17/04/2013 Newsnight


17/04/2013

With Jeremy Paxman. Margaret Thatcher's funeral, an interview with Mario Monti and the latest from the Boston bombings investigation. Plus, what is behind the fall of gold?


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$:/STARTFEED. With all the pomp and circumstance of the state, Britain

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said farewell to the first female and most contentious Prime Minister.

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Everyone said it was a distinctly British affair, something that only

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we can do. Why do we do it like this? The rituals of the church,

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whose pews are largely empty, and in the shadow of an empire that no

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longer exists, what does it tell us about ourselves that this is how we

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deal with the fate that awaits us all. El We have assorted members of

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the establishment here to illuminate us.

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Confusion regins in Boston, have the authorities identified a

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suspect? In this case all that glitters is gold. Why has the value

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of gold dropped 10% in the last few days?

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It was an impressive send-off. There were flag, there were

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military bands, there was Celestial coral music in a Cathedral filled

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with faces more jowlly, more grey- haired and more frail than when we

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saw them making the weather. Even her enemies agreed it was

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impressive jib, though they may have thought of the cost or whether

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she deserved the obsequies at all. It wasn't an event that told us

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much about Margaret Thatcher, but it told us a lot about us.

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Big Ben's last chimes this morning, then the busy world hushed. The

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fever of one life over, Margaret Thatcher's work done. This morning

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Britain and Baroness Thatcher went back in time, the start, a crypt in

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parliament where she entered life in the realm, and into a stately

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funeral. Military, imperial, Christian. When Britain has become

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less all those three things. The road rang to brass, but also the

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sound of thinking, people reflecting on her. Few audible

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conclusions. From the parliament of her autumn years, past the law

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courts where as a young mum she trained. There was a bank of modest

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applause and some islands of protest. (boos) Then lastly a

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symbol of her youth, St Paul's, the icon of World War II fortitude that

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defined a teenage Margaret Thatcher. "you seek his architect", the son

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of Sir Christopher Wren, look around you. As the former Prime

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Minister's body was delivered to the church she would have seen her

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monument, many political generations still, in part, defined

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Through hymns and readings, through burial rituals, a society tells

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itself a story about who it thinks it is. The elements today were

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classic fare for a Christian service, but they contained their

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messages about who Margaret Thatcher thought she was too.

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on the whole armour of good. That ye may be able to stand against the

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wilds of the devil. For we wrestle not against flesh and blood. But

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against principalties, against powers, against the rulers of the

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darkness of this world. Margaret Thatcher wanted the Prime Minister

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of the day to read this. Let not your heart be troubled, ye believe

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in good, believe also in me. In my father's house are many mansions,

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if it were not so I would have told you. I go to prepare a place for

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you. If ritual necessarily see-saw tradition. There was an attempt to

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debunk the myths from friends like this. As she said from the great

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truth we do not achieve happiness or salvation in isolation from each

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other, but as members of society. Her later remark about there being

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no such thing as society has been misunderstood. And refers, in her

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mind, to some impersonal entity to which we attempted to turpbter our

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independence. -- surrender our independence. It appeared to be

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during the sermon, but it may have been just the occasion itself, that

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saw the Chancellor of the Exchequer Margaret Thatcher believed herself

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to be framed by war. She was the last of Britain's prime ministers

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born before the Second World War, and she had her battles too.

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Victory in the Falklands saw shaky control over mutiny in cabinet made

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rock solid. As the military is cut back today, does the central

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trality to our national occasions As the service drew to a close, the

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Queen accompanied the congregation out to bid a final farewell to one

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of her 12 prime ministers. But also Britain's first female one. It was

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noted that she is unlikely to ever do that again. Beginning with

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Princess Diana's funeral, the Queen Mother's and now Lady Thatcher's,

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with a royal wedding along the way. What do our three funerals and a

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wedding tell us about ourselves. Or an emotional low- controlled nation

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we have become rather emotional. There was no clapping at

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Churchill's funeral. For is it that we are all historians now, phones

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and iPads commemorating occasions just because they K regardless

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today was the first -- they K regardless today was one of the

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first occasions they can. A nation taking refuge in a comforting

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ritual in a time of austerity. Because of what Thatcher stood for

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it wasn't for everyone today. Today we said goodbye to our first female

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Prime Minister, we buried a person and an era too. To try to make

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sense of the ritual, we have created a small cold frame of

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sprouts of the establishment. A Baroness, a professor, and a canon

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and a law Lord and a major general. Giles Fraser, turbulent priest was

