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David Kempton: my share tips for 2012

There are plenty of quality stocks out there – you just have to know where to look, says David Kempton.

David Kempton: my share tips for 2012

As the eurozone sovereign debt crisis rumbles on with no resolution in sight, David Kempton shares his essential share picks for 2012.

The backdrop: Europe in crisis

As I write this the UK press seems more concerned with Sarkozy’s rebuff of the proffered Cameron handshake than the European crisis that still looms. A bad mistake by the French premier, who seemingly forgot that France exports more to us than we export to them: they need us more than we need them. 

The British parliament is able to make and implement tough decisions faster than any other in Europe, our bank is still able to buy cheap debt, and our exchange rate can be adjusted to suit our own circumstances.   

I have strong views on European economics, but I shall leave that to others and focus on where to invest in 2012.

Where to invest

We must remember that Europe’s population is only 730 million, while the rest of the world is 7 billion. Those 7 billion are mostly younger too, since our demographics are unhelpful, so our young workers are burdened with supporting more aging people.  

The UK's outlook for 2012 looks dreadful, with unemployment rising, government tax take declining, reduced consumer spending, and houses simply unsellable in many provincial regions. I expect riots in the streets of some industrial cities this winter.

So, where to invest? The US has better demographics and a young, entrepreneurial population working in a more favourable financial climate that positively encourages risk and achievement. Couple that with recent better statistics and the US looks the best of the developed world. 

The developing world has obviously slowed as a result of European issues, but it'll recover quickly and increasingly trade internally as countries become wealthier. So buy international quality stocks, preferably with some yield, and hold your nerve through the bumpy times ahead. 

International big hitters

I have written on international big hitters before, but would draw your attention again to Fenner (FENR.L). I retain mine since it remains in a growth phase and could be bought at any time,  as could GKN (GKN.L) and Rolls Royce (RR.L).

I remain convinced that we will see the same happen in our engineers and aero industries as we have seen in our (booming) motor industry, which is now almost entirely Japanese, Indian, Arab, Malaysian and Chinese. Then there is Germany with our Bentley and Rolls Royce brands.

If you cannot stomach the wild volatility that will surely ensue in that sector, buy a good, cautiously managed fund. There will be so many events violently affecting markets next year that it will be impossible to run your own cautious money. You will need to watch a screen 24/7, so leave that to a skilled professional. 

Gilts will crash

The star of 2011 has been gilts, which appreciated 20%. They will surely be the dog of 2012, and any threatened increase in interest rates would see values plummet from here. Be afraid, and leave a pro to watch that move for you since it will happen very fast. 

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35 comments so far. Why not have your say?


Dec 14, 2011 at 11:26

Thanks David,

I also own BG, RR, PFC for similar reasons. I am considering an investment in Dragon Oil too but notice you prefer Premier & Tullow instead. Any thoughts on Dragon vis-a-vis the 2 you mention in your article?

Re: Wildhorse Energy - if you write the uranium assets down to zero (worst case scenario) what valuation do you get to then?

I am not as convinced as you that Gilts will crash due to your assumption that base rate will go higher. Why will that happen? Inflation is set to fall off a cliff next year, y-o-y, which will give the BoE more breathing space to maintain rates at current levels for longer. If they have maintained rates at 0.5% when CPI was around 5% this year, what makes you think that base rates will rise in 2012 when CPI falls substantially? Economic growth will not pressurise the BoE to do so, so what am I missing?

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Old Skool

Dec 14, 2011 at 13:00

Small point - I think in the second paragraph you meant to say "SELL" cheap debt rather than buy - i.e. the Bank Of England is able to sell gilts (i.e. borrow money) at historically low interest rates, unlike for example - the Italians.

Sorry to be a pedent - but I think some my be confused by it

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Dec 14, 2011 at 13:09

Concerning Wildhorse Energy.

I keep on reading about minor earthquakes that are thought to be the result of UCG


If this link is somehow proved, please is there anything in particular that is unique to the Wildhorse process that minimises such events.

For an 'oilie' I much prefer Black Pearl (PXX, Canada) to all the old chestnuts that you, quite reasonably, mention.

