Gestaltz

A slight change in focus can produce a profoundly different understanding https://twitter.com/gestaltz

A Role for Bitcoin in the Grey Web

One of the problems that the Bitcoin phenomenon has presented has been a function beyond the dark web. Some has suggested it has a role providing a transaction network for the Unbanked. This has been unconvincing for two reasons. First, the Unbanked are also ‘un-wealthy’. Second, idea that consumers have easy access to the web but are Unbanked makes little sense. The functional role of Bitcoin thus seems to be the dark web. The speculative role of course is open to all and self-evident from the price fluctuations but this blog is concerned with Bitcoin as a means of exchange.

There does seem to be a legitimate role in what might be termed the grey web. There are many commercial activities that are locally legal but globally problematic. Recreational marijuana is legal in Uruguay (for locals not tourists) though oddly medical marijuana is not legal (go figure). The same is true in some US states and around the world there are local variations in degrees of illegality. Those providing the M need banking facilities and many banks, which invariably have a global perspective, feel uncomfortable providing such facilities. The source of the problem is the hegemony of US federal law in global banking and the illegality of M in US federal law. It is dangerous for any bank to provide facilities to locally legal M trading if it is ever to have dealings with the dominant US banking system.

The global hegemony of US federal law appears in other spheres also. Politically motivated sanctions also create problems for banks and other commercial operations. If the US imposes politically motivated sanctions on a country, the dominance of US banking and economic activity forces it on all even if a sovereign country disagrees with this decision. In effect this country is cut off not only from commercial activity in the US but also from global corporations which have commercial relations with the US. This is basically every significant corporation. So ignoring US politically motivated sanctions can be expensive and sometimes dangerous. The result is that locals find themselves bound by US federal law even though local law does not have any sanction. Enter Bitcoin.

Bitcoin provides a currency for this grey web, locally legal commercial activity falling foul of US federal law. The Bitcoin monetary system provides a framework for money based trade that is independent of banks and thus can facilitate trade that cannot use banks. To be fully effective it does have to expand beyond the items prohibited by US federal law so that traders can do business more widely. This seems to be happening with more and more globally legal commercial transactions possible in Bitcoin. So this answers my own question; which legal commercial transactions do Bitcoin, and only Bitcoin, make possible? Bitcoin has a function and it is created by the hegemony of US federal law. This is a very powerful impetus which I had previously not grasped. Mea culpA.

Ironically, the weakness in the Bitcoin monetary system is the limited supply. This gifts a dramatic seigniorage to those holding Bitcoin and is creating a volatile bubble condition in the early stages of development as a grey web monetary system. As long as it is merely an exchange rate this will be a problem. The Bitcoin price of M is rising rapidly and is quite volatile and this is important because the users are paid in USD etc. When everyone is paid in Bitcoin this is less of an issue. Nevertheless, Bitcoin has a future as money as long as the US (or any other hegemonic power) tries to impose its will on global activity and indeed on states within its own Union.

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NS&I: something interesting

The BoE 25 bp base rate increase saw NS&I boost their existing savings rates by 25 bp from 1/12/17. They are good like that. However, what is more surprising is the appearance of new, very competitive, products. NS&I is the closest retail can get to a risk free savings deposit, and by retail I mean up to £2m. The Direct Saver account pays 0.95%, allows instant access, and can take up to £2m. If you have more than 85k and do not want to have accounts all over the system it is a decent option. So far nothing new.

NS&I has introduced, without fanfare, a one year and three-year fixed rate option each capable of taking £1m. They pay 1.46% and 2.17% respectively. If you look at comparison sites you will find the three year rate is about as good as it gets. The yield on a three year gilt is about 0.6%. The NS&I three year is a very competitive offering, which begs the question, why?

At this rate the three-year will overwhelm offerings by banks and builders which will struggle to attract new three year deposits and will lose maturing deposits. Even the one year fixed rate is capable of doing some deposit damage. The government can fund in gilts at much lower cost so as a funding strategy it makes little sense. NS&I is nothing more than an alternative to gilts which is why it is risk free. There must be a reason the government has opted to raise some expensive funding.

