inflation.

And as soon as possible after that, join the euro!

bookmark_borderThe course of this recession

For most of December, I’ve been wondering how the shops could afford to reduce their products so much before Christmas, what with the falling currency and everything.

But then my mother came home from a shopping trip to town and said something that made it all click into place in my mind: “Clarks have got no new models, they’re just selling old stuff.”

So this is what’s happening:

(1) Because of the credit crunch, the shops can’t get credit to buy new stock.

(2) Because they’ve got no new stock, they have to sell whatever they’ve got in stock.

(3) In order to make people buy this old stock, and to get cash to buy new stock quickly, the shops have reduced prices vastly. Also, because this is old stock, the falling value of the pound has not affected anything yet.

(4) Once the stock has been sold, some shops will have got enough cash to buy new stock. All other shops will shut.

(5) The shops that will be able to restock in January will have to pay in devalued pounds, so prices are going to jump up a lot (I forecast 50-100% price rises, based on the difference between the same Sony lens in restocking Amazon [£335] and selling-old-stock Jessops [£145]).

This will makes sales collapse, and so more shops will close.

I don’t understand why the Bank of England don’t understand that letting the pound collapse will cause horrible disasters. It’s not like the old days when there were plenty of home-made products people could buy instead.

bookmark_borderSamme traditioner, men ikke på samme tidspunkt

Christmas crackers
Originally uploaded by ejbaurdo

I både Danmark og Skotland er det en yndet tradition at sidde med sjove hatte på og trække knallerter med sidemanden.

Men i Danmark gør man det til nytår, hvorimod det i Skotland hører julen til.

Det samme gælder champagne og dronningens tale, der også er nytårstraditioner i Danmark og juletraditioner i Skotland.

Fyrværkeri er i Danmark også forbundet med nytåret, hvorimod det i Skotland især fyres af på Guy Fawkes Night.

Og udklædte børn, der tigger om slik ved dørene, ser man til fastelavn i Danmark, men til Hallowe’en i Skotland.

Men i det mindste er Danmark og Skotland enige om, at julemanden kommer med gaver til jul – i Georgien kommer han til nytår (og er klædt i blåt, ikke rødt)!

bookmark_borderWhat a Christmas!

Christmas Dinner
Originally uploaded by pete4ducks

It sounded like a good plan: My parents would arrive on the 19th, and on the 25th Phyllis’s parents and brother with wife and son would come for Christmas lunch.

I was going to serve some crostini when they arrived, and the actual lunch would then be a prawn and sweetcorn bisque followed by goose and pork roast, followed by cheese and finally three-coloured chocolate mousse.

However, first nephew Gordie got a stomach bug. Then Anna got it. Then my parents. But Phyllis and I were still going strong.

Then yesterday, we had a nice Danish Christmas dinner, my parents went for church as 11.30 pm, and when they came back I was feeling queasy.

I lasted till bedtime, when I emptied my entire stomach. Phyllis lasted till 3am, and in the morning, we were both feeling dreadful.

I found my parents and asked whether they were well enough to cook some food. They fortunately agreed, so Christmas day could go ahead, albeit with a reduced menu.

I didn’t join them for lunch, but I believe they had carrot soup followed by pork roast, then cheese and finally Danish ris à l’amande.

I think the day went fine, even if Phyllis and I were completely useless!

bookmark_borderAncient Greek diphthongs

Ancient Greek Sculpture
Originally uploaded by Mr G’s Travels

I’m teaching myself a tiny bit of ancient Greek at the moment.

There’s one thing I’ve been puzzling over with regards to the pronunciation.

My problem is with the short and long diphtongs.

In an unstressed position the difference is very clear: ?? [ai] vs. ? [a?i].

However, both can receive the circumflex accent: ?? and ?. The circumflex accent is supposed to be a rising-falling pitch, i.e., [???].

But I find that this is hard to achieve without a certain amount of vowel length.

In other words, ? is easy to pronounce as [?a?a?i], but what about ??? Is that [??a?i] or [?a??i]?

bookmark_borderAnnas fødselsdag

Birthday girl
Originally uploaded by PhylB

I fredags var det så pludselig et år siden, Anna blev født.

Det er utroligt, hun allerede er blevet så stor!

Jeg lavede naturligvis en lagkage til hende (hindbær), og hun fik gaver, og mine forældre kom også (de brugte Ryanairs nye rute fra Billund til Edinburgh).

Anna kunne godt li’ kagen og sine gaver, så jeg tror, det var en god dag!


Jeg opdagede i dag, at Norwegian er ved at oprette en rute mellem København og Edinburgh.

Det bliver jo et godt supplement til Ryanairs nye rute mellem Billund og Edinburgh.

Blot en skam, at der ingen direkte forbindelser er til Glasgow fra Edinburgh Lufthavn, men det kommer måske også en dag.