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a canon of St Paul's until his resignation in 2011 amid the row

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about the Occupied protests on his doorstep. Lord Dobbs was Chief of

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Staff under a period under Lady Thatcher and went on to write House

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of Cards. Linda Woodhead is a professor at the University of

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Lancaster. And Matthew Sykes knows about pomp and ceremony, he's the

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honourary kur national of the Royal Horse Artillery who accompanied

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Lady Thatcher's coffin this morning. Lady Trumpington I would imagine

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you were at a few funerals in your time. You were in St Paul's today

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what was it like? I thought it was wonderful, I really did. It was a

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sea of people in black. It was an amazing sight. I think they put a

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hell of a strain on her granddaughter, and I thought she

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did jolly well. She did a great rendering of those difficult words.

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I thought the Bishop of London was splendid and very funny at one

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point, which was a relief to some of the congregation, me included.

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Who did you think the service was for? Who did I think? What did you

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think it was for, for whose benefit? I think it was a genuine

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feeling that went out. It couldn't have been sparked artificially. In

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point of fact when it did happen I think we do this sort of thing

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better than any other country. did you think of it Giles Fraser?

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The question about who it is for is really interesting, it used to be

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for the dead, now it is for the living. That is true. That sort of

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thing has changed in funerals, funerals used to be about the dead

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person, now it is about how it comes across to the living. I think

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today's funeral was a state occasion and it was the state was

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almost centre stage in it. It was celebrating the establishment in a

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way I felt slightly uncomfortable, the church, the military, the BBC

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all in perfect harmony with each other. I did have a slight sense

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that actually it was slightly ironic that somebody who spent all

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her political life arguing for a small state would actually end up

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having the state as the star of the show at her funeral. You wouldn't

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have enjoyed G 4 also parading? that was a funny joke going around

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about it being privatised. It was a lot of money for the event.

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were there, what did you think? thought it was an extraordinary

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occasion, I think it is the end of an era. I don't know if we will see

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this again apart from a senior royal. I can't see circumstances

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for which another Prime Minister to be sent off in this way because

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prime ministers like Margaret Thatcher and Winston Churchill are

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very rare indeed. You have to wait a generation or for more those

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buses to come along. It gave Tony Blair an idea or two today?

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might say that but I'm certainly not going to comment on that.

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with the plugs. But any way. Inside the church is emphasised how broad

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her reach had been, how many years she had an influence and how big a

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family of those who loved her. at how it was done, it tells us a

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lot about ourselves. You said it was for the people who go on, we

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chose to do it through the military, much of it, why is the military the

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default mechanism? A hangover from the Falklands, sorry.

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involvement of the military in these sorts of occasions has gone

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on for hundreds of years. It is how we do it.

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We are a very different country. still do ceremony very well, as

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Baroness Trumpington, I'm biased, but we do it better than anybody

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else in the world. All other countries do the same thing. They

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all have ceremony and they all involve the military. With the

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greatest of respect, let me put it frankly, you are the honourary

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Colonel of a unit whose main function is running around in

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London parks making hangs on cermonial occasion. Is that not

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true? That is more or less an unfair summary of what The King's

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Troop does? Yes, but every single person in The King's Troop is a

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soldier first and foremost. What is it for? And sailors and airmen.

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What is it for? What do we have the Armed Forces for? We know what the

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Armed Forces are for. What is the representation of the state through

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the military on an occasion like this about? It is about celebrating

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what we do as a country. We, The King's Troop artillery, we are not

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the only cermonial troops, we have the Household Cavalry, it is part

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of the bands of the nation. It speaks out around the world. It is

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some of the best advertising for this country we could have had.

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Surely there is a better purpose to our existence than advertising

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ourselves for the tourists? We have to look at the tourism figure, we

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are out there in a competitive world. This attracts dozens and

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thousands. This was a sacred ritual apparently? It is an expression of

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who we are and what we are about. Why we are so attractive. This is

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somebody dying and going to meet their maker, it is not a PR

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exercise. It is not a PR exercise but a message to the rest of the

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world. That sounds like PR. have a narrow view of PR. It is a

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ritual, rituals do something. speak as an antthro polygamist.

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Rituals are a framing mechanism and focusing lens, they give us time to

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get our emotions together, to reflect, to stand back and see the

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significance of something, to feel things you wouldn't otherwise feel.

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To put things into perspective. All cultures need rituals, we do it

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extremely well. Actually it wasn't just tradition. There are elements

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of innovation in that. Britain is the great ritual innovator. We

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change our rituals the whole time. What was it about today's ritual?

