Introduction: John Browne, a well-respected financial observer and free-market commentator, is the Senior Market Strategist for Euro Pacific Capital, Inc. He is also a distinguished former Member of Britain's Parliament and served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee and was a close associate of Prime Minister Margaret Thatcher. A graduate of the Royal Military Academy Sandhurst, Britain's version of West Point, and retired British army major, he served as a pilot, parachutist and communications specialist in the elite Grenadiers of the Royal Guard. In addition to careers in British politics and the military, he has a significant background, spanning some 37 years, in finance and business. During his career he has served on the boards of numerous banks and international corporations, with a special interest in venture capital. He is a frequent guest on CNBC's Kudlow & Co., former contributing editor and columnist of Newsmax Media's Financial Intelligence Report and Moneynews.com and writes for the Pittsburgh Tribune Review and Euro Pacific Capital. John is a regular contributor to TheDailyBell.com.
Daily Bell: Give us an update on what you've been doing.
John Browne: Basically, I'm still writing. I write for the Pittsburgh Tribune Review, I write for Euro Pacific Capital and I do sometimes two or three television and radio interviews each week. On top of that, I've been writing a book called Hidden Account of the Romanovs, which is a romantic historical novel surrounding the First World War set against a background of international intrigue, elegance and romance as the story winds its way through two of history's greatest histories, the murder of the Russian imperial family and the MI-6 led assassination of Rasputin. So that's a big book, about 380,000 words. It's just about to go into production and should be out by the end of May. It even mentions some of the things in your questions here – Mr. Carney at the Bank of England. He's mentioned in the book, too.
Daily Bell: Expand a bit on your new ventures.
John Browne: The book is the newest venture that I've got. Until the book is finished and out that's occupying almost all my time right now. One of my new ventures may be to get back to golf. I gave up golf to write the book and the problem is when you leave golf, golf leaves you.
Daily Bell: Are you an optimist or pessimist during these fraught times?
John Browne: I find it very hard not to be a pessimist at a time when we're completely lacking in leadership and our managers, as opposed to leaders, are taking us along easy and wrong directions, as opposed to leaders, who take us in hard or difficult but correct directions. So if you're going in the wrong direction ever faster and pushing all the liabilities for that wrong direction onto future generations of children and grandchildren I find it very difficult to be anything but pessimistic.
The leadership of the caliber of people like Winston Churchill, Roosevelt and, more recently, Margaret Thatcher and President Reagan, is sadly lacking today. These people took us on difficult roads but we were achieving things and getting greater all the time. Now we're going on the easy route. It's like a diet. It's easy to go into the sweets shop and eat lots of crèmes and sweets and stuff like that. The difficulty is to get on the track machine and get the running shoes on and eat properly.
So I find it very difficult to be an optimist in those circumstances, especially since the big peace at the end of the Cold War. When Reagan, Thatcher and Gorbachev achieved the end of the cold phase of the Second World War it opened the whole world to another almost 3 billion people competing for our jobs. And so with intense competition it's even tougher. And, in fact, instead of having even better leaders we've got mere managers who are only interested in their jobs. They talk the talk of being patriotic and helping the middle class and all of this but they don't walk the walk. And the walk is tough.
Daily Bell: Where does the economy of Britain stand today?
John Browne: In decline. Britain is awash with debt; it's crippled by the European Union with over-regulation in the European Union and massive immigration, which is stealing jobs from British workers at knockdown prices and things like that. It's a horror show, really. Britain has been thoroughly let down by its leaders – so-called leaders; I call them managers. And again, it really is a classic example. Here Margaret Thatcher took over and then handed over a fantastic country, vibrant. A basis of all her pluses can be summed up as a single word – a single word for which millions of people have fought and died and was the basis of the Magna Carta and the Declaration of Independence – freedom. And that freedom bred enterprise. And when Margaret Thatcher handed over Britain it was a thriving, enterprising country and now it's stagnating and heading downhill fast under leadership which is just managers who place patriotism way behind their own self-interest.
Daily Bell: Is it nearing a third recession?
John Browne: Oh, yes. People in England call Mr. Cameron, "Mr. Shameron," which I think is because he's a smart aleck. Just think of what he's done. In trying to get into power he offered the British people a "cast-iron guarantee" that he would offer them a referendum on Europe. Then he refused to give that referendum. Now that he's in trouble – and the trouble is obvious – he's now saying, 'Oh, if you vote for me again I'll give you that referendum after 2014.' Of course, he knows that on the first of January 2014 any referendum has to be approved by Brussels so he's so cynical. The deliberate deception of the British people is quite staggering. He knows they won't get it. Although he's offering it, he knows that it won't happen. It's deceit. And you wonder why people are heading downhill? People are disillusioned. They're unhappy. They don't look forward to going to work every day. They dread going to work. They're going to be over-taxed, over-regulated and led down the wrong path by dishonest managers.
Daily Bell: … who they continue to put back in office.
