Early August in England was “hot”: London and some other major English cities were stricken with unrest attended by looting and arson and involving over 30.000 people. 5 people were killed, 300 were injured. The damage done by the rioters is shocking.
The entire world is now trying to reason what happened nearly a month ago. Numerous social and political scientists, economists and other experts keep expressing their opinions on the matter. Shortly after the riots the UK politicians took a range of tough steps:
· A lot of rioters were arrested (over 3000 people, 1500 already jailed). 2 British citizens were sentenced to 4 years of imprisonment only for incitement to unrest through Facebook.
· The rioters may well be deprived of their social dwelling property and social benefits.
In other worlds, politicians (as usual) are looking for means instead of trying to find the causes.
Should we expect anything else form them? They keep trying to create an impression that everything that happened is not serious. According to them, the wave of riots was caused by thirst for money, mental sickness, juvenile delinquency etc.
Pondering on the true reasons
For a reasonable investor such explanations look ridiculous and unconvincing. A wise investor is always a good strategist and analyst.
Investors always have to wait in order to get their investments back and making good profits. And they cannot actually rely on anything but their own knowledge, experience and intuition. Yet they (knowledge, experience and intuition) prompt that the protest pressure and potential around the world will only grow. So, who is right – politicians or investors? The experts of have analyzed the arguments given by both the parties. Now let’s look at the results.
First let’s study the versions offered by politicians and political scientists highlighted by mass media. All these versions can be reduced to only 2 major ones: social and ethnic problems. The left-wing forces assume that this was a classical uprising of the poor against the rich. The right-wing forces are sure that this was an interracial conflict.
The social version:
According to the West European Association of Traders and Investors under , the active supporters of this version say that everything started in Tottenham, a poor London district, that the rioters mainly represented the poorest strata and that they vented their fury mainly on local shops (the symbols of prosperity).
In other words the poor arose against the huge gap between the poor and the rich, against high unemployment (7.9%, 10% among the youth) and against the current austerity policy pursued by the British government, including numerous social and benefit cuts.
Of course, these problems do exist and they do irritate the population. But not everything is so smooth and simple about the social version of the UK riots as it causes a lot of questions. How can they explain that some of the rioters belonged to the middle class, students, a daughter of a millionaire, a young sportswoman, a top model etc.? Which of the looters and rioters demanded a job or an opportunity to get higher education in order to improve their lives?
Moreover, it is about giant holes in the system of youth education. The liberal education system based on pop culture, consumer society and permissiveness with no authority and restraints now seems to have failed. Even a 10-year children can sue their parents for punishment. Pupils at schools have no respect to teachers, they do whatever they want… (By the way the police at first hesitated to break up the crowds in order to not hurt the young rioters among them).
The “interracial conflict” version:
It should be noted that this version is widely denied. They say that there were people of “all colors” among the rioters. However, somehow they fail to take into account that the riot started with the death of a black guy Mark Duggan, that for decades Tottenham has been a district of black immigrants, that most of the rioters where Black and Arab people.
There are plenty of reasons for the non-European British minorities to be discontented: unemployment or badly-paid jobs, high crime rate in those districts. Moreover, the police seem to be biased against the Black and Arab youth. That is why Mark Duggan fell prey to “police racists” so easily. Most British immigrants still feel like they are outcasts living in a ghetto.
Which reason of the riots is the key one? The answer is obvious: serious interracial conflicts aggravated by numerous social problems. A reasonable policy may smooth these problems. However, it is clear that the fundamental reasons are hidden.
According the experts of , interracial conflicts are based on the following factors:
· Poly-ethnicity. These days there is probably no mono-ethnic country in the world. Modern states are turning more and more multinational and multicultural. No wonder that London is sometimes called “Beirut-on-Thames”.
· New economic conditions. A postindustrial society is by default a disintegrating factor in terms of race and ethnicity. The development of such a society is attended by growing production, thus increasing the demand for unskilled labor power. In the UK this vacant niche was filled by immigrants from Asia and Africa. However the immigrants refused to “integrate into” the UK society. They have no need to improve their skills as the local population is not going to take their jobs. They do not need a good education or good language skills to do badly paid work. They live in their own community. All in all, there are 9 million immigrants living in the UK. If the pace of immigration remains the same in 20 years the UK population will reach 70 million people. Even today Muhammad is the most popular name among the newly-born. Soon politicians may have a more serious headache than inflation, unemployment and benefit cuts.
· Multiculturalism policy. The so-called multiculturalism policy seems to have failed. This is what Cameron, Merkel and Sarkozy have already confessed about. Indeed, instead of uniting people we got the rise of parasitical sentiments, the segmentation of cultural differences, the consolidation of non-European minorities and the appearance of neighboring cultures and societies within a certain country.
· Political correctness. It resulted in the suppression of burning, delicate problems.
· Nationalist and racist groups become more active. One of them is The English Defence League (EDL), a far-right street protest movement which opposes what it perceives as the spread of Islamism, Sharia law and Islamic extremism in England. Anders Behring Breivik, a Norwegian right-wing extremist, decided to attract attention to the Muslim problem in Europe by killing 77 people.
Today many people keep pondering on the question: what is more dangerous for Europe – racism and neo-Nazism or Islamic fundamentalism and radicalism? One thing is sure: the results of the multiculturalism policy are completely opposite to what was expected.
What solutions do European leaders have in store? In fact, they get back to the “melting pot” system. In other words, they get down to forced assimilation. For example, it is forbidden to wear hijab in France, Holland, Belgium. The construction of minarets in Switzerland is suspended. The European authorities start introducing obligatory language and history exams for immigrants. However, cultural integration is not enough to solve the problem. Some experts say that immigrants should get access to higher education and prestigious jobs and posts to get a chance to improve their living conditions. The question is how to do that without specific knowledge and language skills?
Now let’s look at what we have just found out. Interracial conflicts are inevitable. Moreover, it is just the beginning. The public is calm, but it is a delusion. It is quiet before the storm. Yet even a tiny occasion can cause a “storm”. The London riot has shown how fragile interracial relations are! For investors it means that they will have to consider this issue when making their investment decisions.
British Pound prospects:
According to the Department of Masterforex-V trading system , GBPUSD may come out of the range with a downswing – wave A. This wave will prompt the beginning of a long-term downtrend once it break below 1,6206. If it happens the closest support will be met at 1.6111 and 1.6003.
The long-term rally can be resumed if the currency pair breaks above 1,6616.
Market Leader and would appreciate it if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following question:
What were the UK riots – a spontaneous protest or a well-organized uprising against the system?