The new products are certainly welcome to the savings community and it will put pressure on banks and builders to move their rates up as well. Perhaps this need has motivated the new products though whether the government of the day ever gets much political benefit from competitive NS&I products is unclear. The other possibility is speculative and based on my own anecdotal observation. NS&I products and rate changes always seem to mirror the prevailing monetary policy direction quite closely. Not only does NS&I respond quickly to rate changes but it seems to anticipate the policy direction rather accurately. The new products may be telling us something about the speed and duration of expected rate changes by the BoE. Sounds implausible but worth monitoring.

Judging the Bank of England

The Bank of England has been the subject of some not inconsiderable criticism since the financial crisis. Mark Carney has come in for some personal attacks especially from Brexit-types. So how has the BoE performed? First let us remind ourselves what is the primary objective of the BoE as set out in Monetary Policy Framework .

Monetary Policy Framework

The Bank’s monetary policy objective is to deliver price stability – low inflation – and, subject to that, to support the Government’s economic objectives including those for growth and employment. Price stability is defined by the Government’s inflation target of 2%. The remit recognises the role of price stability in achieving economic stability more generally, and in providing the right conditions for sustainable growth in output and employment. The Government’s inflation target is announced each year by the Chancellor of the Exchequer in the annual Budget statement.

The objective is price stability as defined by a long run compound average annual rate of inflation of 2%. The index of choice is the Consumer Price Index. The compound average rate of inflation in the last 9 years (from October 2008 in the heart of the financial crisis) is 2.17%. You can calculate it yourself using ONS data if you wish. I would say that is not too shabby considering the enormous and unprecedented challenges faced by the BoE over this period. The year-on-year Inflation rate has varied considerably but the compound average is remarkably close to 2%.

CPI 10 years

The RPI index has been abandoned as an official inflation statistic as not fit for purpose. Nevertheless it is still widely used in all sorts of financial contracts. Interestingly the conclusion would not have been wildly different if the RPI had still be the official index. Over the 9 years from October 2008 the compound average annual rate of growth of this index was 2.64%.

So why is this worth a blog? First, contrary to popular belief, ex post, this has not been a deflationary period but rather one of price stability. This is not to say there were not enormous deflationary pressures.  Thanks to the BoE they did not become deflation. Second, if the BoE can achieve price stability over such a challenging period one might reasonably conclude that the long run expected rate of inflation is 2%, provided the objective and independence  of the BoE remains unchanged. This is an important observation for all sorts of planning needs. Finally, rather than attack the present governor of the BoE we should thank him. He has done a remarkable job. I doubt the previous incumbent would have done as well.

Political Classification and Brexit

Political views are commonly classified along a linear scale. You are right-wing or left-wing or somewhere in between. Different people associate different characteristics with the various positions. Classifications are thrown as insults or plaudits depending on how the associated characteristics are viewed. Some regard all right wing people as racist and nationalist whilst left-wing people are globalist and tolerant of diversity. This is of course a long way from the truth, as anyone even vaguely familiar with the current UK political scene can testify. So what is a valid basis for this linear political classification?

A key distinction is the attitude to agency. It is about freedom to determine your own life and individual responsibility. As a general rule, the greater is individual freedom the greater is individual responsibility. The corollary is that the more social protection an individual receives (less individual responsibility) the less freedom that is available. The right tend to favour more individual freedom and responsibility and the left tend to favour greater collective responsibility and less individual freedom. The difference between laissez-faire capitalism and socialism is rooted in this simple distinction. This is a valid basis for the simple linear political right/left classification.

The philosophical principle that underpins the distinction is moral hazard. Every parent struggles with moral hazard. The more you take responsibility for your offspring the less they take responsibility for themselves and the more you feel entitled/obliged to manage their lives. The more you help them the less capable they may be of helping themselves. The same issue arises in charity. The more you bail people out the more dependent they become on bail-out. So it is with individuals in society. The higher the safety net the less afraid individuals may be of falling into it. Collective support elicits different types of individuals and individual behaviour. Looked at in this way it is possible to reassess many aspects of different societies in terms of the simple linear political classification.