John Browne: This is the problem with our system, isn't it? The two parties have got such control, in both England and the US, of the electoral system. For example, state money is pushed towards these parties but independent parties like the United Kingdom Independence Party get nothing. The corruption in the funding of the two major parties was staggering. In comparison, UKIP was fined because one individual who gave a lot of money to the United Kingdom Independence Party had forgotten to fill in his electoral form and so for that year – although he was a British resident, British passport holder, born in England, British citizen – since he'd forgotten to fill in his electoral roll thing he therefore was not on the electoral roll that year. The United Kingdom Independence Party was taken to court and fined. That happened about three years ago. The United Kingdom Independence Party was taken to court and had to pay, I think, something like a quarter of a million pounds as a fine, which for a small party just starting is a lot of money. And yet the big parties get away with complete corruption, with money coming in from abroad, etc. These parties want to kill any breath of the grass roots like United Kingdom Independence Party, like the Tea Party in America. They try to kill it with ridicule but otherwise they try to cripple it financially or any way they possibly can.
Daily Bell: Why hasn't Britain come out of its slump?
John Browne: There's no leadership and therefore no direction, therefore no achievement, and all of the time in coalition with the Liberals, who favor the European Union, the European Soviet, and who favor big handouts to people and crippling anyone with savings. So when you have people with savings terrified for their savings you don't have enterprise so you don't have employment so unemployment rises, people get depressed and you have a slump. People don't want to go out and spend. They want to hoard their cash, so they don't spend it. Only the people that get given cash by the State dare spend it. You see a lot of spending on silly things, fast foods and all that sort of stuff at the bottom end of the market, because that money's come from the so-called state. In fact, it's come from grandchildren and the future. That group is spending still so you get that sort of spending but you don't get investment and you don't get businesses investing and, therefore, you don't get employment.
Daily Bell: What does the Bank of England need to do? Can it do anything?
John Browne: The Bank of England basically is in cahoots with the Federal Reserve Board and now it's facing a very difficult time because they've now got Carney coming in, the Canadian big-money man in the mold of Ben Bernanke. Mervyn King wasn't a big enough spender so they got Carney. Can you imagine the Bank of England, formed in 1694 or something, having a foreigner in charge of it? Out of 60 million people they can't find a British governor of the Bank of England? It's staggering to me. Anyway, they couldn't find a Brit who would spend the money like Bernanke's spending it so they got an imported man. He's probably quite a decent guy – I don't know him personally – but he's a money spender in the mold of Bernanke. So he's been put in there, just like the Bank of Japan, to get the whole thing spending money.
But they face a bit of difficulty, unlike Japan, in that Britain is moving into the European Soviet and the European Soviet is controlled more by Germany than the Federal Reserve Board, and the Germans only went into the euro providing it was going to be a sound currency. They were only prepared to switch their deutschmarks into euro providing it was a sound currency. So the Bank of England's going to be caught between two things: It wants to spend like Ben Bernanke and the Fed but increasingly, there's going to be German discipline imposed. And so it's very difficult to see what's going to happen to the Bank of England.
At the crux of the whole Western world you have a major struggle between the big spending, inflating countries of the Anglo-Saxon world – Britain and America and now Japan – against the Germanic people, who believe in austerity and realism and they're imposing austerity, and countries like Austria, Switzerland, The Netherlands, that sort of thing, who believe in real money. But the elite of Germany, as opposed to the ordinary Germans, want something in addition. They want the empire that Germany has always thirsted after and why we had the Franco-Prussian War and two World Wars – the Germans' lust for lebensraum, or living room, or empire. And Germany is out for two things: One, for sound money for its people because its people want sound money, but secondly, the German elite wants control of Europe. And look at how it's progressing now. Look at Galileo, which was the European challenger to GPS. It started to get into financial difficulty so the Germans came along and said, 'Okay, we'll fund it but we need control.' You look at how when the periphery countries of Europe can't stay in the euro Germany comes along and says, 'Okay, we'll fund you but you must have a German-nominated prime minister,' like Greece and Italy. Now the democratic people in those countries have thrown those two prime ministers out and there's more chaos. But in return for giving money, Germany needs control.
So you've got this huge struggle going on in Europe. One side is the desire of the German people for sound money and the other is their elite's, for control of Europe. And Britain is being sucked in and away from the United States. So Mr. Carney, or the promise of having Mr. Carney in there – and the Western, Anglo-Saxon elite have put him in there, to spend money – it's going to be interesting to see how he's able to act when the Germans exert their influence.
Daily Bell: Would it be better not to have a Bank of England?
John Browne: Well, I think the Bank of England in the good old days under people like Lord Cunliffe, the last of the real sound money governors, was fine. It provided liquidity for markets, which was very important, and helped the markets in Great Britain, whether they be insurance discount markets, brokerage markets, banking markets, interbank markets – all that stuff blossomed in London because of the liquidity provided and the lender of last resort provided for ordinary markets in London. And so it was a confidence booster and was very successful.
The problem has come since, when Britain started to turn, particularly under the socialist governments, towards Keynesianism and its magic drug of financial morphine. It was fine to start with, while we had no debt and things like that, but then when you're awash with debt more Keynesianism causes real trouble. And so the Bank of England when it started I think was a very, very good thing. Its power has just been abused by politicians of a Keynesian and a globalist hue.
Daily Bell: Where does UKIP stand on the matter?
John Browne: UKIP basically believes in sound money. Strangely enough, UKIP is not anti-European. UKIP is against British membership in the European Union. In other words, we do not want to be subjected to Europe. We want to be trading partners with Europe. We don't want to be under Europe, and particularly not under the Germans, who we respect greatly but we do not want to be second-class citizens in a Europe run by Germany. And so while we're not against Europe – and why would you be against one of your largest customers? – we wish to be a free country and free to trade with the rest of the world. We have huge ties with the United States, with Canada, Australia, New Zealand, South Africa and many, many other countries around the world. Why shouldn't we be free to trade with them as well as Europe? So UKIP stands for Britain being a free nation rather than subject to the EuroSoviet under the Germans, yet equally respects Germany and Europe and is not anti-them but wishes to be treated as a partner.
