Switzerland's getting into a currency war with us? Brilliant!

Spend, spend, spend.

It's sort of like the Baader-Meinhof Phenomenon – you hear a relatively rare phrase once, and then it starts springing up all over the place. Today's is "currency war".

At the Telegraph, Ambrose Evans-Pritchard has uncovered evidence that Switzerland and the UK are "effectively fighting a 'low intensity' currency war against each other". He writes:

It seems you can’t debase your coinage these days even if you try.

The Bank of England is straining every sinew to drive down sterling with quantitative easing, and what happens?

The Swiss National Bank trumps Threadneedle Street with an outright blitz of Gilt purchases. They just print it, and buy.

Switzerland is one of the most forthright currency manipulators out there at the moment, as it struggles to hold its franc above 1.20 to the euro. This chart, from the ECB, shows the effect of that fight:

Although currency speculators have been battering at the floor, the Swiss central bank has held to its promise (but it did drop down to 1.1997 francs for a few minutes back in April last year) by buying a metric shittonne (technical term) of eurobonds. Now that it owns so many of those, it is trying to diversify its holdings into other currencies, "allegedly into Aussies, Loonies (Canada), Scandies, Won?, Real? but above all pounds" according to Evans-Pritchard.

The Swiss are doing it because a weaker currency, particularly relative to the Eurozone, is good for them – it boosts deficits and interest rates, both things which ought to keep them out of recession. But we want the same thing. Hence: currency war.

In the US, meanwhile, some economists have argued that America needs to get tough on currency manipulators. The Washington Post's Dylan Matthews writes:

In a new working paper, Joe Gagnon and Fred Bergsten at the Peterson Institute argue not just for import tariffs like those Schumer advocates, but for a full-frontal assault on countries that are manipulating their currencies… Specifically, they want the U.S. to offer the eight worst currency manipulators — China, Denmark, Hong Kong, Korea, Malaysia, Singapore, Switzerland and Taiwan — an ultimatum: Stop manipulating, or else we’ll do the following:

Buy up exactly as many assets in their currencies as they have in ours… tax the earnings from dollar-denominated assets as punishment… treat currency manipulation the same way we treat export subsidies for the purposes of imposing retaliatory tariffs [or] take the manipulators to the World Trade Organization (WTO).

The first of those options is an archetypal currency war. Gagnon and Bergsten argue that making that threat would "currency manipulation, make the dollar less expensive, and thus promote U.S. exports"; the standard refrain of those entering currency wars.

And Matthews offers the standard objection:

The risk is that Gagnon and Bergsten’s policies would only provoke the targeted countries, leading them to respond with still more manipulation and/or tariffs on U.S. goods, setting off a full-fledged currency and trade war that just leaves all parties worse off.

Except that that's not really true (well, the trade war part is). A full-fledged currency war – whether it's between America and all eight of its named "manipulators" or Britain and the Swiss – is indeed a zero-sum game when it comes to the actual level of the currencies. Both GBP and CHF cannot weaken against each other at the same time, definitionally.

But while the war is pointless, the act of fighting it could be a good thing. The Atlantic's Matthew O'Brien writes:

The downside of devaluation is that no country gains a real trade advantage, and weaker currencies means the prices of commodities like oil shoot. But and here's the really important part devaluing means printing money. There isn't enough money in the world. That's the simple and true reason why the global economy fell into crisis and has been so slow to recover. It's also the simple and true reason why the Great Depression was so devastating. We know from the 1930s that such competitive devaluation can turn things around.

War is good if it creates more of something you want. A "charity war" between friends is good because it leads to more donations. A currency war is good because it leads to more money. If war is politics by other means, a currency war is stimulus by other means.

Think of it by analogy to fiscal stimulus. Sometimes, a government decides to do that directly. But just as frequently – say, during the Second World War – it embarks on a massive deficit-funded spending programme because it feels it has to, and it just so happens to be macroeconomically beneficial as well.

So please, Switzerland, keep buying British bonds. It will force the Bank of England into making the moves it ought to have done a long time ago.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

A National Trust property. Photo: Getty
Show Hide image

The National Trust is right to bring gay history out of the closet

If you want to explore the history of Britain, you can't ignore its LGBT citizens.

Imagine seeing a monument to executed gay men and thinking literally anything other than, “how sad and poignant”. In September, the National Trust unveiled exactly such a memorial at one of their properties in Dorset. Kingston Lacy was once owned by William John Bankes, a man whose sexuality, in nineteenth century Britain, was a capital offence. The NT’s moving tribute to Lacy and so many others persecuted for being queer was deemed a “PC stunt” by the Daily Mail. Tory MP Andrew Bridgen somehow managed to find the monument “totally inappropriate”, adding that he looks to the Church for moral guidance – not the National Trust.

 But let me backtrack. I’m in the darkened vault of the Tower of London where the Crown Jewels are kept. The tour guide has just made a joke about vibrators.