I am a long term holder and am very happy to continue to be so in a decent jurisdiction, with a good management and plenty of potential upside.

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Old Skool

Dec 14, 2011 at 13:14

Another small point - my understanding was that Rolls Royce (RR.) as a defence sensitive stock, could / would be blocked from being taken over by a foreign company by the Govt / take over panel. If so, this would seem to limit the scope for takeover. Apologies if I am mistaken.

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William Phillips

Dec 14, 2011 at 13:14

"The US has better demographics and a young, entrepreneurial population working in a more favourable financial climate that positively encourages risk and achievement. Couple that with recent better statistics and the US looks the best of the developed world."

This is typical of the idolatrous attitude still prevalent among those who think of themselves as hardnosed capitalists. It has been increasingly at odds with US realities since Roosevelt fooled it into war in 1941 and consolidated his un-American statist control of the economy in the interests of bankers and warmongering industries.

In reality, as the Tea Party revolt of the oppressed white middle class warns, the USA is a socialist-tending warfare/welfare state. it is locked into a declining spiral of militaristic and futile adventures abroad at the behest of arms-makers, globalist financiers and lobbyists for foreign countries who do not have America's national interest at heart.

Meanwhile the homeland is flooded by immigrants such as Spanish-speaking Mexicans whose utility in a post-industrial economy is doubtful, and whose willingness to work, save and care for their own wellbeing and families is becoming as iffy as those of African-Americans since the civil rights era of quotas, entitlements and Democratic reliance on the black vote kicked in.

The USA's so-called superior demographics consists of population growth among these groups, imposing an ever-rising burden of welfare on the shoulders of whites (who will be a minority before 2050), Jews and Asiatics. Efforts to prune back the state's share of national output are unavailing because the fertility of the less able elements of the population is creating ghettoes which extend beyond the Detroits and southern LAs into whole counties, soon whole states.

The USA is racially polarising. The reality behind the rhetoric of multicult is a fractious, internally divided society. The have-nots have found the political leverage to dispossess the haves, who are retreating into their own 'white flight' regions (esp. the North West) and electronically guarded ghettoes. Officially the races mix peacefully in the public square and at work. In truth they buy houses, worship, are schooled and vacation largely separately, and there is little sign that those barriers are breaking down.

Absent the only thing that could unify this Babel-- a credible external threat, and 'Islamofascist terror' sure ain't it-- the USA will probably fall apart like its terrible twin, the USSR. Its diminished expectations have cranked up the tensions which could be smothered during the Clinton years of good feelings and the enforced post-9/11 unity of Bush Jr. Much of the vaunted black middle class is a Potemkin village of soft government jobs and favouritism, which in hard times is costly to keep going. Meanwhile the USA's chief commercial rival owns an uncomfortably large portion of the debt which props up Obama's maintenance of a welfare state at home and crazy crusades abroad.

Federal politics, with its phoney choice of two big parties that act alike in all essentials, turns off the struggling, overtaxed middle class and ignores its protestations. It is glaringly obvious by now that Washington belongs to the super-rich, with concessions to the noisier 'victim' whiners, and that those who sustain the double injustice will never be relieved unless they revolt. Will Atlas ever shrug, or will the enterprise Mr Kempton commends suffer death by a thousand compulsory tightenings of their belts?

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Dec 14, 2011 at 14:21

Mr. Phillips,

If your apocalyptic musings are half correct then the one logical move for US citizens would be to buy second homes with a long term view of setting up businesses across the border, this before Canadian real estate prices start going through the roof.

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Mike S

Dec 14, 2011 at 15:44

Mr Kempton says Kingrose operates in a "politically stable environment (Indonesia)". Who is he trying to kid (rhetorical - he's talking his own book up).


and then take note of what happened to Churchill Mining, another miner (albeit Coal) in Indonesia whose licences were cancelled by the local 'Bhutan' (regional official) - after the coal was discovered - so that a local company (politically connected) could be granted a licence.

Avoid Indonesia I suggest.

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Dec 14, 2011 at 17:15

Well William Phillips!

For some while I have felt the same as you, but lack your decisive insight, grasp, and ability to put it into words.