Daily Bell: Have you been surprised by the success of UKIP?
John Browne: Not really, considering the disaster of the Conservative Party, of which I was a member – and a keen member. In the days of Margaret Thatcher I was very proud to be a Conservative and shouldered with her in the whole of the Thatcher years and more. I was very proud to be a Conservative then because I believe Margaret Thatcher was a great leader. But then I also saw the moment she was hatcheted down by her lieutenants – not by an election. Margaret Thatcher was not defeated by a democratic election, either of Conservative Party or of the electorate. She didn't get deselected by either of those. She got hatcheted down by the knives of her closest lieutenants in a sea of political blood knee-deep, by people like Heseltine, Howe and Hurd, all of these people who just axed her down inside. It was a coup d'état.
So when that happened, something had to fill this vacuum. The basic core of people within the Conservative Party and those voters from the Labor Party in particular – who Margaret Thatcher had pulled in by giving democracy to the trade unions – said, "What the hell's going on? We want something else." And UKIP came forward – not as one entity at first. It was about three different parties that amalgamated into UKIP. And they luckily had some very outstanding people at the beginning. One was Jimmy Goldsmith and the other was Nigel Farage. And Nigel Farage, like me, was originally a Conservative candidate when I was a Member of Parliament. He is outstanding, and he is a classic example. He is not in it for himself. He's in it because of what he believes for Britain, like Margaret Thatcher, like President Reagan. And Nigel Farage, because he has that integrity and the courage to go with it and support that integrity, has risen. He is now in the European Parliament THE opposition because he's the only person who's got the guts to speak against this huge EuroSoviet.
So suddenly he's become a big deal across Europe because all these Europeans who may agree with the British and UKIP and all that, their only voice to hear that even translates to the citizens – and I'm now talking even about Germans, who do not want to be funding layabouts in Greece and Spain and Cyprus and to have people retire at 50 while they're working, and have their pension funds eroded to pay for it – they hear Nigel Farage get up in the European Parliament, and they're saying, "Here! Here!" Nigel Farage has become a big figure. And not only that, he's become an orator. And if you listen on YouTube to his speeches, he speaks better than all of the rest of the people speaking in the European Parliament and most other parliaments in Europe. He's a major figure. My only big fear is – and I keep telling him this – I hope he has good protection because there are a lot of powerful people in Europe who would love to see him killed. And that's the big, sad thing. He's become such an important person and such a thorn in the side of these globalist EuroSoviet people that I just fear for him, and I keep telling him that when I see him. I hope he's properly protected.
Daily Bell: Would you say there is a freedom movement beginning in the UK or are people still confused about what's going on?
John Browne: I think people are confused, of course. People in Britain are basically conscious of having their freedoms eroded bit by bit, all the time. It's becoming a nanny-state and with it taking away their freedoms. The whole thing is that this is by design. I believe, frankly, that in the 18th and 19th century, led by America, France, Russian Revolution, etc., and particularly by the printing press, individuals started to have more and more power because they could talk to each other, they could communicate. And through that power, what followed was money, and in Europe and America accumulated vast amounts of money and this was a threat to central government.
And I believe the aim of central governments now is to denude the savings of the middle class. Although the talk always is, "Oh, we're doing this to protect the middle class," it's exactly the reverse; they're actually doing it to kill the middle class and is doing so by eroding their savings, impoverishing them. Every single thing you see done today, you look at what the results will be and it will be to impoverish the middle class because when the middle class is gotten rid of you've got complete control. It's like the Soviets in Russia. Russia had no middle class and therefore, when Lenin came in he got straight into power and was completely dictatorial because there was no middle class to resist. This is what they want. And so freedom movements are tough to keep going because you've got the big, powerful state against you. UKIP struggles to survive, the Tea Party in America, all these sorts of things, because the big central, powerful government is determined to stamp it out. And that's one of the ways they do it. They can't just go down the streets and shoot people. They try to confuse the issue with false leads and ridicule – usually the escalation is to ridicule before they get really tough – and people are really confused.
But big-time debt is coming. That's why suddenly UKIP, for example, this thing that started off with every disadvantage, is now totaling 17% of the polls. It's ahead of the Liberals, an old and ancient party, and is now the third party of the United Kingdom. It's extraordinary, against all the big power bodies that are trying to kill UKIP. And now it's come through, the people power is forcing UKIP forward. And luckily they've got a great leader. Jimmy Goldsmith, sadly, is dead but Nigel Farage is just terrific, in my view, and speaks wonderfully on behalf of freedom as an individual and patriotically, and people are beginning to follow him. They're confused still but more and more people are less confused and therefore are joining parties like UKIP.
Daily Bell: Do you see the Internet as helping with the lessening of the confusion?
John Browne: Oh, enormously, enormously. I agree with those who say it's like the printing press. Suddenly, you don't have to just read this mainline media, which is all controlled by elites. The Conservative Party practically controls papers and so does the Labor Party in Britain, and if they don't want something from you it doesn't get printed. But on the Internet you can put up your own blog, you can write in and contribute and all that sort of stuff. That's the spread of real knowledge and it's also exposing the great wrongs of the people in power, which have been never exposed before.
