The Fleet Street Letter is back. It’s back at a time in British history where you’ll need clear thinking, good judgement, and professional investment experience more than ever before.
Elsewhere, you can read about Charlie Morris, the new Investment Director of the new Fleet Street Letter. He inherits a proud tradition and a serious responsibility of providing British investors with British solutions to British problems. (I’ll explain more what I mean by that in a moment). With 17-years in the City managing as much as £3 billion, he has many useful connections in the world of finance and a proven track record for investors.
But he’s not without friends in Westminster. That could prove useful in reading the political tea leaves for next year. 2016 promises to be an eventful year in British and European politics, and an even more eventful year for British investors. Before I get to that, you may have a question…
‘I’m glad that you’re back, but why did you leave in the first place?’
As important as it is that you understand the ‘big picture’ in 2016, you may have a practical question right now. And if I were you, I’d want that question addressed directly: why did you go away if you were going to come back later?
That’s a fair question. And I’m going to answer it. But let me make one point clear before I go any further.
‘Brexit’ could change everything
Britain faces a major political decision in 2016. Will it stay in or leave the European Union? The stakes for the economy could not be higher. It will be the single-most important political decision in the next 100 years of British history. It may be the most important vote you ever cast.
For investors and retirees, the stakes will be equally high. Next year could be the year that British interest rates begin to rise. The potential British Exit (Brexit) from the EU will also be a major factor in share prices, and on sterling and Gilts. New rules on pensions and buy-to-let will pose new challenges.
Globally, emerging markets, China, and commodities appear headed in the opposite direction of the US dollar and the S&P 500. The world is drowning in debt ($57 trillion added since 2009). For British investors, there’s never been a more important time for you to get top-shelf investment and political insight about Britain and British investments.
That’s exactly why the Fleet Street Letter—Britain’s oldest financial newsletters—is coming back this year. As someone who worked with Lord William Rees-Mogg on the US version of the Fleet Street Letter back in 1998, and then on the UK version in 2004 when I lived in London, I’m excited to be bringing back this great British tradition at a key time in financial history. But why did it leave in the first place?
A division of investment labour
The Fleet Street Letter started as a geopolitical investment letter. But to do geopolitical investment intelligence well, you have to do it the way Jim Rickards is doing it in Strategic Intelligence. As Jim has pointed out:
There are global capital markets and there is the field of geopolitics. In one you have stocks, bonds, derivatives and other financial products you’re familiar with. In the geopolitics space you have intelligence work, military and diplomacy. Our work is at the intersection of both spaces.
There’s no one more qualified in the world to do geopolitical investment intelligence than Jim. He’s the world’s pre-eminent financial warfare analyst. As a two-time best-selling author, he’s made himself one of the must-read minds on gold, the ‘de-dollarisation’ of the global economy, and a world embroiled in the third great currency war of the last 100 years.
The launch of Strategic Intelligence in Britain in July last year was a great improvement to the quality of analysis and advice being provided to British investors like you. I was personally glad to see it, given that I began working with Jim over three years ago to spread the word about the changing geopolitical landscape.
An insider goes public
Jim and I first met in person on Tuesday, August 14th 2012 at the corner of Bridge and Phillip streets in Sydney. He was about to give a two-hour private briefing to about 100 readers from Port Phillip Publishing, the Aussie financial publisher I was in charge of at the time. I’d arranged the briefing when I learned that Jim was in Australia. He graciously agreed to fit in the briefing before he got a plane back to New York that evening.
It was a real coup. Jim had just given virtually the same presentation to a small group of government and highly-placed business leaders at an exclusive off-shore resort on Hamilton Island in Queensland. He was there to talk about his best-selling book Currency Wars. But more than anything, he was there to talk to Australia’s political and economic leaders about the implications of the currency war raging between the United States and China.
As far as I know, Jim’s appearance in front of my small group at the Museum of Sydney is one of the first public appearances he made to ordinary investors. Up until that point, his briefings were only available to government officials or big-money clients on Wall Street. That day was a turning point.
Jim and I stayed in touch and he came back to Australia at my invitation in February of 2014. He was a keynote speaker at a conference I organised called World War D: Money, War and Survival in the Digital Age. It was by far the best event of its kind I’ve ever been involved with. But what made it even better is that the conference was the first place in the world you could get a copy of Jim’s second book, Currency Wars.