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The ceremony Monday was incredibly contempry it didn't do the ritual

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things, talking about resurrection, it talked about her atoms being

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caught up in the cloud of good. clergy talk within the age? If you

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look at the Book of Common Prayer Protestant funerals are about the

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repentance of sin, we didn't have very much of that. There were too

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many sinners! The place was full of them! It is really hard to do a

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ritual well, because it has to be entirely appropriate and feel

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genuine to the occasion. That felt genuine to her. We didn't do it

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like for the royal wedding or Diana. We are good at getting the tone

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right for the particular occasion. They are not exactly equivalent

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instances. I mean the Diana funeral was totally different. That is what

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I mean, we are good at getting the ritual right for the particular

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event. It was a different atmosphere for a totally different

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situation, which had very little regard for the family. The royal

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wedding, the lijics, this country is on -- Olympics, the country is

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on a run as far as these things are concerned. If you look at something

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like the Olympics, the message there was much less military, it

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was more joyful. This was a funeral afterall much that was a public

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sporting event. They are different and it looked much more 21st

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century that. You would agree I'm sure? Funerals are changing. Normal

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people's funerals, over half now have a tone of celebration rather

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than morning. There is a lot of joking, there is hymns less common

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than popular songs, Always Look On The Bright Side of Life. That

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wasn't reflected in this service, but that is inappropriate for

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Margaret Thatcher. I'm doing a funeral tomorrow and they are going

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to have Waterloo Sunset. What will you choose for you one? A simple

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one, it is about you going to meet your maker, a person in a coffin

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going to meet their maker. I think all of this pomp and stuff is a

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form of misdirection. You are not Mrs Thatcher. No I'm not thank

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goodness. You could aspire? could! Are you worried any of you

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about some of the imperial overtones, we are no longer an

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imperial nation except at a minor level. Does that trouble you, I

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imagine it probably did? It was a work of nostalgia, so much of it

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seemed to be a work of nostalgia. All funerals. What are funerals if

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they are not works of nostalgia, that is what we sawed today. A

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woman who learned her politics hiding from the bombs under the

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able in Grantham during the blitz, during her homework and listening

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to the speeches of Winston Churchill. This is a former

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nostalgia going back even before then, that is not what a funeral is

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for. A funeral is an occasion in which somebody goes to meet their

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maker. It is not about trying to celebrate and rehearse all the

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values of the state, which is what this ended up egg being.

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understand why you are grinding the axe you are -- Ended up being.

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understand why you are grinding the axe you are. For theological

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reasons. Because you are a believer. We were in church here. Could you

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have a secular funeral which had no military or imperial overstones

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nowadays? A secular funeral is hard to do you end up speaking nice

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things about the person who died you end up doing this. I didn't

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agree with Mrs Thatcher at all, I would have been perfectly happy it

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take the service, it is not about whether or not you agreed with them

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or not, it is about going to meet your maker. A secular funeral is

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harder. They are ghastly. I went to one, a learned and extremely

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eminent professor died, you went to the service and each person spoke

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and it was the most utter rubbish you have ever heard in your life.

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And it had no sort of Centrepoint. I think the whole point of a

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service really is to bring in a little bit about the normal

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thinking of ordinary people like me. Can you imagine a big state

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occasion that did not have a military expression? I suppose I

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could imagine one, but why would we not want to have the military

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present. Because they play such a marginal role in our lives? I think

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they play an important role in your lives. Everyone agrees the military

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is important, but they are a minority pursuit in this country

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now. The military experience is not. You can't say that. It was

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generalised in the era of conscription. We may have reached

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the point where there are more people in the BBC than the Armed

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Forces. Only a question of time I'm sure. That doesn't make it a

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minority role, it is extremely important role for the security of

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the country. I'm not sure I understood what you meant earlier

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about the imperial, what was imperial about today? I didn't see

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anything imperial at all. Giles Fraser is raising his eyebrows,

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explain? It may be difficult. I though everything about it was. I

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thought so much about it was a celebration of the values of empire

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and establishment and so forth. You know I'm not necessarily condemning

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all of that, I'm just trying to say that at the heart of a funeral is a

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very, very simple thing. To use it as an occasion for celebrating all

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those value is not necessarily the right thing. Even in the church

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there is ceremony. Particularly, we are best at it. We follow a common

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book of prayer and a service that is a framework that has been

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described for us. This is a framework for a public event.