Daily Bell: Why haven't the upper classes become more exercised about the horrible economy?
John Browne: I think in Britain, for example, the upper classes are all right. When you're very rich, these things are not hitting you immediately. You can still do the things you want to do and play the games you want to play and drink the drink you want to drink and so on. There may be minor inconveniences but you carry along. And there's a slight sort of guilt feeling of people that are very rich. I noticed it in the House of Commons. Some of the really old family people there in the House of Commons were part of the Left. We called them Pinkos because they were liberals, although they pretended to be conservatives, and they were the very people that stabbed Margaret Thatcher to death in the end because she wouldn't move over to their way of thinking.
So to start with, they've got a little feeling of guilt and, of course, they can opt out. They don't really get troubled by the things of the present world. If you can afford a Rolls Royce, you can afford to buy your daughter a BMW for her 21st birthday party, etc., you don't really have to trouble too much about the real world and so it passes them by. If you're on a vast estate somewhere you're pretty much self-contained. But, of course, it's all ending and it's rather like "Downton Abbey" after the First World War. It's beginning to happen to people all over the country because some of them still live like the upper class but really they're middle class. And the middle class is a target of the elite. It's rather just like "Downton Abbey." The earl was unaware that he was losing all his money and his estate was going bankrupt. He was unaware, detached, and that's what a lot of the upper class are in Britain – detached, semi-detached, and therefore not fully aware of what's happening to them.
Daily Bell: Do people at the top have a concern there will be civil unrest? Are they not really concerned it will affect them?
John Browne: I think they see it and they're scandalized and everything but they're sort of semi-detached. It's easy when you live on a vast estate to go away and be a mile or so from even the front gates in a country village or on a country road, and you don't actually come face to face with these people who can cause you trouble. So it's easy to sort of isolate yourself if you're that rich. And the poor, of course, are protected by the state. They get money handed out to them. It's the middle class that are suffering, the people who have a decent house in some leafy suburb of the city. That's where people go and throw stones through windows and trash their cars and all that. They're the people who are really suffering. And that's what makes up the bulk of these parties the elite scoff at, like the United Kingdom Independence Party and the Tea Party. A lot of the upper classes scoff at the United Kingdom Independence Party and pretend they're stupid, like in the United States where a lot of the very old, leading families scoff at the Tea Party.
Daily Bell: The British upper classes seem to use war as a way of manipulating their citizens. They whip them up with patriotism and outside threats. Will this ever end?
John Browne: I don't think it's the upper classes that do this. It's a very, very small elite you can count on the fingers of your hands who are in a position to do that. The general upper classes, which number in the thousands, are not to do with it; they just benefit by being very, very rich, and they toe the line because if one of these elite people is good to them they get even more riches. The people who are in control is a very small group and I wouldn't term it the British upper classes at all. They do the bidding of the elite and they do whip people up but they don't do it consciously. I don't think members of the British or the American upper classes consciously whip people up and then put them out into war as a manipulation. I think they genuinely believe in the war, they genuinely believe in patriotism and they're genuinely sorry for the bereaved and the dead. I don't think they do it cynically. But the people above them that control them is where the evil is.
Daily Bell: The City of London itself is the banking capitol of the world but distracts attention from itself by having the media focus on the Royal Family. How is the Royal Family doing these days?
John Browne: The Royal Family has been made entertainment. And just like the Caesars of Rome, the big thing is to take people's eye off the ball of the economic malaise we have – a disgrace, really, a disgraceful malaise – to take it off by having entertainment. Look, for example, at American television. I have something like 200+ channels here. I'd guess at any moment of any given day at least 20%, if not a third, of those stations has got some form of sport on it and a lot of trash entertainment. It's hard amongst those 200 programs to find some decent stuff when you're down to four or five programs because the rest is complete trash or sport. If you don't happen to like that sport it's pretty boring but it's entertainment. It keeps people's eyes off the ball. They're watching a soap opera or golf or tennis or something and they're not thinking about what's happening in the country. And it's exactly what happened in Rome. So those people are taking the distraction and one of those distractions is the Royal Family. But I think the Royal Family is doing fine. I think so. I'm not that close to it anymore but I think it is.
Daily Bell: Is there anything that will cause people to quit watching the circus and pay attention?
John Browne: Oh, reality. The enormous austerity that's heading down the pike, and they have to start thinking of survival, not entertainment. When you start not going to watch television but having to scrap for food and water and shelter, that's when you start not going to entertainment, when you have to fight for survival.
Daily Bell: Is there anything that could cause that kind of attention shift to happen before it gets to that level?
John Browne: Yes, leadership. Margaret Thatcher did exactly that. Now, Margaret Thatcher was pretty serious in life. She wasn't great on entertainment or any of that but she gave people opportunity. She said, 'If you work you'll benefit. You'll keep the money you earn. And if you want to be in a labor force you'll have democracy protecting you. You won't have to go on strike because of some threatening chap at a big, public meeting. You can have a secret ballot.' Margaret Thatcher and leaders focus people on reality and say, 'Okay. This is the reality. It's threatening if you don't work but we're going to give you the opportunity to work and what's more, if you work successfully you're going to benefit and be able to pay for a good life and for your children, and be able to store money for your future, for your retirement.' There's a huge proportion of American people who haven't got anything in their retirement funds. And they're going to be really surprised because the tax man's no longer going to be able to pay for all this stuff and the government's busy eroding it all. So the reality's there; it's just that nobody dares speak about it.