Thing is , I believe this scenario is being played out as we speak, in the UK, but more so in England, where 99% of those who's first language is not English are currently located.

Trouble is we voters have very little chance of doing anything about it. Does anyone out there reading this have anything to add to this nacent debate?

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Dec 14, 2011 at 18:21

What a load of bigoted racist clap-trap in some of the posts above. The problem in the UK is that many well-educated indigenous people here are work-shy compared to the hard-working excellent graduates we produce from overseas countries. One of our biggest mistakes in economic terms was to not grant normal entry to the "British" passport holders from Hong Kong, when China effectively took over this old British colony. One cannot generalise, but on average these guys were some of the World's best and hardest working business people, who would have re-vitalised our economy at that time. Just see how the very few Kenyan Asians we let in worked so hard setting up small businesses. Instead we are run by managers and bankers, etc who want a fast buck, large bonuses, long business lunches and to knock off early to play golf.

There are a few good business and a few great entrepreneurs from our own native population, but to lose all these other people was a tragedy.

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Dec 14, 2011 at 18:49


Thank you.

You are of course right.

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Barrie Davies

Dec 14, 2011 at 19:41

Is Mr.Phillips a democrat or rebuplican? Hard to tell from that!!!!

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William Phillips

Dec 14, 2011 at 23:51

Neither, since (a) I am not an American, thank God, and (b) if I were, I hope I would have the horse sense to realise that national partisanship in politics is a charade, and that the same globalist money power jerks the strings of both parties-- while using the controlled media to marginalise critics such as Ron Paul and Ralph Nader.

Increasingly Americans describe themselves as independents, while participation in national and state elections is falling below British rates. US democracy is in a pretty poor way, the counterpart of the grossly skewed income distribution and decline in social mobility since c. 1960 (the dawn of the warfare/welfare age of 'civil rights') which Mr Kempton fails to see in his paeans to American entrepreneurship.

Basically, Americans are ceasing to believe their voice will be heard unless they can claim group victimhood or can agitate behind the scenes, greasing palms. The plutocracy has become openly rapacious and arrogant-- not one criminal prosecution from the housing and banking collapses, for instance, just billions of taxpayers' money to rescue the racket.

Brits have little idea how pervasive the Federal government has become in propping up the economies not only of minority ghettoes and barrios but great white swathes west of the Missouri/Mississippi which depend on 'defense' spending. The imperialist hegemon that cannot admit it is running an empire spends half the world's bill for war kit with 5% of its population, and has 'defense' establishments in over 150 of the planet's 200-odd sovereignties, including several that are richer per-capita than the USA itself. Barmy, and totally at odds with the Founding Fathers' belief in non-intervention.

Brits also do not understand how poorly and close to the edge many millions of Americans live by European standards: short holidays, little trade-union security, for ever in debt, stuck with unsellable property, seeing their masters exporting ordinary jobs to lower-cost foreign countries, expecting (for the first time, according to polls) that their children will have it tougher than they did. They are badly schooled and very unhealthy. This is another cruel reality behind Mr Kempton's idea of the confident, happy New World.

It may seem incredible to Europeans who have grown up under the USA's shadow since 1945-- its international supremacy was an accidental consequence of other powers fighting each other to standstill-- that it should fall to pieces. But why? The republic of 1776 committed suicide in the war between the states from 1860 to 1865: a war unimaginable ten years earlier. More Americans killed one another than had died in any previous war anywhere.

I don't see that happening again; much likelier is a gradual dissolution of the anti-constitutional centralised state and its replacement by a looser confederation, or several, of groupings of states stratified broadly on ethnic lines: e.g. the South, mainly black, the white-majority North East, Mid West and Pacific North West (which may hook up with the western part of Canada), and the La Raza Spanish-speaking south west. (There is already a secessionist movement in northern California and one for uniting with Canada in Vermont, btw.)

There is no reason why a country that will have to give up its fantasies of global domination soon should stick together in its present shape. Other anachronistic comglomerations such as the USSR, Yugoslavia and Czecho-Slovakia have unravelled, and the UK may yet do so. The EU's days are evidently numbered too. The common theme in this proliferation of new countries is that they are organised on ethnic lines-- the political equivalent of speciation in the natural world. The USA's compulsory multiracialism, a form of empire, is outdated.

