UK Economy

[superfrank]

he's a mainstream BBC cabbage, I don't know why you follow anything he says.

#1 Nationalise banks - they are (de facto) anyway.

#2 Write-off unsustainable debts - that's called a default!

#3 Print money to pay - Japan has been doing this for 20 years to no avail (from a growth point of view which isn't everything IMHO). Japan is very different; they run massive deficits and print money but it doesn't cause the same problems because they have a large trade surplus. If Britain continues down the QE road we will end up more like Zimbabwe than Japan.

People talk about Japan like it's a basket case, but compared to the US, UK, EZ they are very successful. Currencies ultimately reflect the relative health of economies - the Yen is worth twice as much as the £ compared to 2007. The £ is even 25% off against the (trashed) $ which kind of tells you the sh1t Britain is in.

Ps. We know what you look like now!

[Iron]

he's a mainstream BBC cabbage, I don't know why you follow anything he says.

I actually like like Davis - he seems to know his stuff, and he has an engaging, slighly camp style of delivery!

#1 Nationalise banks - they are (de facto) anyway.

Some are, others aren't. And even with RBS and Lloyds, correct me if I'm wrong, but aren't the taxpayer only minority shareholders?

#2 Write-off unsustainable debts - that's called a default!

I agree! But the time may be approaching where we need to think the unthinkable (possibly in co-ordination with other G7 countries).

As regards QE, let's say that we were to engage in QE at the same time as the USA and the ECB. At least we'd have other countries with devalued currencies who we could import from. I don't normally trade based on fundamentals, but if that happens I'll be going long on gold! LOL!

Ps. We know what you look like now!

Some people on this forum already knew what I looked like. Against my better judgement, I posted links to an online dating profile I once wrote and to an article I penned for the BBC (about chatting up women in the street - something I don't go around doing, I should add!).

Jeff

PS I really must update that picture! I look red as a lobster!

[superfrank]

But the time may be approaching where we need to think the unthinkable (possibly in co-ordination with other G7 countries).

As regards QE, let's say that we were to engage in QE at the same time as the USA and the ECB. At least we'd have other countries with devalued currencies who we could import from. I don't normally trade based on fundamentals, but if that happens I'll be going long on gold! LOL!

You're talking about a debt jubilee and that wouldn't work either. Do you think the rest of the world would allow the west to devalue en masse and do nothing?! It's not that easy. A hyper-inflationary collapse would be on the cards. Note that hyperinflation is the loss of confidence in a currency, not an extension of high inflation, i.e. the point when people would rather keep their wealth in anything but worthless paper money.

The solution is to take the medicine, stop printing money and raise interest rates, and have a proper recession and house price crash (to destroy the phoney wealth that was created in the 'boom') and rebuild from there. The problem is that no one can stomach it politically and so we end up with this charade of extend and pretend which does nothing but prolong the pain and delay the inevitable. Tweet that to nancy boy and see what he says.

People need to position themselves for what's coming... I get tired of saying it, but buy physical gold and silver.

[Iron]

The solution is to take the medicine, stop printing money and raise interest rates, and have a proper recession and house price crash (to destroy the phoney wealth that was created in the 'boom') and rebuild from there.

Possibly.

I don't know what the solution is (and I get the impression that world leaders don't either!). But I think it will involve some radical thinking. I suspect we'll have to push Humpty Dumpty off the wall and hope we can somehow put him back together again!

Tweet that to nancy boy and see what he says.

Tell him yourself! That way, I can post your picture on the forum!

Jeff

[superfrank]

Tell him yourself! That way, I can post your picture on the forum!

No, I don't do social media.

I'll remove the picture if you don't want it on here...

[Iron]

Re: Social networking - Fair enough, although I'd recommend you give it a go. It can be quite addictive!

No worries re. the picture. I'm not bothered about people seeing what I look like.

Jeff

Tell him yourself! That way, I can post your picture on the forum!

No, I don't do social media.

