Call me paranoid if you like,but when the British establishment starts getting all it’s troops into line and sets up a concerted noise about something…my immediate reaction is..Ok What are they hiding that they don’t want us to know?
We are seeing such an event right now!
Since the beginning of December they have been gradually building up the noise about whether or not an Independent Scotland would remain in the EU or would have to reapply for membership. The facts are clear, Scotland will be in Europe, one way or another.Negotiations will have to to take place,as would be expected, one way or another. We are all citizens of Europe,and that will not change. So what the hell is all the fuss about?
Initially when the headline news the day after Osbournes Autumn statement was made, was s supposed secret letter from the EU president to the House of Lords casting doubt on whether Scotland would remain in europe or not, seen by the Scotsman and reported extensively by the BBC, I wondered what they had? It was another letter entirely,and no letter had been sent from the President. All nonsense, but they still persisted..Why?
I thought perhaps that they just wanted to distract us from the atrocious conditions that the State is imposing on the working poor and the welfare system, but It wasn’t that..for the noise just kept on coming!
All eyes have been focussed on this spectacle and phony war over Europe. Acres of Forest have been cut down in press column inches of newsprint, The tv and radio have devoted endless hours of coverage discussing it, the social media and bloggers have been skirmishing over it. I briefly said my piece, decided it was a red herring and moved on. I went instead on a search for what they were hiding,and I found it!
It wasn’t so much what they were hiding, but rather what they didn’t want us to hear! The information was already in the public domain,hence the cacophony of noise to distract us from it,and to misdirect us into focussing on the Euro claptrap!
You may recall that recently the major Credit Agencies have been saying that the British Government is very likely to lose it’s coveted AAA credit rating. It was briefly reported, but the press and media moved quickly on.
But as in all good crime thrillers, if you want to know who done it? You follow the money!
And so off I set, gathering information from all areas of history, from statistical tables, from economic and social reports,from official government tables, and a whole number of other places.
I soon had on my hands enough information to write several articles on differing subjects and enough statistics to melt my brains in deciphering. But where to begin? The subject area was massive!
But at last I found a report released on 1st December which is terrifying! It also satisfied to me,exactly why the British Government were doing as they are to the general populace.
I will link to the article in the Money Week magazine, but cover its basic points here from a Scottish perspective.
The article is so terrifying that it carries an X Certificate! In my opinion it should be a XXXX Certificate, because if they are correct, On Scotland leaving the UK, the rUK will really live up to it’s other alternative title of fUK (Former UK) as they will be absolutely FUKed!!! If we are kamikaze enough to remain with them, we will be Utterly Fucked!! As it is,we are going to Really suffer over the next couple of years,as they try and leach out of Scotland every damn thing that they can get!
The article is entitled ” The End of Britain” and it really is Apocalyptic.
Here is some of what they say.
“Britain is about to be flattened by a tidal wave of debt. It doesn’t matter if you vote Conservative, Liberal, Labour, UKIP – or for no party at all. The facts are the facts.
Let’s take a look at some numbers…
Two and a half years ago, when the Coalition government formed, we were already in a huge amount of debt. In fact, the previous government had left the country sinking under £700 billion’s worth.”
“our national debt is still growing at an incredible rate.
Despite David Cameron’s talk of “austerity”, he’s going to add an estimated £700 billion to the national debt in just five years. That’s more than Tony Blair and Gordon Brown added to the national debt in eleven years. It’s more than every British government of the past 100 years put together.
The fact is, when you look at our finances as a whole, the Coalition isn’t cutting anything. State spending is going up… our national debt is going up… and our interest payments are going up.
By the next general election in 2015, our national debt is estimated to stand at almost £1.4 trillion,”
“Compared to the size of our economy, Britain is now one of the most heavily indebted countries in the Western world. That’s official. Our total debts stand at more than FIVE TIMES what our entire economy is worth.