The USA is, for example, a fundamentally right-wing society. The safety net is set very low. There is considerable freedom and with it the concomitant responsibility. Contrast this with the Nordic countries where the safety net is very high. One can also see ‘socialist’ ideas in regulatory frameworks. The regulator tries to protect people from their own ignorance and weakness. This is increasingly true in the world of finance. Caveat emptor or buyer beware, a standard position of the laissez-faire, is being usurped by ‘protections’.

My preferred spread betting agency just asked me if I wanted to be classified as a professional or retail client. On the criteria presented I am clearly a professional client. It is clear the two categories can be treated differently by the agency though it is less clear in what way. From (professional) experience I know that retail clients have more regulatory protection but also less choice in what they can do and the risks they can take and are subject to lots of pointless warnings (which they still ignore but it gets the agency off the hook). Caveat emptor is partially resurrected for the pro but removed entirely for retail. The regulator removes your freedom in order to protect you. Very left-wing.

Regulation seems to assert  ‘you are too stupid to look after yourself so we will do it for you but you must do what we say’. The greater the regulation the more people become dependent upon the regulator and the less they even try to think for themselves. Which brings me to the point of this blog. Individuals are afforded enormous protection from poor financial decisions but were felt capable of understanding and voting on one of the most complex economic, political, and constitutional issues of modern time. The usual protection of a representative parliament was eschewed for a referendum on whether to stay in the EU. You are required to take professional advice before giving up some pension arrangements in favour of income drawdown but you were deemed competent to judge the efficacy of leaving the EU both for yourself and the rest of nation!

Gunpowder

There is a three-part drama on BBC 1 entitled Gunpowder. The final part will be screened on Saturday but you can watch on iPlayer anytime. It is not a remarkable piece of work. What is remarkable is that it was ever produced. Growing up in London each year we celebrated Guy Fawkes night. We let off fireworks and burned an effigy of Guy Fawkes. It was vaguely understood that he had tried to blow up parliament and given the way he was dressed we assumed he was a Royalist and undemocratic. The subject never came up in history at school and I did history up to A-level. I was in my early 30s before I realised that Guy Fawkes night was a celebration of burning catholics. Moreover, Guy Fawkes was not trying to blow up parliament. He was trying to kill King James I by blowing up the House of Lords during the state opening of parliament. Very much not a Royalist. Guy Fawkes night is about the religious conflict that once beset the British Isles, the legacy of which still haunts Northern Ireland.

England it seems was full of jesuit priests ministering to the catholic flock. They did so in secret. Some important advisers to the King felt they were radicalizing the catholic population in preparation for an assassination and introduction of a catholic monarch. Others argued that most were moderate catholics, loyal to the protestant King James I, and being driven to extremism by discrimination. The first episode contains an execution scene which drew considerable viewer criticism. My only thought was that given the mode of execution the true distress that the victims would have experienced and displayed was not adequately projected. It was greatly sanitized yet still too gruesome for the sensitivities of modern folk.

In the second episode Robert Catesby, leader of the band of catholic extremists planning to assassinate King James, visits Spain to seek help with arms and men to aid a catholic uprising in England. His moral claim is that good catholics cannot simply practice their faith in protestant England without oppression. The Jesuits he is visiting invite him to the live burning of a jewish couple. The irony it seems is lost on Catesby. He continues to press on with the plot.

The backdrop to the whole plot is the political situation. Spain, as protector of the ‘one true faith’ has a lot of influence in Europe and seeks to influence England. The latter naturally resists but both are weary of war and seek an accommodation. The situation is summed up in one line; This is England sir. Our laws have nought to with Spain. Sound familiar?

The social and political parallels with the present seem to be quite close. Spoiler alert! The plot fails and the plotters all die. But Guy Fawkes has nothing to do with democracy. It is do with royal power, religious bigotry, and extremism. We are celebrating the defeat of a catholic plot against a protestant King and the defeat of the influence of Spain and the Vatican in English political affairs.

