UK Economy

[Galilee66]

Jeff,

In my view there is little point in continuing this thread. I have always held the BA forum in high regard because the participants have been able to exchange points of view without rancour or vituperation - which have become the hallmarks of other forums.

I am reminded of the story of two clergymen from different denominations who were great friends but continually argued over which form of church service was correct. One day after such a discussion one clergyman said to the other "We shall simply have to agree to disagree. You worship God in your way and I will worship him in His!"

Galilee66

[superfrank]

Jeff,

In my view there is little point in continuing this thread. I have always held the BA forum in high regard because the participants have been able to exchange points of view without rancour or vituperation - which have become the hallmarks of other forums.

I am reminded of the story of two clergymen from different denominations who were great friends but continually argued over which form of church service was correct. One day after such a discussion one clergyman said to the other "We shall simply have to agree to disagree. You worship God in your way and I will worship him in His!"

Galilee66

Galilee66,

I hadn't noticed any rancour or vituperation (great word). Economics is always going to produce disagreements, that's what makes it interesting.

Now stop being a big girl's blouse and keep posting!!...

SF.

[Iron]

I have always held the BA forum in high regard because the participants have been able to exchange points of view without rancour or vituperation.

Me too, and as far as I was aware, our discussion in this thread was good natured. But I respect your choice to discontinue the conversation.

Jeff

[Iron]

UK unemployment claims show biggest jump in two years

http://www.telegraph.co.uk/finance/jobs ... years.html

[superfrank]

Britain's deleveraging nightmare threatens its triple A rating
http://blogs.telegraph.co.uk/finance/je ... -a-rating/

taking all debt together, private, public and financial sector, Britain (top orange line) is the most indebted nation in the world, far exceeding the eurozone countries now in so much trouble

[Iron]

Poorer Than Their Parents - Alvin Hall assesses the financial problems faced by today's younger generation.

http://www.bbc.co.uk/iplayer/console/b012tpzg

Quite a sobering piece, tbh...

Jeff

[Iron]

UK GDP figures show slower growth of 0.2% - http://www.bbc.co.uk/news/business-14288348

Apparently the low figure was due to the royal wedding, the Japanese tsunami and the sunny April...

Jeff

[Iron]

'Britain's gross domestic product grew by 0.2 percent in the second quarter compared to the first, which took the annual growth rate to 0.7 percent'. (http://www.reuters.com/article/2011/07/ ... 5O20110726)

'The Public sector net borrowing PSNB (annual government borrowing) for 2010/11 was £143.2 billion or 11.7% of GDP.' (http://www.economicshelp.org/blog/uk-ec ... onal-debt/)

If I read those figures correctly, our national wealth is likely to increase by 0.7% this year, but additional borrowing amount to 11.7% of our national wealth, meaning our extra debt can't be paid off by our increased wealth (and therefore Britain goes still deeper into the red).

Would you guys agree?

Jeff

[superfrank]

tullet prebon
thinking the unthinkable
might there be no way out for Britain?
project armageddon – the final report
Dr Tim Morgan Global Head of Research

http://www.tullettprebon.com/Documents/ ... rt_007.pdf

Excellent report, please read.

[Iron]

Some disturbing stats there...

I think that the problem with the government's approach to spending cuts is that they are assuming that the OBR growth forecasts are correct. Given the problems with economic forecasts, they should be allowing for a MUCH greater margin of error IMHO.

I'm just glad that Labour aren't in power, as it seems that, like Obama's administration, they haven't learned that profligate public spending is the problem, not the solution...

Jeff

[Iron]

Tweet by Robert Peston:

'US, UK and German 10 y'r bond yields all at 60-year or all-time lows - whole of rich west becomes Japan?'

Am I right in thinking that's because the price of the bonds has gone up due to high demand, causing the yield relative to the market price to drop?

Jeff

[superfrank]

yes, there's an inverse relationship between price an yield.

[Iron]

yes, there's an inverse relationship between price an yield.

Makes you wonder if the markets are anticipating selling the bonds at a profit when the next round of QE comes along...

Jeff

[Iron]

Evan Davis (of Dragons' Den) tweeted this morning:

Economics: Is this the only plan to stop us becoming Japan? #1 Nationalise banks. #2 Write-off unsustainable debts. #3 Print money to pay

I replied:

Re: point 2 - Surely Britain defaulting would have devastating consequences for the global economy.

He replied:

We would not default I don't think. The burden of bad debts would ultimately fall where govts decreed it should fall.

I am right in thinking, aren't I, that what he's proposing would be a default, however the government chose to present it? You can put lipstick on a pig...

Jeff

[Iron]

PS I also responded to Mr Davis' point about QE:

Re: Point 3 - Doesn't QE stoke inflation, and merely postpone the day of reckoning? Also, it didn't hugely help the USA's problems.

This was his reply:

Nothing solves anything while zombie debts hang over economies, spreading poison

I'm usually no fan of QE, but I wonder if he has a point. Perhaps we're reaching the point where we have no choice; a sort of equivalent of 'go in play, or lose your bank anyway'.

I asked Mr Davis if he felt that things were coming to a head, and whether we'd see major developments over the next few weeks. He ominous reply was 'possibly things will get quite dysfunctional'...

Jeff