May 2017 - A nice change

A nice change.

I can just about remember the first five pound note that came my way. It was a large white piece of paper, but why it came into my possession is a little obscure, except for the fact that my father gave it to me. Not that he was in the habit of passing such large sums of money over on a whim, but he was known to have a flutter on the horses every now and again, and very generous when he won. It was many years before I saw any sort of paper money again, which probably indicates he’d hit a losing streak! The ubiquitous ten shilling note being about the nearest I was to to get to rivalling Carnegie. Now some people carry money around in rolls like a perverse status symbol as the anonymous plastic card has all but made the folding stuff redundant. In fact, just about the only money you seem to need small change for is the bus, a supermarket trolly, or a coffee and a bun. Everything else appears to be available on the plastic card. Even theatres deign to take them. And certain ladies. It will all come to no good, I can tell you.

Why, was brought home to me a month or two ago as I tried to escape the dull periphery of Livorno with the petrol warning light blinking furiously. Most service stations now have a self service facility - once mostly used when closed. Now, even when open. Originally they only accepted bank notes. In future they will be credit cards only. The attendant was not amused being disturbed from his cigarette and newspaper. He charged me ten cents a litre more for pump service. Once it cost less for cash. This small example demonstrates that governments (or their agencies) will know how much you have spent, and how much the service station has gained; details to be entered in the appropriate file for eventual settlement. If you add this to every outlet where money is used to change hands, I can’t say I like the look of the future. Orwell wasn’t so hot on dates, but it seems he’d worked out the plot. Consider the ubiquitous news vendor. If the purchase of ‘The Corriere della Sera’ is linked to your credit or debit card, a government agency could determine your political views. Couldn’t they? And a whole lot else. Enjoy your cash while you can.

The old Medici bankers would turn in their graves. During the thirteenth to the fifteenth century banking was essentially a Florentine business. When a merchant wanted to send a hundred or so florins to England he had a direct line to a correspondent in Lombard street. There must have been a lot of money splashing about crossing the channel. In 1338 the banker’s Bardi and Peruzzi were creditors to that quarrelsome king, Edward the Third, whose longbow men destroyed the French and German armies at Crecy, and where the Black Prince gained his spurs. It didn’t cost Edward as dear as his enemies, but he still owed the Italians 1,365,000, golden florins he’d borrowed in 1338. At ten percent, and twenty carats fine, he was working overtime on the national debt.

I am reminded of all this by our first trip to Italy, when my wife began to feel a draught in her purse. We counted the paper, and panicked. Working in thousands of lire at a time, you tend to forget where the noughts are. “Never mind”, said a friend, “the Italians invented banking. They’re probably not averse to taking your shirt as collateral.” In retrospect, I can now see that’s how banks got into trouble in the first place. How to get out from under all that duff equity will need a bit more than a Treasury sorcerer. Today, only Berlusconi thinks he knows how, but I can tell him, it will take a little more than bringing back the lire. Even at the time I wasn’t so confident. I’d read in a pre 1939 tourist guide that a hotel with full board cost eight lire a night, and I don’t think anyone will be bringing that back either.

“We shall have to find a counting house,” said another. Right.

Cortona had a nice comfortable little bank that resembled a small office – that is, no bars on the windows, and clean looking young men in short sleeved shirts, and neatly pressed Chino’s, except they were just khaki drills in those days. Not a tie to be seen. Casual was how I’d describe them. “Worrying,” was my wife’s opinion, to whom casual didn’t equate with professional. Perhaps we were in the wrong place? No. The money was passing ‘to and fro’ over the counter, so we stepped up to it, and smiled. Hopefully. One of the young men smiled back, and asked if he could help. This wasn’t a Midland Bank in the high street. You could tell by his smile. His English wasn’t bad either. No, they couldn’t process a plastic card, just sterling, or a cheque. Sterling we had. Just enough for the journey home. Trusting an alternative theory to the maxim that a lady is never without her lipstick, deep in my wife’s handbag, underneath the ‘kitchen sink’, was the much abused sine qua non that women carry in case of ‘bargains’, a cheque book. Or apparently liquid salvation, if you believe that banks have rivers of money. Well, they did in those days. Triumphantly, the cheque passed hands. He placed it on his desk, and picked up the Financial Times, or perhaps it was the Sporting Pink, (I didn’t believe it either) scanned the pages and tapped the keys on a big office calculator, pencilled a calculation, and produced salvation. Used notes just to prove we weren’t being cheated. It was a better rate than our high street bank. Could anything be easier?

You wouldn’t believe it. Technology has seen to that. You use your plastic card now. All right, I know, the scruffy, greasy machine that’s a microscopic cesspit doesn’t charmingly smile at you, and it’s temperamental. But every corner has one. They’re absolutely foolproof, and open twenty four hours a day. One better than the public toilets, but not as clean. After trying to trick you with passwords, and delicate information that’s nobody’s business but your own, the machine snootily decides to throw a wobbly, ejects the card, and malevolently indicates they’re out of money! Serves you right.

The Sherlock’s among you will have noticed who had the cheque book. I have one, but it’s at least two banks old, with never a biro having sullied its unblemished pages, and still in pristine condition. One careful owner as the ‘tyre kickers’ say. It’s true. It’s never turned a wheel. I received it about two days before we opened a joint account, and then parked it permanently. I was sure my wife would look after the pennies better than I. Turned out that way. Having her own banking system helped. I never understood the mechanism. It wasn’t any sort of double entry accounting system you’d recognize - ins on one side, and outs on the other - having at least eight columns, some that went horizontally, if not diagonally. But it worked. I can’t remember a time when we ran out of cash.