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will give you one example, the Gurkha pallbearer. Rituals are

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necessarily about power. They empower those who take part. They

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empower the ones who celebrate and the person you are focusing on. It

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is a symbolic way of marking that. In a way Mrs Thatcher is a

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superhuman figure, she's a mythological figure, like Diana and

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the Queen. We have these amazing women. What a nonsense it would

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have been for Margaret Thatcher to be buried without a military

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presence. Afterall her Premiership was very much about military

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adventure. Whether or not you like it. That is part of the fact. You

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can't avoid it and cover things up simply because it happens to upset

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a few demonstrators. People were applauding from the moment that

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coffin left Westminster until it got to the church. The applause was

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very interesting. It is not really a common thing, you wouldn't have

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supposed it to be a common English reaction at the funeral, we were

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told it didn't happen at Churchill's funeral. But it was a

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spontaneous reaction. People were genuinely excited. My theory is

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because people don't wear hat any more. What? In the old days, no, in

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the old days even you may have read of people doving their hats to a

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coffin -- doffing their hats as it passed. We don't have that so we

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clap. You do things with your body, you have to do something dramatic,

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I agree. This whole debate is slightly misplaced, because death

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is the one thing, it is the one thing somebody else can't do for

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you, it is a point Hiedinger made, it is a singular, private

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individual. It is about one person, the idea it becomes this huge great

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big public thing misses that very, very essential thing theologically

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speaking you preparing to stand before good and meet judgment in

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that very old fashioned speak. This is not, and when we start and end

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up talking about the mill and all the other things and the

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establishment and the bishop eating duck pate in the way which the

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establishment talks to itself. I wanted there to be slightly more

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about things about forgiveness and about those last rites. That might

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be fine for your funeral but Margaret Thatcher wrote her own

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funeral service so I understand. This was all about Margaret

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Thatcher. It is about myth. I think that is exactly right it was about

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Margaret Thatcher. What don't you think? I don't think she wrote her

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own funeral at all. I don't thing her mind worked in that kind of way.

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Damn it I knew her as well as most people.

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Don't you come back here with your Know among the various foreign

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bigwigs attending Margaret Thatcher's funeral today was the

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Prime Minister of Italy, Mario Monti, Mr Monti got given the job

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when Silvio Berlusconi left to spend more time with his lawyers.

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Mr Monti is one of the grand old men of the European political class

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and therefore you might expect him to be pretty cool on Mrs T. He

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isn't though. I hooked up with him after the funeral. Prime Minister

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what was it that you admired about Mrs Thatcher? Clarity of vision,

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sometimes oversimplified but a political leader needs that

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oversimplification. Stern determination. That's about it. But

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it is a lot. I have heard you sometimes described as Italy's

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Thatcher! Do you recognise the characterisation? To some modest

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extent yes, because well I have always been convinced and I tried

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to practice now in Government for one-and-a-half years, that some

0:25:020:25:09

principles of the Thatcher model of governance were good. For example

0:25:090:25:14

not to allow too much room for corporatisim. What do you think you

0:25:140:25:24

most learned from her? The space to be given or to be created for well

0:25:240:25:34
0:25:340:25:34

functioning markets. Which means the containment of oligotistic

0:25:350:25:41

powers of union and business. The notion that market needs to be as

0:25:410:25:48

wide as possible. Now Mrs Thatcher is not credited having been a

0:25:480:25:54

strong supporter of integration. I have many criticisms to her in that

0:25:540:25:59

respect. She was the biggest promoter of one key thing of

0:25:590:26:03

European integration, that is the single market. Wasn't she right

0:26:030:26:09

about the limits of national feeling that we don't live in a

0:26:090:26:13

Europe where there is a feeling common among all the peoples of

0:26:130:26:18

Europe that there is a desire for a European state, but people feel an

0:26:180:26:20

identification with their own country and it will be a very, very

0:26:200:26:25

long time before they feel an identification with the bigger

0:26:250:26:29

political entity. One must be cautious because if that is the

0:26:290:26:35

criteria on what just simply is what people want in terms of

0:26:350:26:40

geographical identification, not in Margaret Thatcher's time, but now

0:26:400:26:46

in many of our countries. People would like to have a sub-national

0:26:470:26:56
0:26:570:26:57

identification, regional or you know populistic localism is on the

0:26:570:27:03

increase, and should we accommodate for that and effect a company

0:27:030:27:07

process of actual European disintegration. I'm not sure.

