howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#1
read this and have to admit that these economists seem to have thought things through.
http://www.guardian.co.uk/politics/2011/oct/29/plan-b-economy-george-osborneGuest 655- Registered: 13 Mar 2008
- Posts: 10,247
#2
These people are crackers.
What they are saying effectively is to bring inflation up to 10% pa as a way to solve our economic problems. Tell that to pensioners on fixed incomes. This is the economic of the madhouse.
There is no secret to what is needed, more public spending cuts for a start alongside lower taxes and less red tape for businesses.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#3
Yes Howard, it seems they have been eavesdropping on Roger.
I am unsure as to what, "The ambition is marked." might mean though.
Barry you seem intent to go down with the ship.
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#4
A foolish belief in government spending is what got us here and QE is not a cost free solution.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#5
Yes Barry, QE; not cost free and not the least bit effective thus far. It could be argued that letting the banks have it all was where QE as so far come to nought.
In any event I understand that the inflation figures are set to fall drastically in the new year. Where would we be without statistics?
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 725- Registered: 7 Oct 2011
- Posts: 1,418
#6
QE is a bad idea. All it does is kicks the can down the road (please excuse this much overworked cliché).
I think that with Cameron at the helm things will turn increasingly bad.
He's opposed to an extra runway, his obsession with all things green, his ridiculous idea that HS2 will help solve many of our economic problems, his innate europhilia, his opposition to grammar schools, his prevarication regarding shale gas alongside many other reasons don't give me much hope for the future.
Inflation is a serious problem and if not tackled will impoverish everybody. The Germans are absolutely terrified of this with good reason.
The politics of envy don't help matter too in regards our financial industry and London's precarious position in terms of a planned land grab by Europe.
The 50 pence tax rate is also another reason things won't get any better this side of the future.
Hold onto your hats folks, the euro will fail and stormy clouds are gathering.
Guest 645- Registered: 12 Mar 2008
- Posts: 4,463
#7
Germany is 55.5 billion euros ($78.7 billion) richer than it thought due to an accountancy error at the bad bank of nationalized mortgage lender Hypo Real Estate (HRE), the finance ministry said.
Europe's largest economy now expects its ratio of debt to gross domestic product to be 81.1 percent for 2011, 2.6 percentage points less than previously forecast, it said.
The HRE-linked bad bank FMS Wertmanagement FMSWA.UL was set up after HRE was nationalized in 2009, so that HRE could transfer the worst non-performing assets to an off-balance sheet bank guaranteed by the German state.
"Apparently it was due to sums incorrectly entered twice," said a ministry spokesman on Friday, adding the reason for the error still needed to be clarified.
The government nonetheless welcomed the news which pointed to a further reduction of Germany's debt mountain, which remains above the European Union's Maastricht requirement for 60 percent of GDP.
It beggars belief.
Marek
I think therefore I am (not a Tory supporter)
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#8
Perhaps the German government secretly printed 55.5 billion euro and pretended it was already there, inventing an error in digital data.
Or perhaps they didn't.
As for Osborne's plan B, it was QE printing 75 billion quid.
The easy way out.
QE usually has an effect that starts months later, when the futures on stocks reach their expiry date. The price of futures cannot change, no matter what increase or decrease there may be in commodity prices. But once futures are sold off, commodities then readjust to their new value based on hard currency, usualy dollars, pounds and euro.
QE can make hard currency resemble scrap-paper, and consequently the price of oil, gas, metals and other things on the world market goes up.
As I said, this hits hard when the futures based on old prices (prior to QE) are used up and can no longer be traded, as the physical consignment of the commodities have been made to the end purchaser.
So give it a few months, and we will see hard inflation due to more expensive imported energy, metal and other essential products.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#9
Alexander - QE decision was not Osborne, that falls under the independent Bank of England. I have already blogged my own disapproval of that and this could rise to £300bn.
QE impacts on inflation 18 months to 2 years later. It is the same as any commodity, increase its supply and you lower its value. In this case lowering sterling's value means higher prices in the shops.
In the meantime there is also downwards pressure on savings interest rates while the inflation threat means bank base rates will rise so the gap between savings rates and debt rates increases.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#10
maybe we are forgettting the crux of the threads plan b?
release money to the poorest members of society and they will spend it straight away thereby boosting the economy and saving the lost jobs projected.
the idea of lowering the top rate at this time does absolutely nothing for growth, just means that more goes into savings accounts.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#11
I totally disagree with that. Just giving money away to the poorest will achieve nothing at all for the economy. Far more effective to cut income taxes and better still corporate taxes as that will be more likely to generate the economic activity needed, but public spending must be cut more deeply rather that to debase the currency. Cutting the top rate of tax will result in an increase in tax revenues and that is why that one must be done. I have explained before how and why that happens.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#12
Good old Barry. It seems you have had a very enjoyable weekend.
Yes, you have indeed made mention of all of this before, but as far as explanation goes you have done no more than, in terms, said 'hey-presto'.
I don't know if this is Reverse Micawber Economics, where 40p is magic and 50p disastrous. It is, to say the least, an unflattering picture you paint of these people that determinedly remain idle until this one magic-formula is expressed.
As if money is ONLY money when there is oodles of it.
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#13
Well said, Tom.
Was it not Colombus who said: "give me some money and I'll make the world go round".
Guest 725- Registered: 7 Oct 2011
- Posts: 1,418
#14
Cut taxes for the poor eh? Hmmmn, and what will they spend it on, these poor?
Fags, booze, in the betting shop?
Or will they wisely invest in something for the long term?
It's not cheap political stunts that is required but something much more substantial in order to get us out of this hole but I'm afraid the news is not good.
There is no answer.
We are all doomed but massive public spending and vast amounts of debt has insulated us all from the reality of what is really happening.
I'm sorry to sound pessimistic but it's going to get far worse. Worser than worse.
That light at the end of the tunnel is HS2 heading your way having knocked a few pointless minutes off the journey it is making headlong towards Armageddon.
Ahh I'll delete this posting it's all too depressing.
On the other hand
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#15
We have indeed been living in a fantasy island built on excessive government spending and debt Philip and it is indeed a disaster - we must not poor more oil on those flames.
Tom - there is a lot of evidence that I have given details of. You can see it from HMRC (previous Inland Revenue) figures that show the way the 'tax take' changes as rates change, the evidence is overwhelming and consistent. I too see it regularly in the behavioural characteristics of people who work just enough to keep below the 40p band - the 50p band will be worse. Why on earth should anyone work longer, harder and take risks just to have more than half taken away by The State.