I'll remove the picture if you don't want it on here...

[superfrank]

Re: Social networking - Fair enough, although I'd recommend you give it a go. It can be quite addictive!

I'm addicted to enough things already.

[superfrank]

Bank regulation 'risks recovery' says Angela Knight (British Bankers' Association)
http://www.bbc.co.uk/news/business-14708023

It will be a travesty and a complete joke if the banks are not broken. They had the biggest role in causing the financial crisis and, apart from the shareholders, have taken precious little pain. Most would not be in business today (if they were real businesses and not parasitical banks) and yet the people who run them are still reaping huge personal gains.

[Iron]

I disagree.

The banks provide a great deal of revenue to the exchequer. It would be a travesty if policians decided to jump on the tabloid bandwagon and kill the goose that lays the golden eggs.

The free market isn't perfect, but IMHO it works best when businesses are left alone. When politicians and civil servants start interfering, it's unlikely to increase the competitiveness or efficiency of businesses...

Also, let's not forget amidst all the anti-bank fervour that 'the banks' didn't solely cause the mess we're in. The blame has to be shared amongst many parties (including members of the public who took out 'liar loans', and the profligate Labour government).

Jeff

It will be a travesty and a complete joke if the banks are not broken.

[superfrank]

I disagree - it's a false argument and doesn't stand up under analysis...

Cleaners 'worth more to society' than bankers - study
http://news.bbc.co.uk/1/hi/8410489.stm

It should also be remembered that banks make most of their profits at the expense of governments, directly or indirectly, so just because they give a bit back doesn't make them good value to the economy.

[Iron]

It's a false argument and doesn't stand up under analysis...

Why?

Cleaners 'worth more to society' than bankers - study

If the article were more recent, I'd complain to the BBC about its left-wing bias.

For example, it says that 'tax accountants damage the country by devising schemes to cut the amount of money available to the government, the research suggests'. But what about the argument that lower taxes are actually good for the economy, and that therefore tax accountants may be doing the country a favour?

Banks make most of their profits at the expense of governments, directly or indirectly, so just because they give a bit back doesn't make them good value to the economy.

Banks provide a valuable service to members of the public and to businesses.

The fact that a handful of senior bankers made some mistakes a few years ago doesn't mean the industry as a whole should be slammed. There was a reason Gordon Brown cosied up to the City for so long, and left them to their own devices. It wasn't because he'd developed an appreciation of Thatcherite economics. I would say it was because he knew that the taxes paid by the banking sector would help to bankroll his electoral bribes (or tax and spend policies, depending on how you look at it), and that interference would mean that they paid less, nor more, tax!

Jeff

[superfrank]

Andrew Sentance says value of pound 'downplayed' by MPC
http://news.bbc.co.uk/1/hi/programmes/h ... 579059.stm

He pretty much says that the MPC conveniently ignored/encouraged the trashing of the £ while blathering on the the bl00dy output gap.

He was the only member of the MPC I had (a bit of) respect for.

Full interview... http://www.bbc.co.uk/iplayer/episode/b0 ... d_advisor/.

[Iron]

What happens if growth disappoints? - http://blogs.independent.co.uk/2011/09/ ... sappoints/

I wonder if Labour are sticking to their 'austerity light' line because they know what's coming, and want to be able to say at the next election 'If Mr Osbourne had just listened to us, the economy would be back on an even keel by now!'

Jeff

[Iron]

Tweet by Channel 4's Faisal Islam:

'If OECD is right, in the 5 full quarters of Coalition govt, there'll have been one-eighth of the growth forecast in Osborne's first Budget'.

Someone has clearly got their sums very wrong - let's hope it's the OECD...

Jeff

[Iron]

Tweet from Faisal Islam:

HSBC has ranked world's 25 major economies as "safe havens". Britain comes 19th, beating only Portugal, Italy, Ireland, Greece, Spain & US

I'm torn between laughing and crying!

Jeff