The Bitcoin Phenomenon

Bitcoin, and cryptocurrency in general, has become something of a phenomenon. Bitcoin (USD)_20171023_08.13

I wrote about Bitcoin in my early blogs but made no attempt to buy into it. More fool me you might think. Perhaps. I drew a distinction between the technology, blockchain, and the use, to create a private money. I was concerned about the opaque quality of Bitcoin transactions and the function the private money might serve. Sooner or later I expected the authorities and formal system to become concerned and act. I suggested (in a published letter to the FT) that cryptocurrency might develop as an alternative to offshore banking, which is increasingly coming under scrutiny. The authorities are becoming less and less tolerant of areas they cannot regulate. Bitcoin and cryptocurrency is no exception. I suggested that when the Bitcoin economy intersects significantly with the formal economy it would start to come under scrutiny. It has begun.

Bitcoin could in theory function as a closed economy system. Only Bitcoin (or some private money) is used to transact and goods traded are traded within this informal closed economy. But the goods must come from somewhere. If the goods are drugs which are produced illegally this can work. If the goods are illegal weapons this can work. But if the goods come from the legal economy they will leave a trace and the closed system starts to leak. The ‘success’ of Bitcoin contains the seeds of its demise. The rise in the US Dollar price of Bitcoin in 2017 has been dramatic. Cryptocurrencies are now bought by legitimate people using legitimate currencies. There are formal exchanges and legally produced and sourced goods traded in Bitcoin. Governments, central banks, and commercial banks are taking note.

One of the big problems for commercial banks is money laundering. They have enough problems containing it in the formal economy using legitimate currencies. They have little chance of containing it in the Bitcoin world. If a legitimate bank allows a Bitcoin trader to have an account and this trader is implicated in money laundering they may find themselves in the dock. It is simply not worth it. Any banker is aware that money laundering legislation is unforgiving and totally overwhelming. It is not enough to say you did not know. You have to demonstrate you could not have reasonably guessed or had suspicions. Not so easy. So what is the response if you deposit a large profit made from trading Bitcoin?

The bank could ask you to show how you acquired the Bitcoin in the first place. Do you have a verifiable record? No? Oh dear. Then you under suspicion at once. If you are a legitimate business that accepts Bitcoin and pays with Bitcoin can you demonstrate where the customer got the Bitcoin? Unlikely. If you are a Bitcoin trading company or exchange can you demonstrate where your customers got the Bitcoin? Know your customer rules might apply even if you are not regulated. Banks are regulated and need to ask. They might reasonably not want to allow you banking facilities. The authorities might also want you to answer some questions.

Authorities are unforgiving and have long memories. They also often use retrospective legislation as anyone with an offshore account probably has worked out by now. Tax bills plus penalties from 20 years ago are now causing some people headaches. If the authorities decide to act you never know what problems you might encounter. You may have made a fortune in Bitcoin but  converting to Dollars or Euro may bring other challenges and they may come in 20 years time. Who knows?

One final comment on the above chart. No price rises like that without coming down at some point. Do you know when this will be?

Why do we read books?

Several conversations over the last year or so has left me pondering the motive for reading books. On the surface it seems like an uninteresting subject. People read literature for pleasure. True enough but why is it pleasurable? Others read for knowledge or understanding or inspiration. In the age of the internet are books the best source of knowledge or understanding or inspiration? Modern technology has made owning and reading books much easier. You just load a Kindle or iPad. No need for bookshelves unless you are old-fashioned like me and like the book as an object as well as a repository of words. Book-reading is alive and well. But why?

Literature enables us to share in someone else’s imagination and experience their ability to articulate this imagination. A particular phrase or expression can conjure up an idea or emotion that we have experienced but could never articulate. Well read literary types will quote from poems and Shakespeare at key points in conversation to add a sharpness to their own expression. They may refer to plots or ideas found in books. We are impressed. They are ‘well read’. However, does this simply not reflect a limited imagination and inability to express one’s own thoughts and emotions? What can literature offer that daydreaming cannot? Moreover, why does reading not develop the skill to articulate one’s own emotions and thoughts in an original way. It is interesting to note that in academic work quotation is frowned upon unless the quotation itself is the subject. Part of academic training is to express ideas ‘in your own words’.