Proportionally, that’s more debt than Italy… Portugal… Spain… and almost twice as much debt as Greece. Those are four countries already in the throes of financial crisis. We’re the odd one out because we haven’t collapsed – yet. But things can’t stay that way for long,In fact, our debts tower above almost every other nation’s”
“That’s absolutely incredible, isn’t it? Yet you’ve probably never seen this fact reported in The Telegraph or on Sky News.
And the worst part is, even THAT isn’t the full story…
Because when you add in all of Britain’s “unfunded obligations” – promises the Government has made on things like public sector pensions – our debts swell to 900% of our economy.
That’s right – when you add everything up, we owe TEN TIMES what our entire economy is worth.
Our political leaders still like to see Britain as a world power. But let’s not delude ourselves. It’s clear to see: we’re totally broke.
It doesn’t matter which set of figures you use, or which way you look at Britain’s debts. We’re merely talking about different shades of disaster here.
A country can either pay back its debts or it can’t.
And it is very clear to us that Britain can’t.”
So they are very clear indeed about the real financial state that Britain is in. Unfortunately when a normal person delves into the thinking and societal values of High Finance and Market Traders, One needs to go for a shower and scrub themselves thoroughly afterwards, because these people are social psychopaths!
In a Canadian Study they measured the performance of a group of financial traders against a group of Clinical Psychopaths,and discovered that the traders were more psychotic than those that had been clinically diagnosed as psychopaths!
This lot reporting here, apart from knowing their financial and economic beans, go on to blame the reason for Britain’s Ills entirely on the Welfare State!
Which is precisely why the Government is hammering the poor, the disabled,the unemployed, privatising the NHS in England, areas of the Police force, and everything else they can lay their hands on. While cutting health, Social and Community budgets to shreds! They are in the hands of the Bankers and Financiers right up to their eyeballs!!
However back to their Financial Report.
“So what’s different about today? Why can’t the government just keep giving us MORE – and take on more debt to pay for it. That’s worked for 100 years – why won’t it work now?
The answer to that is simple. The explosion of government spending and government debt has mostly come in the past 30 years. And during that time, it’s been easy and cheap for the government to borrow money.
You see, interest rates on the government’s debt have been steadily falling for thirty years”
“Debt has been getting steadily cheaper for three decades. That has allowed the government to borrow more and more money, without having to face the consequences.
But these ‘good times’ are about to come to an abrupt end.
The simple truth is, if interest rates were at their normal rate of 5% – instead of the extremely low 2% they’re at right now – there’s absolutely no way Britain could ever repay its debts. In fact, at normal rates of interest we’re already bust. Not just ‘in over our heads’ but six feet under.
It’s simple maths. If interest rates moved back towards the normal 5% level, our cost of borrowing would triple.
Just to put that into context, if our current debt repayments tripled, the government would have to take drastic action – like abolishing the state pension. Or privatising the NHS. Or pushing tax rates back up to 90%, as they were in the 1960s.
In short, Britain would change radically
And that’s just if interest rates move back to “normal” levels. ”
“The fact is, when you’re in a lot of debt, interest rates are either your lifeline… or your death sentence. So long as rates stay low, you can just about keep things on track. You can service your debts… keep borrowing… and keep the wolves from your door.
When rates move higher… you get squeezed… and eventually, you’re finished. All of a sudden, you have to find more and more money to cover the interest on your debt. ”
“in 2009, the Greek government could borrow money at just 1%. Then in the wake of the financial crisis, the Greek economy hit the rocks, fell into recession and the markets realised what a complete mess the country was in.
Interest rates shot up vertically. And Greece imploded. Not just financially, but socially and politically too…
As you’ve seen on the news, there have been riots, suicides, overnight poverty, snap elections and crushing general strikes. People couldn’t get their money out of banks fast enough, businesses collapsed. In that environment, just keeping your family safe is a big challenge. That’s the danger of rocketing interest rates to a country with huge debts.”
“In Britain, interest rates on government borrowing now stand at record lows. If we’re not at rock bottom, then we’re incredibly close.