The only thing that can hold the hotchpotch together is a deliberately fomented fear of the furrin bogeyman: once it was the British redcoats, then the Japs, then the Reds, then (briefly) the Chinese yellow peril, and now it's Abdul and his airplane bombs. But the fiascos of Iraq and Afghanistan have left hard-pressed Americans in a mood of scepticism about external threats. They are beginning to see that the biggest danger to their freedom and prosperity is from their own faceless masters.

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Dec 17, 2011 at 06:31

Congratulations William Phillips - 2 brilliant posts putting into lucid prose the opinions of many many people who can see things as they are and do not blindly accept the lies and propaganda spoon fed to us by the politicians and most of the media. Great to see it put into print - a tour de force of the reality of the current grim state of 'the West'. WELL DONE SIR!

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Edward A Evans

Dec 17, 2011 at 09:13

In addition Mr Sarkosy and other members of his cabinet are actively promoting "Buy Made in France" in the press and on television and in english. You know France is in trouble when its promoting anything in the english language. Should not the UK population be "Buying Made in Britain. It woud be the quickest way to reduce the deficit and debt.

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Keith Snell

Dec 17, 2011 at 09:32

Thank you David for a good article, a pity about those who believe having a rant about anything but investment waste both their own and everyone elses time so much.

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Dec 17, 2011 at 10:43

Well, Edward, that sounds fine and dandy but just what is 'Made in Britain' these days? Not too much unless you want a new Toyota or Nissan Micra. The Thatcher years put paid to most of our viable industry and subsequent governments of both hues have just continued the process.

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Graham D-C

Dec 17, 2011 at 11:23


"The Thatcher years put paid to most of our viable industries",. Which were?

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Anonymous 1 needed this 'off the record'

Dec 17, 2011 at 12:32

We would buy British if was made easy to tell what was made in england. I wanted to buy a combi boiler and could not find a single energy site saying made in england. Just because it has been made in england does not mean it is worth buying

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kathleen wood

Dec 17, 2011 at 14:07

We ignore William Phillips at our peril!

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dr ray

Dec 17, 2011 at 15:36

@William Phillips

A very well written post.

Surprising how many people are willing to argue in support of what they are told in the mainstream media based on what they have learnt in the mainstream media. Also surprising they have not been on here in larger numbers trying to ridicule Mr Phillips. I think this shows how well written and self evidently true is his post.

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No name 2

Dec 17, 2011 at 22:32

William Phillips' piece is a stimulating and thought provoking read but somewhat unbalanced. And can we please stop blaming Mrs Thatcher for the demise of British manufacturing - just have a look at the evidence of the 1970's, and of the Labour administration post-Thatcher!!!


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Dec 17, 2011 at 22:47

I agree with dr ray. I don't believe William Phillips' postings are unbalanced at all.

Too many people allow the manipulative media to do their thinking for them and seem to lack the ability to examine ALL the available facts and make up their own minds - here the internet and truly independent and balanced media like Aljazeera come into their own, and issues can be examined at length. The information is all out there if only people would be more critical and not automatically believe TV sound bites that are often biassed and pushing an official agenda.

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William Phillips

Dec 17, 2011 at 23:10

I'm surprised too;-)

But this splendid tool by which we are exchanging insights is, until the censors find a way of castrating it, a great subverter of pre-processed conventional wisdom. That wisdom no longer computes. Accordingly readership of newspapers and audiences for news programmes which set the agenda and try to limit what qualifies as 'moderate' viewpoints are rapidly dwindling.

It takes a recession and repeated failure to win wars to get the 10% of the populace that bothers about the republic's future at all to start ruminating outside the box-- but they sure are cogitating now. The evidence of the USA's multiple systemic failures at home and abroad, and its headlong career further down the cul de sac, is awakening many; not least because their own living standards have gone into reverse, despite the gruelling effort they put in.

Look, I realise my perspective may seem too distant and abstract for a comment on a piece about where to stick your money, but if (like me) you live off your investments and are not a speculator, you have to take a long view of where to park your savings.