0:27:070:27:13

in her analysis, this sense of where people feel they belong was

0:27:130:27:18

at odds with the scheme, the great conception that most of the

0:27:180:27:22

European political class had. That was one of the key things that her

0:27:220:27:26

analysis stood upon. In that respect you were on the opposite

0:27:260:27:32

side of the fence to her, weren't you? Mainly the European

0:27:320:27:37

distinguished politicians were opposite to her. Actually I have

0:27:370:27:46

always been eccentric in policy thinking in Europe. I'm deeply pro-

0:27:460:27:53

integrationist, but giving huge emphasis to the market integration,

0:27:530:28:00

to the single market. Less to other aspect. So for example this is very

0:28:000:28:06

recent, one year ago, there were debates in the European Council on

0:28:060:28:12

what to make of the single market in terms of an instrument for

0:28:120:28:22
0:28:220:28:24

growth in Europe. I can say that David Cameron and I were the two

0:28:240:28:29

consistently stronger advocate of achieving more single markets in

0:28:290:28:34

Europe. This is not necessarily a French attitude for example. When

0:28:340:28:40

you heard her anxieties about the power of reunited Germany and the

0:28:400:28:47

geographical position in the centre of Europe and the now enormous

0:28:470:28:54

economic power, do you share any of those worries? To some extent and

0:28:550:28:59

that is why as an Italian and continental European I have always

0:28:590:29:03

thought it would be good to have Britain firm low and solidly within

0:29:030:29:07

the European construction. Which needs -- firmly and solidly within

0:29:070:29:11

the European construction which needs a balance of powers not an

0:29:110:29:16

excess of powers by anybody. Do you think she was right to worry about

0:29:160:29:23

the position and influence of a powerful Germany? Yes. But that was

0:29:230:29:31

a bit in my view of a retrenchment attitude. If Britain, since her

0:29:310:29:35

times and then subsequently would have been able to really be at the

0:29:350:29:45
0:29:450:29:48

core of Europe, we wouldn't have seen that asymmetric increase of

0:29:480:29:54

powers of Germany. From where you sit looking at Britain now, and

0:29:540:29:58

looking at the eurozone, do you foresow a day when Britain might be

0:29:580:30:08
0:30:080:30:14

in the eurozone? It doesn't look to be imminent. You can say that

0:30:140:30:18

again! Much confusion in Boston tonight, which even included media

0:30:180:30:21

reports that a suspect had been arrested in connection with the two

0:30:210:30:26

bombings of the marathon a couple of days ago. The reports were later

0:30:260:30:30

denied, then there was talk of a full briefing on what was happening.

0:30:300:30:37

A time of set and then everyone was told had had been postponed

0:30:370:30:41

indefinitely. The one certainty is the President is expected in the

0:30:410:30:45

city tomorrow to join a religious service. What is the news then

0:30:450:30:51

Mark? Well, as you were saying Jeremy this is a day in which the

0:30:510:30:57

inquiry has insisted that it has made substantial progress. We

0:30:570:31:03

understand that this centres around an individual who was isolated in

0:31:030:31:07

CCTV or security camera pictures, taken from a department store

0:31:070:31:12

opposite the bomb area. Now this individual was seen to place a bag,

0:31:120:31:17

he was identified, this is what sparked the frenzy of speculation

0:31:170:31:20

today, including the idea that a person might be about to be brought

0:31:200:31:24

into the court in order to be charged. That all proved to be

0:31:240:31:29

false. The authorities still insist they have made progress and they

0:31:290:31:34

have identified this individual. But the postponement of an FBI

0:31:340:31:39

press conference here this evening cost doubt even on that achievement.

0:31:390:31:44

There was a scare even at the White House today I believe? There was.

0:31:440:31:48

There was a package identified and it was then confirmed by the

0:31:480:31:52

authorities that it contained ricin, the poison. This is one of those,

0:31:520:31:59

if you like, do-it-yourself- biological weapons that can be

0:31:590:32:06

cooked up at home and it is toxic. It follows the senting of ricin to

0:32:060:32:10

a senator, that was also confirmed by the authority. There do seem to

0:32:100:32:17

be a lot of security incidents in the country, in Oklahoma the

0:32:170:32:21

courthouse where the suspect was due to be arraigned was evacuated

0:32:210:32:25

this afternoon. You see signs across the United States of a fair

0:32:250:32:30

bit of jumpiness, people responding to suspect parcels and bags left on

0:32:300:32:37

their own. It has made for a jittery atmosphere hereed today.