Reading does develop imagination and skill in articulation. The implication of is that you should read more when you are young and in your developmental stage of life than when you are older and have more experience. If you are reading a lot when you are old then something else is probably going on. It is an escape from reality. A suspension of life. It is a form of self-medication with no side effects. The literature does not have to be ‘good’ merely far from your reality. I achieve the same effect watching TV dramas. The format is formulaic. The plot is predictable. The effort required is zero. If reading novels does it for you then keep doing it. Very healthy but don’t bore other people with what you have read.

Nonfiction is another matter altogether. The purpose is presumably to be informed. I have a great many nonfiction books very few which I have read from cover to cover. Increasingly, I buy less and less. Information is now widely available in appropriate packets and at much less cost. I have the advantage of years of training in the epistemology of social and medical sciences so have the ability to extract information from a wide range of sources. I do not need it ‘dumbed down’ for my consumption. This it seems to me is what nonfiction now offers people; a dumbed down package of information and ideas. The economics of publishing is now such that one has to reach as wide an audience as possible. So the books are pitched to the lowest common denominator ( I of course exclude textbooks from this comment though even these seem not immune from the dumbing down).

The dumbing down concerns me. I have read two nonfiction books cover-to-cover in the last few years. David Nutt “Drugs without the hot air” and Giulia Enders “Gut”. Both cover very technical subjects in a very accessible way. Both books contain a lot of information. The Enders book emphasises the importance of the gut in physical and mental health, and provides some detail. The Nutt book makes plain the inconsistency in UK drug policy and provides a lot of useful detail. Neither book is definitive but Nutt’s book is potentially dangerous. It presents a complete view of the world of drugs. It is influential and it is clearly designed to be influential. The reader is being persuaded of a view by someone in authority. It is not an unambiguously ‘correct’ view and critical reading requires considerable prior knowledge and thought.

This brings me to the main point of this blog. A book has at least n+1 authors, where n is the number of readers. It is not what the author intended that matters but what the reader understood and the behaviour reading induced. A book is worthwhile if it inspires thought and encourages further investigation. If it completes thought and gives the illusion of knowledge then it is dangerous. The problem I perceive is that in today’s busy world many people use books as a substitute for thought and articulation. Instead of expressing an idea in their own words and demonstrating their understanding they refer to a book. They may as well quote Shakespeare.

The conversations were useful in one respect. I was motivated to rewrite my ‘about me’ section and explain more clearly the purpose of these blogs. It also contains a philosophy of knowledge which can be summed up as society cannot acquire knowledge because it also defines what it is. This is my understanding of the loadstone of Derrida’s work. Some may also have noticed that my view of authorship originates in the work of Barthes. I have been influenced by these philosophers but what I write is mine. And what you understand is yours. The author can inspire you but ultimately what you understand is your responsibility. This is a great freedom but requires thought and imagination and both need exercise to stay sharp. Read less but think and daydream more.

Catalonia, Nation States, and the EU

The unseemly events in Catalonia over the weekend bring me back to a theme that has featured often in the blogs; the demise of the nation-state. The nation state grew out of royal kingdoms. These kingdoms did not recognise national boundaries or ethnic groups. If the inhabitants or, more precisely, the controlling war lords aka the local aristocracy, accepted the king’s tutelage then they became part of the ‘Kingdom’. They were referred to as ‘Kingdoms’ even when there was a queen on the throne. In the interest of gender neutrality I shall refer to them as empires.