Mr Kempton's optimism about the States-- though possibly justifiable for a player of turns and cycles, for now-- seems to me to be cock-eyed in its optimism. Things could deteriorate faster over the pond than many recognise-- just as the Soviet regime crumbled far sooner than the Kremlinolgists predicted and China went capitalist far more quickly.

America's situation today is strikingly like the overstretch which felled Rome. Too many far-off commitments, a quietly despondent home population placated with bread and circuses (think Medicare and reality TV), barbarians knocking at the gate (i.e. swimming across the Rio Grande), a ruling elite distancing itself from the ruled and losing faith in its own gods (vide the 'New Atheism' among the liberal intelligentsia), a social atmosphere celebrating instant gratification, perversity and self-destructive behaviour... Edward Gibbon would have loved to get to grips with it.

As empires go, the USA's has lasted rather a short time. As late as Pearl Harbor, most Americans wanted to stay out of the European war and the country had a smaller standing army than Portugal. All that has happened since then, up to Star Wars and drone strikes, has been in a sense accidental-- someone had to fill the vacuum of exhaustion in 1945-- but the deformation of what was naturally a pacific, insular country was egged on by the military-industrial complex:

It argued that preparing for war stimulated economic growth and technological innovation. During the Cold War this seemed to work. But warfare/welfare slowly inculcates a slave mentality among the citizens and runs up obligations and debts that are hard to unwind.. which is why the USA still has to guard Germany and South Korea, and why a so-called North Atlantic Treaty Organisation is fooling around in the Middle East.

The quasi-imperial hegemony began to quiver as early as the early 1970s, when Nixon took the dollar off gold, appeased China and began the staged capitulation in South Vietnam. But America's further slide into inanition in the last quarter of the 20th century was masked by the spectacle of worse collapses acoss the Atlantic as communism's rival empire dissolved, and over the Pacific where Japan (once feared as the USA's supplanter in the race to be the most modern and efficient state) sank into stagnation. Relatively speaking the USA seemed on top still.

So it had a stay of execution between the falls of the Berlin Wall and the Twin Towers, but it did not use it to renovate its economy and make its people face up to the Asian challenge. Instead, esp. under Clinton, it luxuriated in a credit-fuelled property boom, a further extension of welfare and a tireless creation of fiat money to finance these indulgences, while permitting immigration that tilted its ethnic balance away from the white, western and Christian norms which had created the republic and closed the frontier. 'Do your own thing', 'tolerate anything but intolerance', 'diversity is our greatest strength' etc are no substitutes as cement for civil society,

The people had another chance to face reality with 9/11. Instead they retreated into the victim pose, claiming that the whole world hated them because it envied them but could not emulate them: the most potent and self-injuring delusion Americans labour under. Pres. Bush told them it should be business as usual, that the wars to put down 'Islamofascism' would be self-financing and swiftly won. Americans sighed with relief and settled down to watch 'Sex in the City' instead of 'Seinfeld'.

Denial did not diminish after 9/11, it became a patriotic duty. Even the financial crisis of 2007 was spun to them as an affair of a few rogue bankers rather than the nemesis of a whole society living a fantasy of eternally rising, unearned prosperity on tick.

Now the bill must be paid, expressed in dollars they don't have, and the pain and shock this will cause throughout the land will demoralise Americans. There will be recriminations, setting them at each others' throats. The Globocop swagger will be mocked: already half of registered Republicans, supposedly the hawkish party, tell pollsters that Iraq was not worth 4,500 dead. Imagine if any government tried to reinstate the draft, alleged threats to the 'homeland' from Afghanistan or Iran notwithstanding. Nobody wants their boy to die for 'freedom' and 'democracy'. They are beginning to understand that the USA's salvation lies in trading with the world, not invading and preaching at it.

The only candidate in the election saying all this is Ron Paul, so the Lamestream Media does its best to ignore him. It would never do if the inchoate reversion of ordinary citizens to the pilgrim/pioneer spirit of non-intervention should be fanned by a presidential aspirant. There is far too much at stake for globalist big business and its media mouthpieces. If the citizenry adopts a quieter, less greedy, more provident and self-reliant way of life and insists that its rulers become more financially responsible and less belligerent to match it, how on earth can purveyors of debt, dreams and death make a dishonest living?