Daily Bell: Is the Royal Family and Britain's formal aristocracy still a popular institution?
John Browne: Well, it's very interesting. Last summer there was a popularity contest held in Britain where they picked out the ten most popular people in the country. The resulting list was headed by David Attenborough, who's a television star who's been on for decades talking about nature, whispering into the microphone as two butterflies copulate and all that. The country loves him. He's very good looking and he's charming and wonderful and everybody adores him. He was voted the top person in the United King for popularity. David Beckham, the footballer, I think, was number seven. There wasn't a single politician in the top ten, not one.
But number two was Her Majesty the Queen. She was the second most popular person in Britain, just after David Attenborough. And I think number five was Prince William and number six was Kate, and they were the only members of the Royal Family and there were no politicians. There were movie stars, film stars, football stars and everything but there were no politicians and three members of the Royal Family and the Queen was number two. It's fantastic. The Queen has done a fantastic job and she's greatly loved – also popular, but greatly loved by people. She's highly respected even by those who don't like her or love her. So I think as a popular institution it most certainly is.
And interestingly, in Australia a year or two ago the prime minister wanted to get rid of this overbearing monarch who he thought usurped some of his dictatorial power. He held a referendum to get rid of the British Sovereign as the head of Australia and she was voted in as the Sovereign there, too, by the people. And I think in Canada, as well. It's amazing. These politicians cannot bear it. They get elected and they try to stamp on the Queen's authority and she comes in and gets a referendum voted in her favor. Can you imagine being prime minister of England and you're not even in the top ten while the Queen is number two? The Queen has to take actions, she's very powerful, and yet she's number two. It's amazing, absolutely amazing. Yet I understand it. I've always thought she's such a great Sovereign, so loved and so highly respected by people, that I wasn't so surprised but I was really pleased.
Daily Bell: What happens when Queen Elizabeth leaves the throne?
John Browne: I think there will be very, very deep sorrow because, as I said, she's not just respected, she's loved by people. And so there will be very deep sorrow and mourning, and very genuine, even by people who aren't her natural supporters but see her as the figurehead of the country even though they're not necessarily monarchic. They're not anti- her; they just accept her and they respect her. And I think there will be an ordinary succession. There will be a lot of genuinely felt mourning.
Daily Bell: Let's turn to the EU. Is it dying?
John Browne: You want me to look that far over the cliff into a dark chasm?
Daily Bell: Does the City of London secretly want an EU?
John Browne: I'm not close enough anymore to London to really answer that question. I think that they are not too pleased about it now. In other words, they may have wanted it to start with because they saw that there'd be profit and they would be the center for a lot of these European debt issues and all that sort of stuff. When the European government issues debt they issue it through London, they float the bonds through London, all around the world. But Germany is gradually taking control, as the European Central Bank wasn't put in the big financial center of Europe, which is London, but was put in Frankfurt. And I think as more draconian controls start coming on like this Financial Transactions Tax and these banking rules – now every country in Europe is going to be asked to support all these periphery foolhardy banks and all that, I don't think the City of London likes that one bit.
And the City of London people, I think – from my own view and from my own contacts – are looking increasingly to free areas of the world like Dubai, Singapore, Switzerland and even Hong Kong, which is not as free as it was and Switzerland is now threatened by the European Union. But people are moving to Switzerland to run hedge funds, people are moving to Dubai, people are moving to Singapore to do all sorts of things – hedge funds, banks, everything. They want the freedom, which used to be in London and they now see as threatened. And so whereas what you said might have been true ten years ago, even five years ago, I think in the last five years things have changed dramatically, particularly, as I say, the Financial Transactions Tax and this universal banking, European-wide banking guarantees and things like that. So I think people are changing tremendously and people who were for the European Union because they saw it as an increase in transactions that would flow through London are definitely changing their tune a bit.
Daily Bell: It seems to us that the gravity of Western economics and finance is shifting abroad and the City wants this. True? False?
John Browne: Oh, absolutely. Money follows opportunity and freedom. In other words, anywhere people are 'kind' to money, like offering them opportunity for investment and freedom, to do the transactions they want to do and to keep a large part of the returns they make, obviously to pay tax but to keep at least a respectable part of the money they generate by taking a risk, money's going to flow. And with the money flowing the people who service that money, be they bankers, brokers, accountants, lawyers, etc., will follow. The things that make up the city, which are bankers, lawyers, brokers, hedge fund managers, money managers, accountants and all that stuff, will move to where the money's going. They will suddenly start living in places like Dubai and Singapore. So the leafy house which employed probably three staff and buys a big motor car, or probably three big motor cars for a family, and does a lot of luxury shopping in London and in the country, subscribes to the local fox hunt, the local shoot, the theatre and all that, will move so Britain will be further impoverished.
Daily Bell: Is that already beginning to happen?
John Browne: As I say, I'm slightly removed from it now. I'm sensing it and I'm beginning to see it. I see it even in America, people who used to be huge managers of money moving to Singapore. And I hear it on the telephone. I'll ask, "Where's so and so?" "Well, they've moved to Dubai." Things that I would have never thought before. I thought these people were wedded to England or wedded to New York and suddenly they're in Dubai or Singapore. I've got no statistics; I just sense amongst friends of mine and contacts I know that people are already moving.
