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Why Nobody Owns Antarctica
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The Man Who Broke the Bank of England
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Benford's Law: The Hidden Pattern That Catches Liars
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Grab your coffee and let’s dive in.

Stand at the South Pole and you are standing at the point where six countries' claims to Antarctica meet, and yet on land that belongs to none of them. The continent is bigger than Europe and holds about 90 percent of the planet's ice, and by the usual rules of history it should have been fought over long ago. Instead, it is run under an international agreement, the Antarctic Treaty, which set the whole continent aside for peace and science. Not that nobody tried. By the 1950s, seven nations had staked formal claims to wedge-shaped slices of it, fanning out from the South Pole like portions of a frozen pie. Argentina, Australia, Chile, France, New Zealand, Norway and Britain all drew lines, some on the strength of exploration and some simply because they were nearby. Three of the slices overlapped. Britain, Argentina and Chile all wanted much of the same territory, including the peninsula that reaches up toward South America, which is roughly how wars get started.

The breakthrough came, of all times, in the middle of the Cold War. In 1957 and 1958, scientists from dozens of countries joined a huge research effort called the International Geophysical Year, and the goodwill spilled over into diplomacy. In December 1959, twelve countries signed the Antarctic Treaty in Washington, and it came into force in 1961. Its cleverest move was to dodge the very question everyone was arguing about. Settling the claims would have meant winners and losers, so the treaty simply froze them. Under Article IV, existing claims were neither recognized nor renounced, and no new claims could be made while the treaty was in force. Countries that flatly disagreed about who owned what could put the argument in a drawer and get on with the research. The treaty also banned military activity and nuclear testing, making Antarctica the first continent demilitarized by agreement and the treaty one of the first arms control deals of the Cold War.

The arrangement has not just survived, it has grown. The original twelve signatories have become more than fifty. In 1991 they added the Madrid Protocol, which came into force in 1998 and banned all mining across the continent. That is a bigger sacrifice than it sounds, since Antarctica is thought to hold oil and mineral deposits of the kind that have started wars elsewhere. You may have heard that the treaty, or the mining ban, expires in 2048. It does not. From 2048 any voting member can ask for a review, but changing the ban needs a majority that includes three quarters of the 1991 voting members, plus binding mining rules agreed first. In practice, that is about as permanent as international law gets. The research station sitting at the Pole belongs to the United States, which has never claimed an inch, and runs the busiest address on a continent nobody owns.

In September 1992, a Hungarian-born financier named George Soros bet against the British pound and made more than a billion dollars. He also picked up a nickname he has never shaken: the man who broke the Bank of England. The trouble started with the European Exchange Rate Mechanism, or ERM, which Britain joined in 1990. The ERM, a forerunner of the euro, obliged Britain to keep the pound above a fixed floor against the German mark. The problem was that Britain had joined at a rate of about 2.95 marks to the pound, which was too high for an economy sliding into recession. Holding the pound up there meant keeping interest rates painfully high, squeezing the very economy the government was trying to protect. A growing number of traders decided the commitment could not last. Soros was the boldest of them.

Through the summer of 1992, Soros's Quantum Fund, run day to day by his lieutenant Stanley Druckenmiller, built up a bet that the pound would fall. It was a short sale, meaning the fund borrowed pounds and sold them, planning to buy them back more cheaply after the fall and pocket the difference. By August, Druckenmiller held a 1.5 billion dollar position. Soros thought that was far too timid. According to Sebastian Mallaby's history of hedge funds, he told Druckenmiller to "go for the jugular," and the position reportedly swelled to around 10 billion dollars, more than the fund's own capital. The Bank of England did not have enough reserves to defend the pound forever, and sooner or later the government would have to let it go. On Tuesday, September 15, after the head of Germany's central bank hinted that a devaluation was coming, Soros and Druckenmiller got on the phones and sold sterling to anyone who would buy it.

The next day became known as Black Wednesday. As traders dumped pounds, the Bank of England bought them up with its foreign currency reserves, trying to keep sterling above its ERM floor. That morning the Chancellor, Norman Lamont, raised interest rates from 10 to 12 percent, and when that failed he promised 15 by the afternoon, which only convinced the traders he was desperate. That evening, Lamont stood in front of the cameras and announced that Britain was leaving the ERM. The 15 percent rate never took effect, and rates were back at 10 percent the next day. Over the weeks that followed, the pound fell about 15 percent against the mark. Soros bought back his pounds at the lower price and walked away with a profit of more than a billion dollars. A 2005 Treasury estimate put the cost to British taxpayers at about 3.3 billion pounds. The twist is that losing may have been the best thing that could have happened to Britain. Free of the ERM, it cut interest rates, the economy recovered strongly over the next few years, and some people now call the day White Wednesday instead.