I’m not telling you all this to name drop or make myself look better. My point is this, I know first-hand that what you get in Strategic Intelligence is, by far, the best analysis of the global currency war you can get anywhere in the world. I’d like to take some small credit it getting Jim in touch with my colleagues at Agora Financial in the US, and then later at Agora Financial here in London.
Getting the word out to investors like you about what’s at stake right now is my mission as a publisher. Like you, I’m a regular reader of Jim’s work. And like you, I know of no other better source in the UK for showing me exactly how the world is changing and what to do about it. His recent letter on the relationship between commodities and the dollar—and the possibility that both trends could reverse in 2016—is valuable investment intelligence.
British investment intelligence
The decision to cease publishing the Fleet Street Letter and instead publish Strategic Intelligence resulted, I believe, in better more targeted geopolitical investment intelligence for British investors.
My decision to revive the Fleet Street Letter through MoneyWeek Research aims to expand the coverage you get of European and British geopolitical issues that affect your investments. In the division of investment labour, I want the new Fleet Street Letter to do for the British market what Jim Rickards has done for global investors.
This decision, by the way, also stems from Bill Bonner’s decision to split his London publishing group into two different operating groups in 2015. Those groups—Agora Financial UK (which publishes Strategic Intelligence, in association with Fleet Street Publications Ltd) and MoneyWeek Research (which will publish the new Fleet Street Letter—are two separate and competing businesses now.
Don’t get me wrong. The people who run both businesses know each other. We’re cordial. But if you know Bill, or have read his work over the years, you’ll know he believes the best way to let the best ideas flourish is through competition.
At some point last year, he decided that instead of running his whole London-based publishing company as one group, it had grown too large to accommodate all the investment ideas worthy of publishing. The solution was not to get bigger. It was to get smaller, and let two companies run by different groups of people publish their best ideas directly to you and let you decide.
I wouldn’t normally go into so much detail about the rationale for a business decision. But if you were a reader of the old Fleet Street Letter, I figured an explanation was in order. You subscribed to one newsletter. It moved to a new business and turned into a new (and excellent) publication. Now the newsletter you subscribed to is coming back with the same name, but it’s published by a different business.
I’ll admit that even I was confused when I read about it. But that’s why I’ve written this letter. To clear up the confusion and let you know what’s going to happen next. So what’s going to happen next?
From Lord William Rees-Mogg to the world’s pre-eminent financial warfare expert
Before I get any further I should introduce myself. My name is Daniel Denning. As of August, I’m the new Publisher at MoneyWeek Research. I moved to London after founding Port Phillip Publishing in Melbourne, Australia in 2004. I lived and worked in Australia for almost ten years. I liked it so much I even became a citizen in 2015 and regularly barrack for the Aussie cricket team (no apologies, lots of respect.)
As I said, my first involvement with The Fleet Street Letter was in 1998. I’d just begun working at Bill Bonner’s Agora Publishing. It was an exciting time for investors, if you recall. It was right after the Asian Crisis and right before the failure of Long Term Capital Management. And right on the precipice of the huge dot.com melt up in stocks.
It was my great pleasure to work with Lord William Rees-Mogg on the US version of The Fleet Street Letter from 1998 to 2004. William’s secretary would fax over hand-written versions of his monthly articles. I would type them up and send them to layout and design team before publication.
When I moved to London in 2004 for a year and a half I was able to work with William more directly. We talked on the phone and met at various locations around London. As former editor of the Times of London, he was a member of the Garrick Club and invited me to lunch there several times. A personal highlight was having tea with William in the dining room of the House of Lords.
Only now do I realise how well-connected William was with the political and financial elite in British life. Those connections—lifelong relationships with people in positions of power and influence—were what enabled him to provide such valuable insight, and to influence the direction of British politics.
William’s stewardship of the Fleet Street Letter put him squarely in the tradition of the letter’s founder, Patrick Maitland. In fact, Maitland and Rees-Mogg knew one another. It’s no surprise. Maitland began the letter in 1938 with the express view of providing Britons with high-level insights into geopolitical matters of financial and economic significance.
That mission continues today, although sadly without Lord Rees-Mogg. Like you, I was saddened to hear of William’s death in late December of 2012. Yet even though he was ill at the time, the quality of his insight into Britain’s geopolitical affairs was as high as ever. ‘A Europe without Britain is conceivable, he wrote, ‘but a Europe without France or Germany is an absurdity.’