The last time I was here, I was about nine and I was on a day out with my grandma. She made no mention whatsoever of sex toys. I wonder, actually, if this is the closest to this ceremonial bling a joke about vibrators has ever been made. I also wonder if there’s ever been a tour of the Tower of London where the guide – as my one did about fifteen minutes ago – has quite overtly slammed British imperialism. One thing I know for certain though: this is the first ever official LGBTQ tour of the Tower, organised by none other than Historic Royal Palaces – the charity that manages several of the UK’s grandest former homes.

 Earlier, at Traitors’ Gate, me and a tour group of about twenty people were told about Irish republican Roger Casement, who was executed, here, in 1916. Casement was dedicated to speaking out against the atrocities of imperialism, and was rumoured to be gay. But it wasn’t his alleged homosexuality that landed him in this thousand-year-old fortress-turned-prison, rather his involvement in the Easter Rising. King James I though – I later learn – was almost definitely gay or bi, having a number of “favourite” male courtiers. “Favourite” seeming to be a particularly coy seventeenth century euphemism for “gay lover”.

 The tour lasts about an hour and, although at times it seems to be slightly scraping the barrel for queer content, the pure effort of it is nothing short of heroic. The Crown Jewels section focused in on Queen Victoria, and all the anti-gay legislation introduced during her infamously prudish reign. On this tour, her freakishly tiny crown becomes a symbol of oppression rather than a cutesy royal knick-knack. Which, I can only imagine, would have the “gay agenda”-fearing monarchy groupies of middle England in a Faragean frenzy.

 This year marks the fiftieth anniversary of the 1967 Sexual Offences Act, which partially decriminalised (male) gay sex in England and Wales. And with the sheer number of events, like the queer Tower tour, at palaces and historic institutions – from Hampton Court to the British Library – you’d think it was the Queen’s platinum jubilee.

Now for some word association.

 “National Trust”.

 Pensioners? Fruitcake? Dust? Anarchic genderqueer hook-up joint?

 Not so much that last one? Well then, it may come as a surprise that it was the fusty old National Trust, working alongside the National Archives, that recreated a historically accurate covert 1930s London gay bar. For a couple of nights in March this year, Soho’s Freud Café was transformed into “London’s most bohemian rendezvous”, the Caravan club. In a spectacularly and appropriately theatrical evening of incense, cocktails and vintage drag queens, the NT totally nailed the “illegal den of queer iniquity” thing. This was preceded by a historic LGBTQ tour of Soho, which, like the Tower tour, didn’t gloss over the brutality of the British establishment. The Soho tour was rightfully heavy on harrowing stories about police raids on queer venues. In fact, it was through police reports collected by the National Archives that the NT was able to recreate The Caravan (which was shut down by the police in 1934).

Further north in London, another LGBTQ event hosted by the National Trust was “Sutton House Queered”. If the idea of a Tudor manor house in Hackney isn’t surreal enough, in February the grade II listed former home to aristocracy was the setting of a queer art exhibition. Think – richly wood panelled great room containing a painting of Henry VIII in full bondage gear. This was also the debut of the first gender-neutral public toilet in an NT property.

And, in a display of borderline hilarious inevitability, the Daily Mail … raised objections. “Preserve us from a National Trust that’s so achingly right-on”, quacked a Mail headline in December last year, after the NT announced its plans for a series of “Prejudice and Pride” events marking the 50th anniversary of the Sexual Offences Act. This July, the NT came under attack from the Mail, yet again, for outing late aristocrat, Robert Wyndham Ketton-Cremer. Ketton-Cremer left his Norfolk home to the Trust in 1969, and was supposedly outed as gay in a recent film for the “Prejudice and Pride” series. Whether or not the NT’s decision to discuss Ketton-Cremer’s sexuality was ethical, it’s a refreshing sort of controversy: the kind where an old British institution is actually quite blasé about gay sex, and the Mail goes nuts.

 Throughout this year, my inbox has been almost quite alarmingly full of press releases for queer-related events and promotions. From rainbow hummus (yes.) at the Real Greek restaurant, to “Pride at the Palace” at Hampton Court, more than ever, everyone seems to want a slice of the gay action. The Tate Britain’s “Queer British Art” exhibition, which opened in April, showcases a century (1867—1967) of sexually subversive works by LGBTQ artists. Although overwhelmingly male and posh, it’s hard to play down the importance of such a simultaneously harrowing and celebratory retrospective. In one room, A large and imposing portrait of Oscar Wilde stands right next to the actual door to his prison cell in Reading Gaol, where he was imprisoned for the absolute non-crime of “gross indecency”. Even if Britain’s cultural institutions are just playing up to a trend, a very big part of me is into it.

 In July, I went to a panel discussion organised by Opening Doors London, a charity that provides support for older LGBTQ people. A group of queer people who were adults when the Sexual Offences Act was passed spoke about what this anniversary means to them. When I asked panellist Jane Traies, the author of The Lives of Older Lesbians: Sexuality, Identity & the Life Course, what she thought about the likes of the National Trust taking on queer history, she was understandably wary of the possible faddy-ness of it all.

“It’s good, though, that history itself should come out of the closet,” she said.

                                                                                       

Eleanor Margolis is a freelance journalist, whose "Lez Miserable" column appears weekly on the New Statesman website.