At some point in this financial cycle, I developed the heart stopping émigré habit of watching the currency fluctuations. My groans encouraged an investigation of this phenomena by my wife. It occurred to her that one could manage our comings and goings by having some control over the scheme of things. To do that you need to manipulate your money. The catch is finding the right Currency Exchange specialists who deal in foreign exchange and personal currency transfers. Not so easy when you’ve got to trust someone with your cash on nothing more than a telephone call. Nowadays the web can be dodgy. I’ve heard it’s controlled by the CIA, so there’s no way of knowing who’s going old fashioned straight. Eventually settling for a company called ‘World First’ who ticked all the right boxes, the lady shifted gear. If you need to move money you can check them out. With her hands on the wheel, speed was everything. Changing money that is, by the second. Having her own private client dealer to consult was a positive move, along with the fact that personal currency transfers carried no fees, and enabled one to track the exchange rates with the precision of a laser. That probably clinched the deal. Only wish we’d had them when we bought our little patch of sunshine. You might not make a bundle of money, but you can, save a groat or two given that ‘foreign exchange’ goes up and down like a Yo-Yo, and pushing the button at the right moment is ‘bingo’! At least I don’t have sleepless nights feeling fleeced on account of the sheep.

The E.C.B is considering withdrawing the 500 Euro note by the end of 2018, the second highest currency denomination in circulation. I’ve rarely seen these behemoths, but understand that its removal wipes out 30% of the notional value of the currency in circulation. Apparently the Mafia love them. High value goods will have to be paid for by the plastic card – unless you’ve squirreled away a sack full of 50’s, which will add extra bounce to the mattress! They won’t be worried about that small Canaletto water colour of Venice, you bought at a local auction. That they’ll already know. What they’ll want explained is where you got the loot for that extra case of Antinori Solaia, sans receipt. “Cash, was it sir. Please step into the office.” Things have got to add up. It’s no good sending your sons to Eton anymore, if you declare you only earn fifty thousand pounds a year! The Treasury is good at sums, even if it has a job balancing the books.

Things have moved on. Once there were no alchemists creating gold out of a base metal, but there were governments creating paper money out of thin air. Now they’re going to force us to live in a vacuum from which all money will have mysteriously vanished. They should be told. Going back to the Gold Standard would put it all to rights. The Government wouldn’t be able to fiddle the books, and pigs might finally fly!

Receipts are what count on the long peninsula too. The financial police are everywhere, only a nod away from the castor oil and the bludgeon. Exiting a restaurant or a bar in Italy without a receipt, could see you pay for the most expensive Espresso digestivo on earth. Worse for the proprietor of a restaurant, closed for a month or two, windows papered up, and official looking tape across the entrance. Think of all that Tirami Su, going to waste! All for the price of a coffee. Governments mean business, especially when it’s yours.

But money makes the world go round – even if not for much longer. A contact in the financial business, used to the stuff, told my wife that you don’t need to fuss about cash before you travel abroad. What you need is a plastic card from a Travel Currency Exchange. Not any old card, or any old exchange, of course, but one that transfers money using real bank exchange rates automatically converted into the local currency, using ‘spot’ interbank rates. Everywhere, just about – except Russia and the Antipodes. You can top up your account on the move, given the required notice. Sounds the business. The company he mentioned is called ‘Revolut’, which makes me wonder why Russia is still out in the cold. Why drag me into this, anyway? He probably thought, there can’t be that many old dinosaurs out there with a phobia about plastic cards. He shouldn’t bet on it.

Money turns out to be a big worry. Doing away with it only makes matters worse. Even the Italian banks are letting us down. Where is the old spirit? And where has all the money gone? Perhaps it’s the fault of too many ‘Foundations,’ a particularly odd Italian banking appendage hung over from the days of Papal power when making a bob or two was Satan’s work. It was supposed to benefit the local medieval citizens by shifting some of the money the banks were making onto charitable functions. All it did was make the money go round faster than Revolut. The Clinton’s apparently considered it a neat operation, and gave it a fling, until someone suspected they had their fingers in the till. What do you expect? With a new broom supposed to be sweeping everything clean, lawyers are punching the air everywhere. Even ‘the people’ were beginning to think they’d need a few more judges to put all the villains away. More likely, it’s just another cuddly association, depending on who the President knows. You can bet, it won’t include me. I wouldn’t be surprised if it was a bank that invented brown envelopes. Hmm! Forget what I said about governments fiddling the books. The pigs will never get off the ground!

It’s perfectly true that the oldest extant bank in the world, the Monte dei Paschi di Siena, started out life with an excellent philosophy: lending money to its citizens at no interest. Don’t spread it around. Everyone liked it, but it really couldn’t last. Especially when the Papacy decided to go it alone during WW2, due to Mussolini going off the rails. They were pretty upset, thinking they’d got a deal that might suddenly turn out to be worth less than junk bonds. So they polished up the old maxim, ‘if you can’t beat them, join them’, given that Peter’s Pence was a non sequitur after Henry threw a spanner in the works. Making a profit became the norm. Even in God’s name. They salted away fortunes before the Banco Ambrosiano collapsed, and Archbishop Marcinkus did a runner.

Meanwhile, MPS were on a roll. The out of control sort. In modern times it overindulged the political parties of the left, along with local jamborees for the citizens, and free coffee-table sized books on art for good customer relations. With three or four of those, you could dispense with the table.

Now we all have to pay for their largesse with a state bailout. And no interest!

I can hear you now. “Just like the old days.”

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