0:32:370:32:43

It is mine all mine, actually it isn't. We borrowed it for a few

0:32:430:32:49

hours. These ten bars are worth between about �300,000 or around

0:32:490:32:55

that. The interesting thing is that last Friday they were worth

0:32:550:32:58

�340,000. It is still a huge lot more than Gordon Brown manage when

0:32:580:33:03

he sold off much of the national reserve at the lowest price in 20

0:33:030:33:08

years. Since then it soared in value as a supposedly safer place

0:33:080:33:11

to keep your money. In recent days people seem to have fallen a bit

0:33:110:33:21
0:33:210:33:22

out of love with it, why? Some people life like to live in or

0:33:220:33:28

drive their wealth. Others like this man, from India, like to wear

0:33:280:33:34

their's. This garment has a value of $250,000, it was worth that much

0:33:340:33:43

last week. It might be worth a paltry $2020,000. The shirt appears

0:33:430:33:51

to be gauche for you and me, but he's in good company. From Goldie

0:33:510:33:58

to lady GagGa's wheelchair, golds been across the centuries. It is

0:33:580:34:03

always seen as a safe haven, place to store wealth in the event of

0:34:030:34:10

economic crises. The price of gold was pretty uneventful up to 2007,

0:34:100:34:17

hovering at $350 an ounce. When the shine came off global banks and the

0:34:170:34:27
0:34:270:34:27

single currency, it rose 216%, reaching a record high of $1,600

0:34:270:34:35

dollars. It has been a retreat ever since. It lost 9% on Monday alone,

0:34:350:34:41

its biggest-ever one-day fall. So why has gold taken a cold shower.

0:34:410:34:44

Many people feel it was overpriced in the first place and needed a

0:34:440:34:48

correction. Another reason iss rising prices or inflation. Gold

0:34:480:34:52

was always seen as protection against that. But of late, global

0:34:520:34:56

inflation has been tame. Then there is the optimistic reason, apart

0:34:560:35:00

from Europe, the global economy is starting to recover. Gold may

0:35:000:35:05

longer be needed as much as a safe haven. As for the trigger for the

0:35:050:35:11

most recent gold sell-off, the eurozone might be to blame again.

0:35:110:35:16

An EU report suggested that tiny Cyprus may have to sell reserves to

0:35:160:35:22

pay debts. While Cyprus's 14 tonnes of bullion are negligible. A

0:35:220:35:28

potentially fire sale of gold of equally troubled but reserve rich

0:35:280:35:34

Portugal, Spain or Italy, has spooked the market. Italy with two-

0:35:340:35:38

and-a-half thousand tonnes is the world's largest. Gold went too high

0:35:380:35:42

in the first place, it was a function of that mad panic of three

0:35:420:35:46

or four years ago when people thought that the world was coming

0:35:460:35:49

to an end, there would never be a recovery, there would probably be

0:35:500:35:54

war. It got out of hand. The second reason is, I think, over the last

0:35:550:35:58

three to four month people have started today realise that actually

0:35:580:36:02

the world economy is recovering. The conspiracy theorists have, you

0:36:020:36:08

guessed it, a rival theory for the big sell-off. Rumours have

0:36:080:36:12

circulate that a massive short bet was placed against gold last week

0:36:120:36:19

that forced prices down. If 500 tonnes or 16 million ounces had

0:36:190:36:23

been sold short, when then the gold price fall was artificial and gold

0:36:230:36:29

could resume upwards. It is just a blip. I don't see any factors that

0:36:290:36:32

affect the fundamentals for owning gold and the prices to keep on

0:36:320:36:38

rising. The macro economy hasn't fixed itself, even though we hear a

0:36:380:36:43

few per cent here and there on GDP. People see the money in the bank

0:36:430:36:47

being devalued, currencies are debased through quanative easing

0:36:470:36:51

and other measures. I don't see that the man on the street thinks

0:36:510:36:56

the economy is fixed and he doesn't have to worry about money in the

0:36:560:37:00

banks. In the era of cutback, perhaps Britain should sell off

0:37:000:37:05

some of its gold reserves. Alas there is not much else to sell.

0:37:050:37:14

That is because between 1999 and 200 2jorbd sold off half of

0:37:140:37:19

Britain's reserves, as $275 an aounce. If the Government had wait

0:37:190:37:24

-- an ounce. If the Government had waited ten years they could have

0:37:240:37:28

sold it for seven-times the price. Oh how the current Chancellor could

0:37:280:37:38
0:37:380:37:41

have used �16 in today's prices. Sadly these aren't hours, they are

0:37:410:37:47

on loan from BullionByPost. The world's central banks have been the

0:37:470:37:50

largest losers from the gold price fall. It has been the sustained

0:37:500:37:55

printing of new money, or QE, which central banks, that forced many

0:37:550:37:57

investors to buy gold in the first place.

