tag:blogger.com,1999:blog-32841798.post4894443726444000933..comments2024-03-18T16:33:31.633+00:00Comments on Capitalists@Work: Amid the cheering GDP, the current account deficit is puzzlingCityUnslickerhttp://www.blogger.com/profile/15929544047783163175noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-32841798.post-79731890760440940572015-04-01T07:56:47.368+01:002015-04-01T07:56:47.368+01:00I'm not sure I believe much of anything I read...I'm not sure I believe much of anything I read these days, especially with an election in the offing.<br /><br />Last month we had mortgage figures that were the lowest in years at 14k per month, yet only a month later we hear that mortgages are a a 6-month high.<br />You'll note of course that a '6-month high' is a very bizarre measure. Its not yearly or monthly.<br /><br />There is a huge disconnect between what the media reports and what is actually happening - the gov minister paedo ring scandal being the obvious example.<br /><br />We have deflation (apparently) even though I notice my favourite fruit juice has shrunk from 1L servings to 860ml and the multibuy price has risen. Prices are rising very rapidly as far as I can see. Again (my bugbear) housing costs are not included in inflation figures. Where would we be if water and utility costs were included - Sky for example, is that included?<br />The economy badly needs a rate rise and for the still underwater debtors to be flushed out of the system. Remember, almost 50% of mortgages taken out after 2005 were interest only.<br />If our current 'successes' are predicated on ZIRP and emergency money pumping we remain in deep, deep trouble.MyEarlyMorningNamenoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-86534795066821329042015-03-31T22:05:09.630+01:002015-03-31T22:05:09.630+01:00I’m not an economist, so call me a numpty CU but I...I’m not an economist, so call me a numpty CU but I don’t understand the question/ puzzlement<br />Are you asking, <br />A) why are we still able to sell bonds, when our borrowing has increased 2.7% more than our income? (and this is the smallest margin since 2008)<br />For the Private investor, return of capital not return on capital. We are the least stinky underpants in the basket. You can only turn them round and inside out so many times. They all went way past the shirt analogy in 2008<br />The same people who buy bonds are the same people who receive QE. Risk is irrelevant and cash is worthless<br />B) Why is our GDP growth so low when the government is borrowing (sorry investing) money like a student on freshers week? <br />C) Why is government investment increasing when the economy is booming “its people “have more cash than a rapper in a blond strip joint? <br />I have answers to b and c but I feel a rant coming on and you have been very patient with my previous rants.<br />Suffragentnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-89689897289758077722015-03-31T22:01:41.573+01:002015-03-31T22:01:41.573+01:00Yes, there is a bit of an apostrophe surplus round...Yes, there is a bit of an apostrophe surplus round these parts.<br /><br />"the Sterling exchange rate remains over-weight by international standards."<br /><br />Does it? It's still <a href="http://markwadsworth.blogspot.co.uk/2015/03/sterling-still-not-overvalued.html" rel="nofollow">about 6% below its average</a> against a basket of other major currencies since 1990. Basically, <br /><br />a) we are all as bad as each other.<br /><br />b) the high interest rates of the 70s an 80s were a blip and an aberration, we are closer to 'normal' now than we were then.<br /><br />c) we get some of our trade deficit back by selling our utilities, factories and London land to Johnny Foreigner.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-16087942366923145002015-03-31T21:51:07.293+01:002015-03-31T21:51:07.293+01:00Someone else much cleverer than me has looked into...<a href="http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2015/03/the-other-deficit.html" rel="nofollow">Someone else much cleverer than me</a> has looked into thisandrewhttps://www.blogger.com/profile/07311993288675111834noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-16939330172862193382015-03-31T13:03:45.720+01:002015-03-31T13:03:45.720+01:00SW - yup, I think there is more going on. But I am...SW - yup, I think there is more going on. But I am very wary of ever saying 'this time its different'<br /><br />Paul - Yes but we do capture that FDI and set it of against the deficit - so there must be more to it or else FDI would cancel out the account surplus - which it does not. <br /><br />As I said, puzzling. CityUnslickerhttps://www.blogger.com/profile/15929544047783163175noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-78515509239377800232015-03-31T12:57:20.023+01:002015-03-31T12:57:20.023+01:00Isn't this driven by the accounting convention...Isn't this driven by the accounting convention? China manufactures sofas and tellys, the UK manufactures prime London property, but then we call it investment so it makes the current account deficit smaller. Paul Ralleynoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-4736630787205905232015-03-31T12:39:06.058+01:002015-03-31T12:39:06.058+01:00The UK GDP is ~3 trillion USD
5% of that is 150bn ...The UK GDP is ~3 trillion USD<br />5% of that is 150bn USD ~ 100bn gbp.<br /><br />That is about 2 very nice big flat screen teles per person (70 million of us).<br /><br />Something else is happening.<br /><br />If there was an influx not just of people buying flats and big teles, but people buying flat and big teles and goods that are fairly cash-like but not cash, you might be on to something<br />10 000 people bringing in 10m each would roughly equal the current account defecit.andrewhttps://www.blogger.com/profile/07311993288675111834noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-14124376424886989902015-03-31T12:08:07.284+01:002015-03-31T12:08:07.284+01:00As long as you have signed a W8-BEN form you can t...As long as you have signed a W8-BEN form you can trade US & Canadian shares in a SIPP.Sebastian Weetabixnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-54667786210099306072015-03-31T11:45:20.927+01:002015-03-31T11:45:20.927+01:00Mr Weetabix, how can you buy US shares inside your...Mr Weetabix, how can you buy US shares inside your SIPP? Thought it was UK shares only. phil5https://www.blogger.com/profile/15393353266959207870noreply@blogger.comtag:blogger.com,1999:blog-32841798.post-26974549119543681472015-03-31T11:24:23.790+01:002015-03-31T11:24:23.790+01:00I wonder in these globalised days if the current a...I wonder in these globalised days if the current account deficit has any real meaning. I work in a group formulating and marketing specialty chemicals. The prototyping is done here, using small amounts of bulk chemicals mostly bought from overseas. We then fly to China to supervise mass production; the resulting products get shipped everywhere. At no point do we ship materials overseas in return for money - indeed we are a cost centre, not a profit centre, but all the high value jobs and IP are here... and our multinational employer books the profits in a metaphorical Timbuktoo somewhere. In the meantime with my slice of the pie I import all sorts of consumer goods and put some in my SIPP where I buy, inter alia, US shares, which then give me lots of lovely dollar divis for my little pension pot. <br /><br />As I say, I doubt all that is adequately captured by current account numbers, largely focused as they are on physical goods.Sebastian Weetabixnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-59417099437165006272015-03-31T10:53:43.968+01:002015-03-31T10:53:43.968+01:00It's only a problem if people suddenly stop wa...It's only a problem if people suddenly stop wanting to buy pounds. I think we Brits are making a rational choice to borrow to invest/spend while it is more profitable (in the loosest sense) to borrow than it is to save/invest. We do need to save more, though, in the longer term.BEnoreply@blogger.comtag:blogger.com,1999:blog-32841798.post-38029550178230258782015-03-31T10:29:45.536+01:002015-03-31T10:29:45.536+01:00The apostrophe surplus is growing too.The apostrophe surplus is growing too.deariemenoreply@blogger.com