That means the most important trend of the next twenty years is almost certainly rising interest rates.
Debt has been getting cheaper for thirty years. Now it’s about to start getting much more expensive.
We’re now facing an unprecedented crisis. As interest rates rise, our record debts will become impossible to bear.
No one can say how quickly things will escalate. Interest rates could rise overnight. Or they could slowly and inevitably push higher, taking years to slowly strangle the economy, the housing market, the stock market… stripping us all of our wealth one day at a time.
What we can say with certainty is that sooner or later interest rates WILL rise. We’re approaching the day when foreign investors realise the scale of our problems, and demand higher interest rates… or stop lending to us altogether.
When that day arrives, we are certain things will get nasty. ”
So what happens to Britain when interest rates rise? What shape will the crisis take? And what does all this mean for you, and your family?
The first “flashpoint” will be the banking system. We’ve already seen this across Europe. This is because banks hold huge amounts of government debt. When interest rates rise, the value of government debt (bonds) falls. Even a small jump in interest rates would wipe billions of capital off banks’ balance sheets. It’s impossible to say exactly which high street banks – if any – could withstand that kind of hit.
the government simply won’t have the money to bail the banks out again.”
But the crisis will not be confined to the financial sector.
” The next domino to fall will be the housing market. Most mortgages are linked to interest rates. As interest rates shoot upwards, millions of people will be pushed “underwater” by a combination of falling housing values and rising mortgage payments.
But that isn’t all…
When a financial system ceases to function, the social fabric begins to fray. We are not simply talking about shares falling or house prices dropping, which is devastating enough. We are talking about the breakdown of social order.
The important thing to realise is that Britain is going to change, very significantly. Things might never be the same again. ”
“Most people think Britain’s debt collapse can’t happen. Of course, it’s hard to picture. Banks look safe until they announce they’re broke. Governments say everything’s under control, until they beg for bailouts.
These events often come as a shock to the public. Many people assume they’ll never happen. But assumptions can be misleading. Especially ones that are widely held.
The Victorians thought the British Empire would last forever. Americans in the 20s thought the stock market boom would never end. And here in the UK, during the 90s and early 2000s, we thought we could keep borrowing and spending forever. ”
“Anyone around fifty years old will know that, we’ve had our own taste of financial and social collapse, in the relatively near past.
Around forty years ago, Britain entered its own ‘lost decade’ of economic chaos
Back in the 1970s inflation ate into cash savings at a rate of 28%. Yes, 28%. It seemed like every time you turned your back, bank savings lost more of their value. Every single day, you became a little poorer.
The FT30 entered the worst bear market in history, falling 73% between 1973 and 1974. Even gilts – our so-called “safe-haven” – collapsed as interest rates went sky high.
Rising interest rates buckled the financial system. But it went deeper than that. The speed of the social breakdown was frightening…”
“The general strike meant dead bodies went unburied as gravediggers joined the picket line… Stinking piles of rubbish rotted on the streets, towering inside Leicester Square… Those lucky enough to have jobs had to swallow huge wage-cuts during the infamous ‘three-day-week’. Shoppers scoured supermarket shelves by torchlight during blackouts.
That’s not to mention the violent civil unrest, where thousands of the unemployed and strikers clashed with the police. For millions of people trying to keep their hard-earned money secure, it was a nightmare.
As the top rate of income tax peaked at 83% in 1974, foreign investment steered away from Britain as if it were an island colony of lepers. We were the ‘sick man of Europe’.
Property and banking crises meant that, people’s lives changed dramatically for the worse: jobs were lost, family businesses closed, people had to dig deep into their savings just to make ends meet. The country was brought to its knees”
“But the day of reckoning is approaching.
When?
Well, we can’t say exactly. It might be a long, slow drawn-out process that drains your wealth over the next decade. Or this time next year, the financial system could be breaking apart. It’s impossible to say.
