Anglo-Saxons have a much shorter and more expressive exclamation than the one we use in Spanish to say that you have to see what things change in a year !: “what a difference a year makes!”.
What they change… and how little they change at the same time!
Last year at this time we were commenting that in Hong Kong tourism had collapsed due to the extreme tensions to which the umbrella revolution, to the point that sI could get a hotel room for just six euros a day.
A year later that revolution is already extinct, although you can still get a hotel room for eleven euros a night. Why, Who wants to go to Hong Kong these days, go through the horca Forks of the PCR test at the airport (with its corresponding 12-hour wait, after an 18-hour flight) and the subsequent 14-day quarantine? It is not surprising that its GDP fell by 9.1% annually in the first quarter of 2020 and also by 9% in the second, although in the third the fall had already eased (-3.5%).
Just a year ago half the world was in an uproar and the other half stunned by the rise in mortal flesh to the altars of Greta Thunberg leading a self-proclaimed mass movement Extinction Rebellion, or rebellion against the extinction that would cause global warming.
Today, with a million and a half victims extinguished by Covid-19, that rebellion against extinction seems to be a macabre foretaste of the extinction that was already beginning in China. Things have changed a lot, but the threat of extinction has manifested itself more acutely than the prophetess calculated or intuited.
In November 2019 the whole world exhaled sigh of relief why rThe United Kingdom and the European Union had finally reached an Agreement to carry out the decision reached in a referendum and known as ‘Brexit’. It seemed like a huge change, after three and a half agonizing years in British politics, with two elections to Parliament included and a country divided even in the way it said good morning.
Well, a year later everything has changed again, to return to the starting point: Boris Johnson has decided to back down on key aspects of the Agreement and, just five weeks before the deadline for the UK’s disorderly departure from the European Union, has decided to fire his ideologue of ‘brexit’ and no one, not even himself, knows what he wants (at least, that’s what even his closest friends think).
The pandemic and the theatrical twists and turns of the script have made even London’s forex traders decide to throw in the towel and do not dare to take positions for or against the price of the pound sterling, after having his fingers caught in her for those unexpected turns.
However, despite how complicated the negotiation is, and already in cut-off time for ‘Brexit’, there is something that seems clear: the secular decline of the British pound that began 100 years ago (when the pound was trading at 4.88 dollars in the exchange markets) will continue. Against the euro it is difficult for it to fall below parity (one pound equivalent to one euro) although a chaotic exit from the European Union makes even that possible.
The catastrophic changes that have occurred in the last twelve months, however, were announced not only by the prophets of the caloric apocalypse but by something much more municipal and thick as is the activity of the creators of money, the central banks. In the case of the Federal Reserve, this activity was caused by something very disturbing and, therefore, almost premonitory, such as the need to inject huge amounts of funds into the US money markets (technically in the ‘repo’ market, where US public debt is sold at very short terms and with a repurchase agreement).
The need manifested itself in a very virulent way in the month of September 2019 and had an element of intrigue at the height of the best detective novel, and that is that nobody understood what was happening. A money market as important as that of the ‘repos’ had stopped working normally and no one, inside or outside the Federal Reserve, understood why.
The European Central Bank had to initiate a looser monetary policy also just a month later and all this, seen from now on, seemed like the dress rehearsal of what all central banks were going to have to do, under much more dramatic conditions, in March 2020, with financial markets in convulsions from the pandemic.
Twelve more months and everything has radically changed in those marketsAt the same time, everything remains the same in them: they continue to need the enormous liquidity that central banks provide them and without any expectation that, in the short term, they will be able to do without it.
In November 2019, Greece was still seen as that wasteland that Varoufakis had left behind, suffocated by the enormous public debt accumulated by the governments before him, with the invaluable help of the American business banks and the German commercial banks, and pressured by the massive arrival of immigrants through Turkey, in addition to being threatened militarily by it.
It seems astonishing that 200 years after Lord Byron went around firing his shotguns in the war to liberate Greece from the Ottoman Empire, military tensions between two NATO partners continue to stiffen at different times throughout the 20th century. a take me there those straws in Cyprus. As if we were on the eve of another Lepanto.
By the way, tomorrow, November 24, it will be 451 years since the departure from the Port of Messina of a Spanish ship loaded with explosives and with 50,000 escudos in merchandise with which to hide them. It was the grace year of 1569 and the goal was to blow up the Istanbul arsenal. The company failed. It was only two years until the Battle of Lepanto. The most funny thing about that story full of bizarre elements was the name of the ship: El Cuñado. You can see that the brothers-in-law did not have such a bad press then as they do now!
Continuing… However, and despite enormous geopolitical and financial difficulties, Today Greece does not stop, while here we are in Babia. Not satisfied with the previous tax advantages that it has been granting to those who are domiciled to telework or enjoy their retirement pension from there, now it also tries to attract itself to the world of cinema, television and video games, with a program of aid for value of 75 million euros, mix of subsidies and tax breaks.
Also a year ago, the Community of Madrid had just begun to be presided over by an unknown and, for many, bizarre Isabel Díaz Ayuso who, last month, was about to be politically evicted by both the central government (PSOE) and her own party (PP) and by his coalition Citizens, in the midst of the mistakes he had made during the summer, letting the Covid-19 get out of hand in Madrid.
Six weeks later Madrid is an island, together with the Balearic and Canary Islands, where the incidence of Covid-19 is among the lowest in all of Spain, which has caused that to date a good part of the measures that she had been applying, or demanding, in the fall have begun to seem reasonable to the central government, and, even, to be imitated by other regional governments.
So, in practice, she no longer only appears to be the true leader of the opposition, but she also seems to be dictating health policy for the entire country: selective closures of businesses already approved in Catalonia; requirement of PCRs in airports, as in Hong Kong and half the world, etc.
What strange things are seen in the dark!, Rosalía de Castro would have exclaimed. The virtual leader of the opposition, and member of the PP, in a position of minister of health, also virtual and outside the walls, of a government of the PSOE!
What things change in a year. What things change in a month.