Daily Bell: Is Germany the power behind the EU? How is that possible when Germany has been a defeated nation twice?
John Browne: Basically, you can't keep a good man down. If you look at the history of it, something like 90% of the Praetorian Guard of the Roman Caesars was Germanic. Germans slaughtered to the man over a period of ten days four Roman leaders, the largest defeat Rome ever endured. There wasn't a single survivor and the scene of the battle was lost for over a thousand years because there was no survivor. The German people have shielded Europe against the hordes from the east for centuries. Germany wasn't a country competing for empires. That came late, under Bismarck, when these princedoms were all united and Germany came into being in the 19th century. And then in order to grab the French Empire they had the Franco-Prussian War and the result was they were pushed back by the other great powers like Britain and so on and told to pay big reparations. Then they had the First World War and then the Second World War and still, one of the few countries in the whole of the world with real cash in the bank is Germany.
Not only that, they're not just rich, you see. They really want things. They want control and they're not just made of money. They're not just moneymakers sitting there; they want to use that money. They want power. And so Germany has decided, in my opinion, that instead of using a bayonet to get its empire and its lebensraum, it will use the money, the strong currency, the deutschmark. And as they were persuaded to go into the euro as long as it was going to be strong, the euro, which gives them the advantage of having a currency that's cheaper than the deutschmark because it's diluted by the others and therefore their exports are more easily sold on a price basis. But as they were used to selling on a quality basis because they have such a strong currency in the deutschmark, they still – German trade figures came out today. Still Germany's making big money despite the recession in Europe.
Germany wants control and the German state will run Europe. There will be no chewing gum on the street. It'll be a strictly run place but if you're not German-speaking by your mother tongue you'll be a second-class citizen. It might not be a bad place to be and that's why one of the most interesting trades today is to be short the yen and long the euro, because the euro – at the moment people are worried about and going into the dollar. It's time to be buying euros if you believe that Germany's going to be successful. And that's what I mean, the Bank of England thinks it's in the American camp with the Fed and now its subsidiary, which is the Bank of Japan, and it's gradually being pulled into Europe, where it will find itself a very junior partner under the European Central Bank, which is run by the Germans.
So even Britain's being pulled in. And for Germany to pay for the unbelievable collapse, caused by Greenspan assisted by Bernanke and now run by Bernanke, the biggest asset boom in history and the resulting collapse after it, the German medicine is austerity, to say, 'Okay, we've made a mistake. Take our medicine and then let's get back on our feet and work.' You can hear, you can see – here the country was defeated in two world wars and they still got back on their feet. But they're now saying not just Germany's going to get back on its feet but Europe's going to get back on its feet and it's going to be done by our German way that we've proved can be done, twice in the last century. And I think that's why an interesting long-term trade is short the yen – which I think in the long the debt is worth x, tomorrow's going to be worth a little less than x and that's where you go in the next three or four years. Long term it's worthless. I wouldn't give you anything in 20 years' time for a yen.
But a deutschmark or a euro? It's going to be a different story. And if Germany wins over the Anglo-Americans over the struggle for this survival the euro's going to go through the roof and it's going to be the big international currency of the world, even stronger than the renminbi. So as for Germany? You can't keep a good man down. They work. I've been in things with German banks. These people work. They're the best soldiers in the world. I was in an elite regiment in the British army but still the Germans were the ones that were respected as the best soldiers in the world and they're the best industrialists in the world. They're still making money! Despite Britain and Europe printing money to give us a living, the Germans are earning real money. They're the only place in the Western world that's doing that other than countries that are born with riches, like Canada and Australia that have got iron ore, coal oil, diamonds and gold sitting in the ground. But of countries that have to make something, like the Swiss – the Swiss have got a heap of granite with icing on the top of it and yet they're one of the richest countries in the world. It's the people that do this stuff. It's the people and the leadership and if they believe in something they do it, and the Germans, too. They believe in hard work but what's more, they believe that the hard work of today's citizens should be kept intact so that those hard working people, when they retire, should be able to enjoy the fruits of their labor. The Anglo-Americans say the hell with the future, the hell with children, the hell with grandchildren. We want that money for ourselves now and we couldn't care less for the future.
Daily Bell: Is China coming on as a world power or is that exaggerated?
John Browne: The crucial thing is what the elite of China want. Do they want to be a world power or do they merely want to be the center of the world, as they used to be? That's the key difference. The second key question is whether the elite in China are part of the globalized elite or not. Is it a separate elite? I don't know the answers to those two but those are the two questions.
Daily Bell: Are we headed toward a new Cold War with China – or is it a kind of made up threat?
John Browne: Some of these threats are made up in order to keep dominating people. But I just don't know the answer to those two questions so China is a big question mark.
Daily Bell: How can the West recover from its current predicament? What needs to be done?
John Browne: We need to somehow get back to reality and the awful thing is, especially as my grandfather was killed in the war and my father served in the war, if you want reality you would hope that the Germans would win over the Anglo-Americans because they'll give us reality. They'll repair Europe. That's why I mentioned the trade as being short the yen and long the euro. And it may even start to invigorate America with new feeling because a lot of Germanic people in America, and possibly members of the Tea Party, probably work hard, they've got savings in the bank and they don't want to go around salvaging all of these layabouts. So I'm just guessing but I would think if Germany wins in Europe it won't be long before she starts paying her influence around the world. It will be a jolly hard road. It's like suddenly a new coach comes in and takes over the football team. The more sugar and milk and the fatter you are as a member of the team, the harder it's going to be to get fit. But by the time we've been through the mill under the Germans we'll be a fit team.