0:37:570:38:03

We are joined now by a true believer in gold, the financial

0:38:030:38:06

commentator Max Keiser and the gold sceptic, Daniel Knowles, from the

0:38:060:38:11

economist. Are you buying or selling? I'm a buyer, a big buyer,

0:38:110:38:15

very bullish on gold. If you look at the context of the sell-off, it

0:38:150:38:20

doesn't change the story of gold, I'm a boir. That implies you think

0:38:200:38:25

-- A buyer. That implies you think it will not only recover but

0:38:250:38:28

carrying on going? Absolutely. If you look at what happened in the

0:38:280:38:33

last couple of days. It started in Japan. Gold reached a 40-year high

0:38:330:38:38

in yen terms. That set alarm bells bringing in central banks around

0:38:380:38:41

the world. They are trying to manage their currencies against

0:38:410:38:46

gold. Gold is a barometer that tells them they are doing a bad job.

0:38:460:38:51

Once gold spike up in this way, panic bells rang and they went

0:38:510:38:57

after gold. Stkpwhrp explain this to us. We a-- Explain this to us,

0:38:570:39:01

we abandoned the gold standard years ago? The only reason it has

0:39:010:39:06

value is it always has, people buy it because other people buy it. It

0:39:060:39:11

has uses in jewellery, but for the most part it is an investment that

0:39:110:39:18

is a bet on civilisation collapse. Looking at the gold standard

0:39:180:39:23

question since 2009 central banks have been buyers of gold for the

0:39:230:39:27

first time in decades. They don't trust each other. Cyprus are

0:39:270:39:31

talking about selling their gold, although there is not a formal gold

0:39:310:39:34

standard, there is an informal gold standard. The central banks are

0:39:340:39:38

saying the only way to keep the price parity with the other

0:39:380:39:43

currencies is by keeping the price of gold down. We saw it on Friday,

0:39:430:39:48

500 tonnes of paper gold sold, panic selling. We have some over

0:39:480:39:52

there, never go anywhere without it, that is just a bit of shiny

0:39:520:40:00

mettleia. That is all it is? are the central banks tripping over

0:40:000:40:04

themselves to buy gold they don't trust each other. It is a

0:40:040:40:07

conspiracy theory. Last year more than ever before hundreds and

0:40:070:40:11

hundreds of tonnes, I tell you two countries in particular interested

0:40:110:40:17

in gold are Russia and China. Because they see that in the US.

0:40:170:40:22

This is not a story, it is not central banks selling it. They are

0:40:220:40:28

boiing it. It is not central banks selling it. The thing that has been

0:40:280:40:31

driving gold up is things like exchange traded funds. People have

0:40:310:40:35

been seeing the fact that gold is going up and they are buying it as

0:40:350:40:39

an investment. Buying it as a speculative thing. There are all

0:40:390:40:42

sorts of financial innovations that allow you to buy gold in your

0:40:420:40:47

pension fund and all of a sudden people are panicking. The big sell-

0:40:470:40:53

offs have been privately held gold. The lines outside gold buying shops

0:40:530:40:59

are long. People are taking advantage of the discount and

0:40:590:41:04

buying it. But there is those rushing to sell T the great big

0:41:040:41:10

drop has not been caused by banks. Tell me why is it a good way of

0:41:100:41:13

storing wealth, why do people believe it to be a way of storing

0:41:130:41:18

wealth? There is not very much of it. It is quite easy to carry round.

