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He’s the ultimate opportunist; the indomitable wide-boy; the eternal optimist with an unflagging sense of enthusiasm. ‘You wait Rodney – this time next year we’ll be millionaires!’ he can be repeatedly overheard, reassuring his younger brother in their worst moments.

Our hero can ‘turn more than a bob or two’ and we should not rush to judge. For millions, all the qualifications, job prestige, and so called trappings of success belie more than one generation of ‘wannabees’ simply living ‘champagne lifestyles on lemonade money.’

Dell Boy deals in cash, not credit. When he’s ‘on the ups’ he knows he is!

The brainchild of writer John Sullivan, ‘Only Fools and Horses’ flourished on the BBC in 1980’s Britain, a period in time when the country was subjected to Demand-Pull inflation. In permitting the money supply to grow faster than the ability of the economy to supply goods and services, a sharp rise in both the demand for credit and house prices resulted, with the added inducement of very low interest rates.

When I first entered the Financial Services industry in 1981, Building Societies, and to a lesser extent, local Authorities, had an almost monopolistic hold over housing finance. The Societies offered attractive enough retail terms to encourage savings, and then lent these deposit monies to home buyers at rates fixed by the Building Societies Association. I well remember the queuing system, in which mortgage advances were strictly rationed; young people being encouraged to habitually save from early working days in order to establish a relationship with the local society. It seems almost archaic by today’s standards, yet it fostered a sense of frugality with no obvious expectations of material wealth. Even by the early 80’s, I was losing count of the number of people using that well worn catchphrase ‘I’ve just bought a house.’ Personally, I could never relate the concept of a 5% deposit and a 95% mortgage with the notion of owning anything – but that’s my problem, except of course, that it eventually became a nationwide problem when the bubble burst in 1989.

A quarter of a century later, the ‘middle class idyl’ is a distant mirage. In Britain alone, today’s fiftysomethings are reconciled to a life devoid of the comforts their parents took for granted – a reasonably sized house, fully paid for by the age of fifty, dependable health care based on national insurance contributions alone, a decent education for the children, and a reliable pension with a guaranteed linkage between earnings and service. As bad as that sounds, it could be worse. One has only to consider the horrendous urban decay currently afflicting that once proud American city of Detroit, to realise that English conurbations may eventually be similarly affected by the worldwide economic recession. Detroit, Michigan, was the epicentre of America’s car industry, and recollections of Martha and the Vandellas being filmed promoting their new single ‘ Nowhere to run’ amidst an auto assembly line, seem a distant memory now.

http://www.youtube.com/watch?v=_HyaL1Y_Ibc

Rising oil prices in the 70’s, automation, and increased international competition, particularly from Japanese and German car makers, precipitated the city’s current bankruptcy status.

Problems had begun with America’s suspension of dollar-gold convertibility in 1971. The Organization of the Petroleum Exporting Countries’s main objective was always to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers. This approach, until the early 70’s, had led to an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.

Until Nixon’s fateful decision, the U.S. dollar was the only national currency directly backed by gold. In other words, countries could trade their greenback dollars to the U.S. government for the equivalent amount of gold bullion at any time. However, the U.S. took away the government backing of the dollar with an actual gold supply (known as leaving the gold standard) in 1971, and every major international currency has followed suit. OPEC countries, suitably aghast at America’s decision, asked themeselves the obvious question – “Without gold, what does guarantee the value of our money?” The resounding answer was of course, “nothing at all.” Reprisals were inevitable. With their dollar holdings devalued, Arab members of OPEC responded ruthlessly in October 1973 in response to the outbreak of the Yom Kippur War, raising the posted price of crude by 70% and placing an embargo on exports to the U.S. and other nations allied with Israel. Although the fighting ended in late October, OPEC continued to use the “oil weapon” over the coming months. In November oil exporters cut production 25% below September levels, and the following month they doubled the price of crude. By January 1974 world oil prices were four times higher than they had been at the start of the crisis.

I recall watching the BBC’s flagship ‘Panorama’ in October 1973, and realising that all of us in the West could be held to ransom over energy supplies. The prospect of an economy grinding to a halt was in fact, nothing new. The same mobilisation problem had perplexed the Nazi High Command throughout the war. After 1939, Romania developed into Germany’s chief overland supplier of oil. From 2.8 million barrels in 1938, exports to Germany increased to 13 million barrels by 1941, a level that was essentially maintained through 1942 and 1943. It would take the air raids on the Ploesti oil fields and refineries in August 1943 to destroy half of the Romanian refinery capacity, but at great cost to the lives of Allied bomber crews. If the Germans were that focused on protecting their oil interests, then we should have expected nothing less from OPEC thirty years later.