Empires were diverse, pluralist institutions, distinguished more by loyalty to the King than location or ethnicity. Sharing the King’s religion was important, paying taxes, and delivering troops when required were the basic criteria for demonstrating loyalty. The drive for self-determination brought forth the nation-state. It was carved out of the remnants of the empire but did not necessarily constitute a ‘natural’ state. It often amalgamated a number of ‘natural’ states. The precise definition of a ‘natural’ state is unimportant. Suffice it to say that, if the inhabitants of a locale have a sufficiently strong sense of identity, for whatever reason, they may constitute a natural state. It is not uncommon for inhabitants of natural states to wish for autonomy and self-determination.

Natural states may be based on religion, ethnicity, history or all of these concepts. If the inhabitants identify themselves as sufficiently distinct from other inhabitants of the nation-state then they may constitute a natural state. The inhabitants of the rest of the nation state, and many that live within the natural state, may not concur with this self-identification, and conflict may arise. Catalonia may constitute a natural state and there are many possible examples throughout Europe (and indeed the world) of potential natural states. I emphasise ‘potential’ because there is no hard and fast definition of a natural state. It is a matter of perspective. So how does this help?

Many nation states are arbitrary amalgams of natural states. This is true within the EU. They have been the subject of conflict and demands for self-determination for long periods of time. The institution of the EU provides an opportunity to resolve these conflicts in a relatively painless way. Allow self-determination under the tutelage of the EU. The continuing integration of EU states means that the distinction of statehood rapidly loses its significance for member states. It increases the number of voices at the council level but this can be accommodated. Otherwise there is very little significant change. It does however hasten the demise of the nation-state but this demise is inevitable within the EU. It will be resisted by those that have a strong national (nation state) identity and that draw power from the institutions of the nation-state. This last observation encapsulates Brexit.

The desire for the UK to leave the EU is of course not a British desire but an English desire. The UK comprises a number of natural states that have been dominated by England since construction. England is the largest natural state and dominates the institutions of power within the UK. The English realise that their power is being diluted within the EU and seek to hold on to national power by leaving the EU. The EU does require a loss of sovereignty but the Scots, Welsh, and Northern Irish lose none. They gave it up a long time ago. It is the English that lost sovereignty. The Republic of Ireland has prospered under the EU and finally shed the influence of England. There is no reason to think the natural states of the UK would not do so as well.

The EU in its present form is an imperfect institution. There is room for improvement. It will improve. It provides an overarching framework in which natural states can achieve a degree of self-determination, and importantly, separate identity, with minimal disruption. Many long-standing community conflicts could be resolved in this context. The problem is that most of the power within the EU sits in the hands of the leaders of the nation states. It is to the EU parliament that Europe must look for change.

 

The Oil Price

 

Above I have inserted a daily and weekly chart of the Brent Crude spot oil price (courtesy of IG Index). My interest was piqued by a press report that producers did not expect the price to rise much above 60. What they meant of course is that they did not expect the price to average much above 60. This may well prove the case but this does not mean it will not rise above 60, albeit briefly. The time horizon of a trader is much shorter than that of a producer. Moreover, oil is a commodity and commodities have their own price dynamics. The two charts above suggest Brent crude could rise as far as 71 but might fall to 54 in the short-term. It appears to have closed around 56.7 on Friday. If one can enter a trade close to 54, with a stop not far below, this would constitute a good reward to risk opportunity.

How did I come to this conclusion? An experienced trader looking at the above charts would understand at once. They may not agree but they would understand. An inexperienced trader would probably not understand and hence should avoid the trade. The reason for highlighting this price is to attempt to illustrate some aspects of trading with a live trade. It will be live as I propose to try to enter the trade via IG Index (minimum bet size) at some point and will report the process as I go along. I may get stopped out (and lose some money) or I may make a nice return. Don’t worry I will bet responsibly.

Trading of course is nothing like investing. If you intend to invest in oil stocks (they have juicy dividends at the moment) you should be interested in the average price. It is this that will determine earnings, dividends, and stock value. You should also be thinking long-term, years rather than days. My trade could be over in days. In the long run, oil may be a poor investment as alternative, cleaner, fuels prevail. However, the long-run is a long time and the energy industry is not moribund. It is active and clever. Extraction costs have been reduced (I am informed) and this offsets lower oil prices as far as corporate profits, and dividends, are concerned. Cheaper fossil fuels will slow the transfer to cleaner alternatives. The long-run may be longer than you think.