0:41:180:41:21

A block like that we have over there is worth several thousand

0:41:210:41:28

pound. You can divide it up and it is easily measurable. Historically

0:41:280:41:32

there are good reasons why it is currency. As a civilisation we have

0:41:320:41:38

moved past that. The central banks and the two too big to fail banks

0:41:380:41:42

don't trust each other, that is why they are not lending into the

0:41:420:41:45

market place. They want to hoard the cash. The British Government is

0:41:450:41:50

in quanative easing and the banks are hoarding the cash, they are not

0:41:500:41:53

lending to the market, they don't trust them. The balance sheet of

0:41:530:41:57

the too big to fail banks are horrible and they require another

0:41:570:42:02

huge bail out. They are looking to buy gold to hedge themselves of

0:42:030:42:10

what they see as an emerging crisis. Is it a bet on collapse? It is an

0:42:100:42:15

asset that has no counter party risks, all the other banks do. The

0:42:150:42:22

balance sheets from the big two of the four big banks are highly

0:42:220:42:26

questionable. There is objective fact we can fod in here. If you

0:42:260:42:31

live in a society -- feed in here. If you live in a society where a

0:42:310:42:35

bank is ordered by a Government not to pay out money that is your money,

0:42:350:42:41

may not be allowed to bring it back to you without applying a surcharge,

0:42:410:42:46

then of course gold becomes attractive? If I lived in

0:42:460:42:50

Afghanistan in 1979 and I was leaving and the Soviet tanks were

0:42:500:42:54

raiding. If I lived in Germany in 1939. I don't believe it is

0:42:540:42:57

happening, it is happening in Cyprus. I don't believe this

0:42:570:43:03

argument that Europe is about to collapse. This man is a paper bug,

0:43:030:43:07

he believes in any paper but he doesn't see the reason. Let as

0:43:080:43:10

address the question about the security people feel about money?

0:43:100:43:16

It goes up in times of people being less trusting an Government. In the

0:43:160:43:20

last few years as the recession has hit there have been reasons to

0:43:200:43:24

worry about the state of financial system. That has pushed it up. We

0:43:240:43:29

have had five years now, the euro still hasn't collapsed. These have

0:43:290:43:33

been overplayed. Do you understand leaving m this whole economic

0:43:330:43:36

question about banks aside for a second. What is it about gold, the

0:43:360:43:43

foal of gold, the look of gold, the luster of the stuff that appeals so

0:43:430:43:50

lovely to us? It is a shiney matter. It goes back to Aristotle who

0:43:500:43:55

declared gold is suitable for money. It is simply the financial value,

0:43:550:44:00

its transactional value. It is not to do with anything intrinsic to

0:44:000:44:06

the colour or feel? This is the amazing point you hear in debates

0:44:060:44:10

like this, they will say, especially on this network that

0:44:100:44:17

gold has no instrinsic value, yet the very essence of gold is the

0:44:170:44:22

intrinsic value. It has come out of the ground? That is because it was

0:44:220:44:26

capped. They will never say they won't accept gold but they might

0:44:260:44:30

say they won't accept the British pounds or American dollars. They

0:44:300:44:36

will take gold, it has value. is not because it has intrinsic

0:44:360:44:44

value, it is because the unit has value. It has rarity, sparesity.

0:44:440:44:51

is social constructed by, as any currency is. Here is the British

0:44:510:44:56

pound the value is being debased every single day. The British pound

0:44:560:45:01

has got a lot more valuable relative to gold. Is that why

0:45:010:45:08

prices are up 8%. (both speak at once) There is obviously something

0:45:080:45:11

in the water tonight, I don't know what it is. Thank you all very much,

0:45:110:45:15

both of you. It seems like about 12 of you, but thank you both very

0:45:150:45:19

much. Apparently they want me to read you out tomorrow morning's

0:45:190:45:29
0:45:290:45:42

front pages. I can't think why it That's enough from us, Gavin will

0:45:420:45:52
0:45:520:46:19

$:/STARTFEED. Good evening, a real buffeting from the wind during the

0:46:190:46:24

night. Heavy rain crossing many north western areas, still with us

0:46:240:46:30

us first thing, Very gusty indeed in northern and the Pennine. Then

0:46:300:46:34

sunshine and showers. Those showers starting across northern and

0:46:340:46:38

western areas, migrating east with time. Hail and thunder in those

0:46:380:46:42

showers, a gusty wind going on. It will be fresher during the day on

0:46:420:46:45

Thursday across southern and eastern areas compared with the day

0:46:450:46:49

just gone. Showers hanging around across the south west of England

0:46:490:46:52

into Wales and the afternoon. Certain low a very wet start for

0:46:520:47:02
0:47:020:47:03

some of us here first thing in the morning. Simply across the country.

0:47:030:47:07

Wet and windy through the night and to start on Thursday. Sunshine and

0:47:070:47:10

showers, but more persistent rain coming across the north and west.

0:47:100:47:15

What about the outlooks a we head through Thursday and Friday across

0:47:150:47:20

the northern half of the UK. Friday looks much dryer and brighter but

0:47:200:47:25

it will start on a chilly night with frost in the North West. The

0:47:250:47:28

Margaret Thatcher's funeral, an interview with Mario Monti and the latest from the Boston bombings investigation. Plus, what is behind the fall of gold?

In-depth investigation and analysis of the stories behind the day's headlines with Jeremy Paxman.


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