Daily Bell: Will Carney, the new Bank of England central banker, be able to restart the economy or will he merely be another disappointment?
John Browne: The problem is he's joined the Bank with a briefing, in my view, being told he must now make the Bank of England like the Federal Reserve Board and like the Bank of Japan. The Bank of Japan has followed their instruction and is now completely inflating Japan. In the Bank of England, Mervyn King was considered too stodgy and old-fashioned so they've got an import in there. The big question is, though, that Britain seems to be on the cusp of going into the financial centers of Europe and once it does it will be under the influence of the European Central Bank, which is run by the Germans. And therefore, the Bank of England will be the very much junior partner and may be forced to become more Germanic, which would be great for all the people of Europe and Britain and not for the people of America. He's in there to do a job of inflation, to do a Bernanke job on England, but he may be neutered by the European Union and the domination of Germany.
Daily Bell: Is it possible he will begin to stimulate the way the Bank of Japan is starting to stimulate? Will that work?
John Browne: I think that's what he wants to do, yes. Will it work? Of course it will work. It's like heroin. It works. It makes you feel great but meanwhile, your estate's disintegrating.
Daily Bell: Does Keynesianism ever work?
John Browne: Yes, of course. Keynesianism works a dream. It's like asking me if heroin works. I've seen it on soldiers in the army. They get badly wounded, you give them a shot of morphine and, my God, they feel great! They don't feel any pain. But the great problem is that you can't live on morphine. So if you have a country with very little debt and industry has been laggardly and you start investing money into industry and all that sort of stuff it picks the economy up and creates velocity of circulation and people start making money and it can be a great thing. But when you've got a country that's awash with debt, has industry idle because nobody wants to work and a social security system that encourages people not to work, the more money you put into it the worse it gets. So it's the difference between injecting a soldier with morphine who's had his arms blown off versus some slob who just doesn't want to work and wants to just sit around and you give him the morphine so he can sit watching the television and drinking beer. And that's what we're doing. So Keynesianism in a Western country that's awash with debt is a certain economic death.
Daily Bell: Including for Japan…
John Browne: Yes. That's why I say I feel so sorry for the Japanese. I know Japan quite well and these Japanese work. They work hard, they save and nearly all the debt that Japan has run up is owned by the Japanese. They're not owned by foreigners. Look what happened to them with the tsunami disaster and that nuclear disaster they had. They didn't start robbing shops; they didn't start looting people in the shelters. They all behaved, they helped each other. They were fantastic. It shocked the world how well-behaved they were. And these people are going to be totally impoverished by their government. I feel really sorry for them because I think the long-term price of the yen is worth less. This man has just obeyed Bernanke and the Western world and is impoverishing Japan. These are just like the Germans, people who've worked very hard all their lives, saved money, put it in the bank, trusted their government by buying government bonds and then the government's completely ratted on them. It's tragic, absolutely tragic. I feel really sorry for the Japanese because they've taken it right on the chin. They were defeated in the war and like the Germans, they came back and made themselves a great country with great industry. They build the most popular cars in the world and things like that. I feel so sorry for them because their bank is going to impoverish them.
Daily Bell: Where does the West go from here and will freedom begin to creep into the conversation at some point?
John Browne: Creep is the real word. Freedom will creep into the language and then it will start taking off more and more but the problem comes, once you've given up a certain number of freedoms you can never get them back. We fought for the freedoms we enjoy now. In Britain we fought tooth and nail, people were burned at the stake, grotesque deaths and everything, we had a civil war. America had a War of Independence. We fought for the freedoms we have with blood and we've just given them up. And to get them back it's going to be more blood.
The question is whether it's going to be fighting our own elite or whether it's going to be fighting someone else's. The elites want control and we've given up our freedoms. It's just incredible. All under the guise of protecting yourself, the Patriot Act and all that. It was under the guise of protecting us but, in fact, all it's done is taken away our individual rights, our individual freedoms that we've fought for centuries for. The government can keep saying that it won't drone individual Americans without a trial but that this Congress can pass a bill which enables the government to put people in jail without a charge, without a court hearing in America, is just staggering to me. All these things used to go on in medieval times and before. In Norman, England people were put in jail without charge and we fought for all these things so that our citizens could have a fair trial, a jury, etc. All fought for in blood and suffering and now we've just given it away.
Daily Bell: Will Austrian economics ever be formally endorsed?
John Browne: Yes. I think the Germans are very much on board. This is the big battle between Germany and the Anglo-Saxon world, between Austrian economics and Keynesianism. And it depends who wins. The Germans are definitely on the Austrian tack and if they win – they're stacked up against Britain and America who've got no money. They've just got borrowed debt whereas Germany's actually got money – and they've got the will. We've lost the will and we've lost our bank accounts. The two richest countries the world has ever known were Britain and America and you think how fast it can go. In 1902, Argentina was challenging Britain as the second largest economy in the world. Today, you hardly hear of Argentina; it's gone. If we continue on this wrong track people will look back and say, "My god, can you imagine that Britain and America were two of the richest countries in the world and they're now servants to everybody?"
Daily Bell: Is fiat money ultimately a doomed system? Will the world return to a gold standard?