The vast majority of people here in Britain will have no idea what action to take as they watch their wealth and financial security drain away, out of reach, perhaps forever”
“Escape is impossible
If you take one thing away from this presentation, it should be this:
In recorded economic history, every single country with debts as big as ours – every single one – has suffered a devastating economic collapse. There are NO exceptions.
For example…
During the Great Depression – when thousands of ordinary people lost everything – America’s total debt hit 252% of GDP. In any circumstances, that’s bad.
But things can get worse. During the Japanese economic collapse – which triggered more than two decades of deflation and a 75% drop in the stock market – Japanese total debt hit 498% of GDP. That’s twice as bad as the level of debt seen in America during the Great Depression.
If Britain’s current debts were at those kinds of levels, it would be worrying. But in truth, our debts are now much worse than either of those two examples.
Shockingly, our debt load is now on a scale comparable with one of the most frightening economic disasters of the 20th century…
We’re talking about the Weimar Republic. ”
“Back then, suffering under the weight of brutal war reparations, civil unrest and shattered public finances, the Weimar Republic’s total debt equalled 913% of its economy.
Of course you know what happened next: the government printed money and hyperinflation took off. In the end, it was cheaper to decorate your home with bank notes than wallpaper. Ultimately, the country descended into a period of economic and social crisis… a catastrophe that ended with the rise of the Nazi party.
And that was with debts worth 913% of the economy.
Today, Britain’s total debt equals 900% of the economy.
When you add in our financial sector debt, government debt, personal debt and corporate debts… our debt load rivals the Weimar Republic in scale.
To put it mildly, this worries us a great deal. It should worry you, too. Because this simple fact alone proves just how inevitable Britain’s coming crisis is.
Remember, as you saw earlier the only thing delaying the crisis right now is the fact that interest rates are at historical lows. That’s what allows life to carry on “as normal”.
But things won’t be this way for long. ”
“Because the simple fact is:
When interest rates rise – and they WILL rise – Britain will face the greatest crisis in generations.
And there’s one more thing you need to consider.
The first danger you face won’t be the falling price of your shares… nor will it be the insolvency of the banks. Those things, we believe, will happen. But first, you face an even more immediate threat:
The desperate actions of our own government. ”
here is nothing the government can do to solve the debt crisis. Better people than David Cameron and George Osborne have tried to get out of similar crises in the past – and failed. As you have seen, the hole we have dug for ourselves is simply too big to ever fill back in.
But that won’t stop politicians making a series of bad decisions to fight the inevitable, while they are still in power. They must be seen to be doing something. And that’s bad news for you.
As the crisis deepens, panic will take hold. In a desperate attempt to pay off the debts and try to regain control, politicians will cast around for any sources of money available, and use almost any means to seize it.
Invariably, that means they’ll turn to their primary source of income: you.
Throughout history, when countries are in financial crisis, governments automatically raid the wealth of their citizens. It’s all they can do.
It goes as far back as Ancient Rome. As the Empire crumbled and inflation raged, the Emperors raised taxes over and over, squeezing as much coin as they could from their subjects.
Back to the 20th century… In 1933, President Roosevelt signed executive order 6102, forbidding the man on the street to hold any significant amount of gold. In the midst of the Great Depression, the government basically made it illegal for anyone but them to hoard the precious yellow metal. Refusal to comply with these demands was met with a five year prison sentence. That’s essentially how the US filled Fort Knox – by seizing other people’s gold.
Just last year in Hungary, facing a debt crisis similar to our own, the government nationalised all pensions. In effect, they confiscated people’s savings. Can you imagine waking up one day and being told that the income for the last 30 years of your life hangs on a government promise?
“In other words, in times of financial panic, the government will come after the people with money and savings. If you are someone who has worked hard, been responsible, considered the future, thought about your family, planned for your old age, and built up savings and some wealth – you are the prime target.
The government and financial authorities will never admit this, of course. They will never announce or admit to these ‘confiscation’ policies. In fact, their official statements are designed to conceal it.