You might be inclined to ignore oil and oil based investments on principle. The sooner we shift to cleaner energy the sooner we save the planet. This is true and my sympathy lies in this direction. However, this ignores the reality of the situation. A great deal of capital and employment is vested in fossil fuels. A great deal of government revenue derives from it. The inevitable and desirable transfer will meet resistance and inertia. Many have gas central heating and diesel cars. They have gas boilers because gas is cheaper than electricity. The next car may be electric (or at least a hybrid) but today’s diesel has little second-hand value so there is an incentive to run it into the ground and delay purchase of a new one. Personal and corporate behaviours and motives are not that different.

In the meantime oil and oil based investments are everywhere. If you invest in a fund they will be in there, unless you choose one that explicitly excludes them. There are not many of these. So we may as well think about this industry. It is not going away for quite a while.

The Politics of Fear

Fear is a primal emotion and plays an important role in the survival of mammals. An excess of fear however can lead to vulnerability and mental health issues. We have all seen the film and heard the glib saying, “fear leads to hate and hate leads to the dark side”. It may be glib, but it is not without some truth. Populism is not a political creed (as seems to be the popular view) but rather a political method that taps into the deep well of fear.  It is used to generate hate, a powerful but destructive emotion. It is used by all political creeds and it has created a toxic atmosphere in the global political scene. The dark side awaits us.

The populist right used fear to generate a small majority of votes cast (not a majority of the ‘people’) in the Brexit referendum. A substantial minority of (mainly english) people are fearful of having lost something profound and associate this loss with immigrants. It was not difficult to persuade this group of the threat of being swamped by EU migrants. One should not underestimate the impact of Nigel Farage and his poster of massed refugees walking across Europe. The profound sense of ‘loss’ involved identity and security, both personal and economic, and immigrants are blamed. Rejection of EU membership, an unlimited source of this threat, was not difficult to inspire. The positive aspect of this is that a majority of those eligible to vote did not experience this unhealthy combination of fear and hate. They either voted to remain in the EU or were sufficiently unafraid to not vote at all. Fearful people are not normally apathetic.

Theresa May, for reasons known only to herself, decided to call a general election. It was an opportunity for the Remain camp (and the previously apathetic) to take back control. The Liberal Democratic Party and the Greens offered a clear promise in this respect. The Labour Party committed to see Brexit completed. The vast majority of previous Remain voters, voted for the Labour Party. The reason for this incoherent behaviour? Hate entered the equation. The referendum had generated so much hatred of May and the Tories that it overwhelmed rational thought. The Remain voter wanted to punish the Tories and felt only Labour could offer a viable alternative. They convinced themselves that a Labour government could be persuaded to row back on Brexit, despite there being no reason to believe this. Today the Labour Party and its supporters reek of cognitive dissonance. Fear and hatred has led to a collective mental health issue among a significant proportion of Labour supporters and voters.

Politics today is all about tapping into deep wells of fear. It is evident in the USA, France, Holland, Germany, Greece, Poland, Hungary, Norway, and Turkey, to name a few important countries. Support us because only we can protect you against those that wish to destroy your way of life. The best way to persuade people who are insecure and fearful to support you is to tell them they are superior to others, that they will prevail, and somehow deserve to prevail. So is born the politics of hate. This simple process is evident throughout history, even recent history. It is not forgotten because there are still cultural reminders to this vicious destructive process screened every day on our TVs. Every wartime drama series or film has this theme not particularly well hidden. Individuals everyday look into this mirror yet cannot see themselves.

As a child I often heard this expression’ my dad fought in the war to keep people like you out of the country’. Yet the films and drama series were telling this person that her father fought in a war to keep views like that out of the country. She could not see herself in the mirror. Today I imagine people of my generation watching series such as ‘Foyle’s War’ and not realising they are the bad guys…Cognitive Dissonance has become the mental health issue of our time.

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