John Browne: Politicians can't resist corruption and so normally fiat currencies die and people revert to precious metals. And so I think the net result is that we may end up with a very, very strong euro, which will become the equivalent of a gold system because it will be real money. But if both the euro and the dollar go down the tubes we'll probably go to a gold standard of some sort – in other words, a gold-linked standard, not necessarily a full bullion standard but a paper currency that's linked to gold, that's convertible into gold. I think that's the way we're heading and I think that's the way all the countries that are rich want to do it to protect their money. I think it's the way the Chinese and Russians and even some of our own camp like Australia, New Zealand and Canada, which are resource rich, want to go because they're giving up all this stuff out of the ground, which is theirs, and they're getting pieces of paper in lieu, which are all depreciating. So why wouldn't they want some piece of paper and say to the Americans, "Okay, we'll take x billion of your money but we want it convertible into gold"? I think that's the way it's going to go. Probably not a full bullion standard but a gold-linked standard similar to the one we had before 1971.
Daily Bell: What would you invest in today?
John Browne: I have a core investment of precious metals, 75% gold, 25% silver. I have stocks, I have ETFs in the market, unfortunately because I'm not that enthusiastic – but I have stocks because if the dance band is playing and it's free, why not go to the dance? You might pick up a girl there. It's just great because Bernanke's fueling this market, the rest of the world – Japan, everyone – is flooding in saying 'America's the only safe place so buy dollars and we'll guarantee American stocks and bond markets.' So if they want to do it, why fight them? You go in for the ride but you know that when it turns you want to be right out fast.
So I keep my insurance policy in precious metals and my speculative investment is now in the stock market and the bond markets because they continue to go up. But one knows one's skating on thin ice so the moment you see someone in trouble you get the hell off the ice because you'll be down there with him and frozen. And when it happens – it's like pushing a glass toward the end of the table. When it goes, it goes suddenly, and it doesn't glide down; it just drops like a stone. And I think these markets are going to drop thousands of points a day when they eventually go and markets will be closed so there's no use saying, "Oh, I'll get out. I'll sell because I've got a very liquid stock." You've got to get out before the trouble starts because when the trouble starts I think you'll see markets close and you'll see long bank holidays, a month or something like that. By the time the markets closed for a month, heaven knows what happens to the price when it opens. If you've got a stop at $100 a share and suddenly it opens a month later at $5 a share you've lost a lot of money.
Daily Bell: Are gold and silver still good investments?
John Browne: Yes, I think so, as an insurance policy and then eventually they'll become good investments as profit when they bottom out, when people begin to realize the problem. It's sort of being covered up at the moment with the heroin. When people start running out of heroin and drugs they'll realize that they're good investments. Having precious metals is like having a gun in a shelter full of drug addicts; it's good insurance.
Daily Bell: Should one invest in the BRICS?
John Browne: Yes, I think so, so long as this big boom carries and we keep inflating and things like that. They're producing a lot of the raw materials that are needed for the boom but, again, one wants to be careful because when the downturn comes it could be a mammoth crash and then the prices in the BRICs will be seen to be grossly inflated. So it's rather like one investing in the New York Stock Exchange and all that, Dow and S&P – one invests in it as a speculation because one knows it's unreal but as long as everyone else keeps buying, the prices are going to go up. Even though you may think it's wrong, the prices keep going up. Why not go along for the ride? As long as you realize that this horse is dangerous.
Daily Bell: Any other points you want to make in these challenging times?
John Browne: No, except I love reading The Bell. It's great stuff, really great stuff. I just feel it's one of those outlets that breaks through the grasp of our news that is held in a tight grip by the mainline media and it's terrific.
Daily Bell: Thank you! And thanks for your time.
This is a great interview with John Browne, who has a wonderful understanding about Europe and how Britain fits into the larger scheme of the ongoing globalism that is taking place on the continent.
If we had any quibbles with his analysis, it would be over Germany's role in Europe and the defining elements of German's "elites" versus the larger German population.
We just cannot fully accommodate the idea that the German elite operates extraneously of its British and US counterparts. We notice that Browne's analysis of Europe includes the idea that British globalists have had second thoughts about the European experiment, but given David Cameron's reluctance to hold a referendum on the matter, this would seem perhaps to be a questionable speculation.
If those running London's financial center wanted to depart from the EU, that move would have taken place already. That Cameron has not generated a referendum on the subject is good evidence that the globalists running the City have no intention of changing things.
Instead, what Browne tells us is that the City's influence is spreading to the Middle East and beyond, perhaps to Asia. Listen closely to what Browne is saying: The Germans are supposedly left with Europe (we think it is merely proxy control); the City is everywhere else.
If you come away with no other insight, this one – if it is true – is worth the price of admission. It fits into our larger paradigm, as well. We have written in the past how Islam is being monetized in Dubai and the Arab Emirates.
Is a new hybrid system of finance emerging that may sweep the world? Feasibly, it is not the Germans that will drive this sort of global high finance but the City of London and to a lesser degree Wall Street.
We would not be surprised by this sort of evolution. To follow what is hidden beneath elite dominant social themes, you have to scrutinize the reality, not just what is being reported in the mainstream media.
While all eyes are focused on Europe, Anglo-American finance is apparently moving far beyond its shores. Once again, German elites are being positioned as Europe's Dark Hats. In this modern era, it seems history often repeats.