Whether Norway Fund should be free to invest without government intrusion is not really the most important question

Sir, I refer to Richard Milne’s discussion of how imposed investment limitations caused the Sovereign investor to miss out on billions of dollars over past decade, “Ethical stance crimps Norway oil fund” March 22.

The real question is: if Norwegians had been allowed to decide on their own per capita share of the net oil revenues, like for instance spending it now or picking their own investment advisors, would they have been better off or not? Long term, I believe they would.

What now exist are some millions of Norwegian expecting to be recipients of whatever the central managed oil revenues can provide them, without having had to take any responsibilities for it. By allowing a Fund to manage it all, Norwegian have missed a great learning opportunity, and have less idea about where all oil revenue came from, and where all oil revenues went.

If something goes wrong with the Fund, something that can always happen, they will show little understanding. Also, the sole existence of a huge amount of centralized savings is something that can attract the attention of dangerous redistribution profiteers/populists.

I recently sent a similar letter, also commenting on the Norwegian Fund. Seemingly that Fund is a fund that shall not be questioned, too much, at least not by FT.

@PerKurowski

Brexit contains more true catastrophic risks for the EU and the Euro than it does for Britain

Sir, I refer to Martin Wolf’s “Britain’s leap into the unknown” February 8.

Do I disagree with him? No, if I look at Brexit as Wolf does with a microscope focused solely on Britain. But, from a wider perspective, looking at so many other unknowns, his Brexit concerns takes on some Lilliput against Blefuscu war characteristics.

Why? Many would probably start by mentioning the environmental problems of the earth and overpopulation. But setting these aside there are many other challenges that needs to be considered so as to weigh correctly what could be coming with Brexit. Let me just briefly mention the following three.

First, I have the impression that Brexit carries with it more risk of true catastrophes for EU and the Euro than what it has for Britain. This is not a case Britain leaving a happy family behind. It is more like running away from a very messy dam full of repressed feelings of discontent, ready to burst at the urgings of any able populist, and to which its comfortable and full of themselves technocracy is unable to respond to adequately.

Second the banking system. Its regulators, with their risk weighted capital requirements, manipulated and distorted the system in such a way that the real economy is not being fed the nourishment it needs; and the banks themselves are bound to collapse, as would collapse any casino that had its roulette table equally manipulated.

Third, the growing structural unemployment caused by robots and automation. The only reasonable response to that seems to be some sort of Universal Basic Income floor, and that is something that must be much easier to develop within a nation. Just thinking of some EU Commissioners having to agree to a uniform Universal Basic Income policy applicable to Germany and Greece is too challenging.

Of course Brexit represents difficulties… but like all difficulties it also encompasses some opportunity. My dear English friends think of it like this. You are now sailing back to your homeland and soon, for good or for bad, you will at least be able to see the white cliffs of Dover again. 

@PerKurowski

PS. And of course you want to be as far away as possible when the Eurozone's debt bomb explodes

Even sophisticated up-in-the-fronters can fall victims to populists, like those dressed up as bank regulators.

Sir, John Lloyd correctly writes that “rising inequality, wage stagnation and workplace insecurity merge with concern about fragmenting communities, exacerbated by fear of unregulated immigration and terrorism…produces a popular energy” that can be captured by populists. “For left-behinders, populists paint a picture of a better future” August 17.

But not only left-behinders can be victims of cheap populism, those up-in-the-front too, and populism can come in all shapes of form, including camouflaged as bank regulations.

Like that populism imbedded in: “If banks avoid risks, this will keep them from failing, and we will all prosper. So more risk more capital - less risk less capital”

And what is amazing is to see the how many famed journalists, Nobel Prize winners, academicians and politicians, fell for it, ignoring that what is risky is already made safer by being perceived as risky, but made even riskier if perceived as safe.

And what is even more amazing is how, even after a crisis brought on by excessive bank exposures against too little capital to what was perceived as safe; and an economy that is stagnating and not showing increased productivity, they still can’t open their eyes to the distortions in the allocation of bank credit to the real economy caused by that grievous piece of bank regulation.

Or is it like John Kenneth Galbraith said: “If one is pretending to knowledge one does not have, one cannot ask for explanations to support possible objections.” “Money: Whence it came where it went” 1975.

@PerKurowski ©