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Dec 18, 2011 at 04:45

I agree about Ron Paul - by far the most suitable candidate to be the next US president. A sensible and pragmatic politician and one of the few US pols who spoke out against the invasion of Iraq on trumped up excuses - non existent WMDs, yellow cake for nuclear weapons (a ridiculous lie supplied by our late unlamented PM and Bush boot licker Blair), etc etc.

He was also the only one of the contenders for the Republican nomination to speak out against America's uncritical and costly support for the vicious right wing regime in Israel. The others quickly attacked him to show the extremely powerful Jewish lobby in the US how pro-Israel they were.

If Paul looks like winning the nomination, the immense financial power of the Jewish lobby will be turned on him, demonising him as an enemy of Israel.

'The Jewish tail wags the US political dog' so to speak.

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Graham D-C

Dec 18, 2011 at 10:51

Of all the U.S. presidents in recent years who have inherited difficult political and financial legacies,Obama wins that dubious award hands down. From what I have seen of current hopefuls, none come even close to matching Obama's clean hands, personal qualities and statesmanship. Americans have twice previously elected the most stupid of politicians to be their president and I cannot believe they are about to make that mistake again.

Whatever, the views are of Israel, it is America's only ally in the Middle East, whch holds America's industrial lifeblood.. The Palestinians had the best deal they woud ever get offered to them (by PM Ehud Barak?) at Camp David , which, Arafat who was never his own man, turned down. What did Arafat do with the hundreds of millions of dollars given by the U.S. and E.U. ? It certainly was not used to the benefit of the stateless Arabs living in squalor in refugees camps. If the Palestinians want to elect a terrorist organisation to lead them , one sworn to see the downfall of Israel and never to allow a Jew to live in a Palestinian state, then so be it, but not at the expense of American and Israeli lives.

If Iran does announce to the world that it has a nuclear weapon , we could subsequently witness America's last war, one that will define the future of the world for generation's to come. It will not be a land war and will be decided by America's vastly superior military technology.aided and abetted by Israel.

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William Phillips

Dec 18, 2011 at 12:21

US intelligence professionals still state unanimously that their best evidence is that Iran does not possess the desire or means to equip itself with nukes; but what do they know compared with neocon columnists, Fox News and think tanks financed by the armaments industry?

And of course Iran has several hundred years of not starting wars behind it, but what use is a knowledge of history compared with the drumbeat for armaments and confrontation maintained by those who need a bogeyman to unite the otherwise disunited American people? Iran, with its internal anarchy, primitive army and air defences and wistful dreams of having some of its power generated by nuclear, is a pretty feeble bogeyman compared with Hitler or Hirohito or Stalin, or even Fidel-- but who else is there?

The neocons have realised that it's hard to make this scare fly, so some have moved on to warning that China-- another country with a long tradition of isolation, a realistic defence budget and level-headed, pragmatic leadership-- is somehow turning into a clear and present danger to the USA. After all, with a billion people China could justify oodles of lovely government contracts for Boeing and Halliburton, no matter how badly social security had to be cut to pay for it. But China's chief role vis a vis the States is to shore up its finances by buying T-bonds: that makes it hard to paint the born-again capitalist commies as inveterate foes of Our Way of Life.

The 'defense' bill is not the only reason why the country is staring bankruptcy and the forfeiture of the dollar's reserve currency status in the face, but it does not help. In fact, as David Walker, a retiring comptroller, warned a couple of years ago, the USA is already technically bust and the actuarial projections for Medicare alone are hopeless as the Boomers cascade into retirement and begin to qualify for it.

The impossible choice facing Obama or whoever can beat him is between paying for the old-- who mostly coughed up their taxes and want payback-- or wet-nursing younger but mostly incompetent immigrant families and minorities. Paying for both would drive direct taxes up excruciatingly, and that's before beginning to pay off the country's mountainous debts.