His last essay in the Fleet Street Letter was all about the future of Britain’s role in the European Union, especially the role of the City in European and global finance. Here’s what William wrote then:
The only way, then, that Europe might break up is if the burden of a Eurozone were to become overloaded with obligations and debt to the point that Germany would be unprepared to carry them. The Maastricht Treaty led the Germans to accept, in reality if not in theory, that they had an ultimate responsibility for the economic defence of the system. They put themselves in the same position that Britain was in after the Second World War.
Britain remained responsible for the support of the Sterling Area, when the international public knew that Britain did not have the resources to continue doing so. The disproportion between the resources of Britain and the United States had created a situation in which Britain had only a limited expectation of being able to carry the Sterling Area which had really been a responsibility of the United States since the end of the War.
The Germans may be forced to carry the burden of the euro for much longer. When the interests of the euro collide with German national interests Europe will have a problem.
No European country wants to cede powers to the other nations of the Eurozone, the strong do not want to hand over their money to those who are not so well placed. And the middle rank powers see that any transfer of powers is likely to be a transfer away from them. There are also new events which have changed the outside world’s confidence in the Eurozone. And this has been felt by all the Eurozone nations.
I wonder what William would say today. The euro currently serves German interests. It ensures German manufacturing dominance within the Eurozone. And that itself gives Germany tremendous political power over less economically powerful members of the trade bloc.
If anything, it seems more likely that Germany will keep the euro and lose Europe. If it’s not Germany’s interest to bail out Greece and Spain, then maybe Germany will go. But it’s the last quoted bit that intrigues me the most. William spoke of ‘new events’ that have changed the rest of the world’s confidence in the Eurozone.
Since he wrote those words, even newer events have changed the confidence that members of the European Union have in the Union itself. A big part of that change is the immigration and refugee crisis that began in 2015. That crisis has put several big issues under the microscope: the security of the European Union’s external border and the freedom of movement within the Union.
A prediction: this year’s British referendum will swing heavily on the immigration issue.
There are other issues that are just as, if not more, important. The stifling nature of EU regulation, the relentless transfer of parliamentary sovereignty from national capitals to Brussels, the fact that the EU itself is one of the slowest growing economic regions in the world, saddled with massive debts, costly cradle-to-grave Welfare States, and double-digit youth unemployment rates—any of this single factors would be enough to turn the election.
But the immigration issue, from a British perspective, may trump them all. And that brings me back to why I’ve decided to revive the Fleet Street Letter today. I’ll keep it simple:
Now is a crucial time for British investors. As a migrant myself, I know that you can’t analyse a countries political and economic problems as an outsider. An outside perspective can be valuable, of course. An outsider will see things you can’t.
But here’s why I think the Fleet Street Letter and Strategic Intelligence are complementary. Jim Rickards is analysing the markets as an expert on financial warfare. His forecasts and strategies are, as the title would suggest, strategic in nature; how to defend against threats posed by the currency war and how to exploit the opportunities created.
The new Investment Director of the Fleet Street Letter, Charlie Morris, is doing something entirely different. Charlie’s attacking the markets from the perspective of a 17-year City veteran fund manager. What do I mean by perspective?
Charlie’s investment strategy begins with an asset allocation strategy. He’s realised being in the right asset class at the right time is even more important than selecting the right stock. Charlie’s investment recommendations are made with a British investor in mind; someone investing in pounds, dealing with British interest rates, and with more at stake from the direction of the FTSE 100 than the S&P 500.
I won’t go into too much detail about Charlie’s plan for 2016. Should you decide you want to hear more, you’ll be able to do so elsewhere. What I WILL say is that the Fleet Street Letter is not coming back as a tip sheet.
From its earliest days with Patrick Maitland, the Fleet Street Letter was never intended to be a tip sheet. You can get tip sheets anywhere. And they are certainly handy. I’ve been involved in more than a few of them. They have a clear purpose: to provide you with well-researched share tips. You can do whatever you wish with those ideas; take them all or simply pick and choose between the ones that seem most interesting and useful to you.
From its very beginning in 1938 through its hey-day with Lord Rees-Mogg, The Fleet Street Letter (at its best) was about providing you with more than just good investment ideas. It was about helping you become a better investor with better knowledge, better insight, and better judgement; all provided in the context of British politics, British companies, British interest rates, and British money.
It’s probably immodest to say that a letter’s goal is to provide you with a superior understanding of the world. But that’s what I always thought. And that was my whole attraction to being involved in the project again. It’s why bringing back the Fleet Street Letter was the very first item at the top of my list.
Thanks very much for your time and best of luck in 2016.
Dan Denning, Publisher, Money Week Research