Our embattled government, currently being given a bizarre free ride in the media, continues to act in an authoritarian and cynical manner;- At the weekened, the hystercial reaction to George Osborne was a sign of massive tension within the Government. The PM, Chancellor and several ministers were put out to slate the Tory statement of the obvious.
- Today, the Chancellor has dismissed the claims that HBOS could remain independent. He has unilaterally withdrawn any potential support for the Bank outside of the current Lloyds merger, as agreed by Gordon Brown. The show must go on as directed with no deviations allowed
- Next week, a Labour Government who have raised taxes for11 years are to announce tax cuts to stimulate the economy. This in itself it ideologically, morally and fiscally wrong. Labour know it, bu they have no clothes. No doubt they will attack the Tories for opposing them. This is real George Orwell Doublethink territory.
- Finally today and crucially the economic news is still very bad, inflation has fallen by 0.7% and the markets continue to tick down anyway. Worse, rents are falling as demand for housing dries up. House prices cannot find a new level with rents still falling - so expect a much further fall in house prices next year. Current predictions of 15% are laughable. it is quite possible top to bottom average fall will be nearly 50%; that is 30% more from here.You won't here this from the housing minister. Next week the Government will announce more borrowing to spend our way out of a debt crisis. The insanity continues and I am at a loss as to why the media either cannot grasp this or are happy to see the current Government take little flak for its appalling economic mismanagement.
Because journalists come from a very narrow ideological background. Our education system has a lot to answer for.
ReplyDeleteDo As We Say ...
ReplyDeletethe HMRC has taken to putting out press releases on tax schemes, saying 'if you do it we will legislate retrospectively to make it illegal'
so much for due process & rule of law
"Current predictions of 15% are laughable. it is quite possible top to bottom average fall will be nearly 50%; that is 30% more from here."
ReplyDeleteBlimey, I'm glad you're not attempting to manage the financial crisis with maths like that!
Still, what's 5% eh?
Personally I don't think you can really trust anything that anyone in a position of power is telling us right now.
The biggest lie we are being fed (again!) is that this recession could have been avoidable with better fiscal management. That somehow governments will create new policies to try and prevent this sort of thing from ever happening again.
Well, b*ll*cks is all I can say to that.
For the younger generations (which just about includes myself) -Welcome to the delightful world of Capitalism!
Anyone rich and powerful at this moment is rubbing their hands together with glee because they know in a few years time they'll be richer than they ever were before.
Yes, it's George Orwell alright, and it's f*cking bullsh*t!
Worse, rents are falling as demand for housing dries up. House prices cannot find a new level with rents still falling - so expect a much further fall in house prices next year.
ReplyDeleteHow d'you mean 'worse'? 'Better', more like!
@ Moggz, this crisis could have been mitigated by fiscal policy - if Labour had replaced as many other taxes as possible* with land value tax back in 1997, there would have been no such house price bubble, without which no credit bubble, without which no credit crunch, etc.
* The obvious candidates are existing property and wealth related taxes, like Council Tax, SDLT, Inheirtance Tax, Capital Gains Tax etc etc.
What exactly is wrong with tax cuts to stimulate the economy at this point in time?
ReplyDeleteIf we want to sustain the economic activity the money has to come from somewhere, right now government borrowing seems like the least worst option.
Nothing wrong with rents falling from where I'm sitting CU, the landlord has started trying to rip us off here (maybe he came off his teaser rate) so I'll be moving on in January.
ReplyDeleteThe cheeky sod tried to scam us all into paying him an extra £50 a month each for 'council tax'. He won't get the gas heating sorted either.
A bit stupid of him really considering I work for the council. I look forward to cheaper rent in a nicer place next year then!
The Government is deranged and evil, for the first time in my life I am knowingly evading tax and breaking the law, they have lost legitimacy...
ReplyDeleteAndreas: the activity we had until recently was based on too much money in the economy, to sustain it means increasing the amount back to unsustainable levels. Government debt is the same as any other debt in that it has to be paid back at some stage and costs money to service. That means that taxes have to rise more in the future than they can be cut now. People know it, so they will save more to compensate which means money being taken back out of the economy meaning no increase in activity but one hell of a payback in a year or two's time.
ReplyDeleteHas anyone noticed the BBC repeatedly saying today that the cost of living is set to fall?
ReplyDeleteEither they are completely innumerate or they are lying. The latter, I think, unless they really believe that the terms "inflation rate" and "cost of living" are interchangeable.
This week's The Sunday Times published an article about the BBC shying away from prosecuting high-profile refuseniks like Noel Edmunds and Vladimir Bukovsky. That story quickly spread to the other nominally right-wing press. Examination of the readers' comments at the Telegraph and Mail reveals huge anger over Brownite spin as well as the Ross/Brand debacle.
The Telegraph in particular, following Charles Moore's experiences with TVL, are running a real hate campaign. One of their hacks, Alex Singleton, has been put on TVL's case.
Notwithstanding the nonsense about inflation, the BBC may be finally realizing that they are in the deepest doo-doo, reinforced by Thompson's grilling today by the culture committee. Once ordinary viewers realize the powerlessness of TVL and start withholding their telly tax, the whole thing will implode as it did in New Zealand.
What all this may portend is a rapid pedalling-back by some of the BBC's worst offenders, like Peston and Naughtie. Be interesting to see if it happens.
Blue eyes: I've heard that before,but I'm not sure I particularly buy it. For example it could be argued that the spending would trigger inflation and thus devalue savings and discourage savings. However you look at it I think that few people tak govenment spending into account in their personal budgeting so any effect of this sort is pretty minor.
ReplyDeleteAs I see it, the country is in debt both public and private and so needs to slowly pay it off while sustaining a reasonable level of economic activity private sector debt has dried up so the public sector needs to take up the slack to sustain the economy as it goes cold turkey on private debt. Otherwise it all goes horribly wrong.
Mongz..I said nearly 50%
ReplyDeleteAndreas - there are many areas where savings could be made first. The Government will find that issuing more debt is very expensive. This will take a generation to pay off or more.
ReplyDeleteThey are attempting the Ocean Finance play on a grand scale.
I am not against the tax cuts, I am against profligate spending of more debt to no good end. Reslurces are valuable and should be husbanded.
Alos, don't believe the no inflation stuff - there will be a big jump after the deflation has worked its way through by mid-next year; inflation will be driven by the supply contraction.
CU re inflation.
ReplyDeleteHave had a few suppliers in, all highlighting the cost increases of staple products for next years orders.
Inflation is down on commodities,but those same commodities and even worse finished products, are being purchased at today's dollar price..
Inflation will bite again next year
Moggz said...
ReplyDelete""Current predictions of 15% are laughable. it is quite possible top to bottom average fall will be nearly 50%; that is 30% more from here."
Blimey, I'm glad you're not attempting to manage the financial crisis with maths like that!
Still, what's 5% eh?"
------------------------------------
In order prices to drop by 50% from top to bottom if they already dropped by 15%, will require another 40% drop from the current level.
For example:
initial amount 100,000 – 15% (or 15,000) = 85,000
current level 85,000 – 40% (or 34,000) = 51,000 which is exactly 49% from top to bottom!!!
CU,
ReplyDeletewhat have you said that's so naughty to have been moderated on Pestons blog re barclays?
roym - nothing same post came up 3 times!
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