It is a dilemma for other mature, post-industrial economies, but it's more acute in America because the population is growing so fast and so dysgenically, and the fallout could be nastier because there is so little safety net for those who take sick or lose jobs. The Tea Party folks live closer to personal financial disaster than a typical European welfare-state citizen can grasp.

The Kemptons may say that the USA is at its best in a tight spot, that animal spirits and can-do atmosphere will save the day, etc etc. But today's USA is way different from the USA of the 1930s, and even then it took WW2 and Korea to lift the Dow Jones back to 1929 levels.

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Graham D-C

Dec 18, 2011 at 16:51

Iran has already announced the commissioning of its Russian built nuclear reactor designed for generating electricity. What it had not revealed ( as it is required to do under international law) are the hitherto secret installations built into hillsides, which had it not been for satelllite imagery, would perhaps have never been discovered. Equally Iran has never satisfactorily explained the presence of radiation in empty buildings that UN inspectors had previously announnced they wanted to inspect. Also, given the claim that the thousands of centrifuges Iran is using for peaceful purposes, why are they located in installations built 50-100 ft below ground level ?. One also has to ask why Iran is test firing N. Korean made rockets with a range of circa two thousand miles?

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Ian Baldwin

Dec 18, 2011 at 16:56

Any chance of Will Philips trying to summerising his points and making them a bit more digestible or is he a financial advisor?

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John Whiteley

Dec 18, 2011 at 17:06

"William Phillips" - your articles are brilliant, and I would be interested to know who you are. Surely someone like you cannot be allied to the cowards' gutter that perpetrates any amount of erroneous drivel several levels below that of your Lamestream Media?

As you know, William Phillips was a famous New Zealand economist. Perhaps you share his name? You are surely a very clever American economic historian.

You deserve our knowing to whom our thanks are due, and the reassurance that you are no coward, unlike MOST of the world who post on internet blogs.

John Scott Whiteley

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Dec 19, 2011 at 11:03

I do not believe that it was Mrs. Thatcher that ruined British Industry. I believe that it was the inter union competition to make their members the highest paid workers in the country that wrecked the car, coal, steel and rail industries during the 60s and 70s, and now, just as this country least needs it, they are planning to have another go at wrecking the country mainly to justify their leaders six figure salaries, and they criticise the bankers!

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Alex Duncan

Dec 19, 2011 at 16:23

I have a few oil shares that that I play aound with from time to time.

i managed to sell a large holding in BP at the right time and think that I should be getting back in again early in the new year. When all the guilty partners have repaid BP for their mistakes I am sure that there are good times ahead.

The last time I made a very quick profit on Premier Oil was as a result of the wars in the 1970s. In the old days we received a 1 for 10 scrip issue every year. Since then I have had one small dividend. and I framed the dividend counterfoil to pass on to my grandchildren. In recent years the drilling success rate has been less than impressive and I am looking at the recent acquisitions to provide some interest. I cant wait another 40 years for the long awaited take over and have to be content to make use of the cheap dealing offers that are available to buy and sell on a very regular basis.

I have taken my profits from Tullow but am not attracted to go back in again.

I cant believe what I read in the press and I have a long memory of market experts making a lot of money recommending certain speculative companies that they hold and making their packet when Joe Public acts on their advice. If I know what is going to make my fortune I wont be telling anyone else

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Dec 22, 2011 at 16:48

Wow, just found this : Kempton or Phillips ? two of our most revered go head-to-head. Like others I’m in awe of William’s erudition, but I think (hope) he’s way too pessimistic about the US of A. True, it faces the huge challenges so eloquently described, plus at least one other – its insatiable appetite for energy.

But William understates its strengths – a country the size of a continent (therefore low land prices which ultimately underpin so many other costs); vast natural resources ; well able to feed and water itself; a century or more as the world’s leading innovator in technological, financial and social spheres; overwhelming military capability if (when) things get really nasty; only one problematic land border which could be sealed easily enough if it were ever necessary to retreat to fortress America.

William, your thoughts about race are always interesting but some of them betray, dare I say, an outdated, conservative mindset (which I myself share). Perhaps it’s the difference between looking backwards and forwards. Race and culture are vital aspects of my (our) identity. I value the stock and culture I’ve come from and would wish to perpetuate them. But so many of the young seem to accord them such little value.

The young travel so much more now, mix so much, have so broad a range of role models, consider the past so little, seem to see racial and cultural differences as irrelevant in general and often appealing in particular. Both we and the US are headed inexorably, for better or worse, down the road to gene soup, two nascent rainbow nations with Obama himself as a shining figurehead, the pre-eminent (but by no means only) example of what marvels can result from interracial partnerships.

Regrets ? Irrelevant; the process has already gone critical; there’s no way of stopping it short of an unacceptable degree of fascism. We have to ride the wave and hope for the best. There are some reasons to be hopeful : Brasil for instance, if I’m right to characterise it as an example of a maturely rainbow nation, may not yet have brought a decent living standard to enough of its people but has at least produced much good literature and the world’s most exciting football and music.

The likely regionalisation of the US along dominant ethnic lines is plausible, but ethnicities will still be increasingly blurred, and in any case they’ll still shop at Walmart, fill up with Esso, talk into iPhones, eat McDonalds, watch the Superbowl. And those Mexicans pouring into the southern states – are they looking to claim them back for Mexico, or to escape their homeland ? Do they seek to subvert the American way of life or cleave to it, having suffered under one of the less appealing alternatives ? Relatively recent immigrants are often among the strongest advocates of the mores of their adopted homeland, and of immigration control.

It wouldn’t take much for the US, having started the move towards globalisation (on their terms), to pull back to a new protectionism once the balance of advantage turns against them. They have huge embedded wealth in their own country and dominant interests all over the world. They retain much of their frontier dynamism. The Gates / Buffett philanthropy movement speaks of a surviving altruism among the plutocrats. Even the poor still in large part dream the American Dream. So for all their current debt problems I can’t see the US going down the pan any time soon.

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keith jefferies

Dec 30, 2011 at 14:37

Well done Mr Phillips a wonderfully accurate synopsis of where the western developed world now finds itself both socially and economically. It may be slightly off topic but it is highly relevant for our financial future.

As a footnote where do we go from here. The western developed world is hamstrung by a very narrow political spectrum where divisons between political parties are blurred and difficult to separate leaving voters confused and disinterested. This is encouraged by those in society at the top of the food chain whose vested interest is in the status quo.We need politicians with greater economic vison bringing new ideas and thinking. This is not to say that we need more political options to the left or right, political dogma is in its death throes, but rather political options that explore more pragmatic economic strategies. Views and ideas that will not only offer more political choice but also engage with and appeal to those voters who give polling stations a miss every 4 years or so.

Alas when surveying our current political landscape it is difficult to see where these shining lights will come from.

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Graham D-C

Dec 30, 2011 at 17:25

If at all, it will take a generation for the USA to recover from the disasterous reign of G W Bush, who driven and controlled by his financial backers- America's industrial giants, led him to engage in two wars that have been lost at a national cost of several trillion dollars and thousands of American lives. Wars that have proved (as it did in Vietnam) that no amount of military technological superiority can win a ground war unless the soldier on the battlefield can identify the enemy by a distinctive uniform.

Whilst the possibility of a significant conflict between the USA and Iran continues, Afghanistan and Iraq will be the last wars America will fight on enemy soil. Beyond President Obama reign, I see no politician in the background capable of filling his shoes, to that end Americans must hope that Obama can set in stone standardsand policies that will provide a guidng light for those who follow him, which in turn might allow a recovery.

I see no point in the USA financing a radical islamic country like Pakistan who despite having a nuclear arsenal, appears to be unable to feed its own people.

On the other hand, the people of N. Korea, who have no part in decision making, should be given the utmost practical aid to overcome the overwhelming burden of its dictatorship. In essence, like any well run household, the USA should seek to save and spend wisely the wealth it generates in order to survive; just as China the world's next superpower is doing today.

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Dec 31, 2011 at 20:28

@Keith Jefferies ....''Alas when surveying our current political landscape it is difficult to see where these shining lights will come from'' ...........

Cometh the hour - cometh the man. Think - Britain 1979.

Back to basics, the more cautious could look at Fundsmith Equity fund.

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