And yet, in the end, their actions and the new controls they implement will undermine some of the core principles of the British way of life:
The protection of private property. Individual freedom. The rule of law. Clear limitations on the role of the State. Or to put it colloquially: “an Englishman’s home is his castle”.
It’s not just your home that will come under threat, it’s your money. And the outcome could be very uncomfortable indeed.”
“In Europe, right now, in Italy, Spain and Greece, wealth restrictions are already being implemented..
These measures have already been discussed amongst Eurozone finance chiefs. Limiting the size of withdrawals from cash machines, border checks, the suspensions of free travel between countries… there are draft plans to initiate these extreme measures under desperate circumstances.”
“Considering the UK has one of the largest debt to GDP ratios on the planet, how long will it be before your money is seized by our cash-strapped government? Will it be when interest rates creep up 1%… 2%? It’s impossible to predict exactly.
Unfortunately, you cannot stop the government taking this course of action. Even worse, these measures will primarily be aimed at people exactly like you. People who have worked hard, saved their money and paid their taxes. There may be resistance, even mass protests, but if things get bad enough, we think capital controls WILL be put in place once again”
So there we have it… frightening Isn’t it?
But they are not anywhere near alone in making such predictions after looking at the figures given by the government and from other sources.
The city of London has warned that the UK is in danger of slipping into an unprecedented triple-dip recession after industrial figures showed that factory output is at its lowest level for 20 years.
Michael Saunders, UK economist at Citibank, said : “Early data suggest the UK is heading for a ‘treble dip’, with GDP shrinking again in the fourth quarter of 2012. We expect the economy will continue to underperform the OBR’s forecasts in 2013-14, leading to further sizeable revenue shortfalls and deficit overshoots.”
Howard Archer, Chief UK & European Economist at IHS Global Insight said: “This is a dire set of data. The 1.3% drop in output in October is far worse than expected and very worrying. It means that industrial production fell by a further 0.8% in October and is set to be a significant drag on GDP. Unless services output can enjoy a strong end to the year, it looks increasingly inevitable that GDP will suffer a renewed drop in the fourth quarter.”
Batten Down the hatches folks….This is going to be a very scary ride if Scotland stays anchored to the UK.
It also explains the sudden sell off of the highest proportion ever of North Sea Oil licences!
If we stay in this doomed union…we will be the Ship going down with the Rats! And don’t come complaining to me that I didn’t warn you!!!
Money Week: The End of Britain
This Is Money: 100Bn Black Hole, and BoE World War pronouncement
For Max Keiser fans…This one is for you.
Auld Acquaintance 
Phew. Always nice to get a bit of light reading in the morning. I constantly wonder when (or if) the Better Together bunch will attempt to come up with their “vision” of life continuing under their beloved Union. Something by Hieronymus Bosch maybe?
I’ve been warning people about this for years but have never had the proof. Do you have any links to your warnings?
Yes i put a link at the bottom…the article itself also references others, and the additional comments I made are all easily searchable
Check the McCrone report regarding some of the potentials regarding a rUK reaction to Scotland threatening to take the oil away.
Makes the bombing of airports seem almost credible.
Dangerous times for the world not just the Scots. Parallels with the 30s etc.
If rUK turned hostile do you seriously think we could defend ourselves?
Paranoia indeed, yet highly credible given historical precedents here and elsewhere in the world.
Regards
I cannot for one moment see the rUK taking aggrecive action of that nature against an Independent Scotland…Would really put them in the shit in this day and age..
apart from that highly unlikely scenario..Scots are far better left arguing amongst ourselves..United agaisnt a common foe and unjust attack…Hell to Pay!
.A concentrated attack of that nature would be worse than attacking the Taliban!!
Scots all over England and Wales, many Scots descendants… Their own infrastructure would be in ruins!
Plus the millions in the Scots Diaspora across the globe.. kicking off..
It would make Palestine seem like a kiddies tea party!
So No….Certainly no concerns on that score whatsoever.
Holy crap!……that is one hell of an interesting thought.I was puzzled why the media was in overdrive about Scottish EU membership this time(they do it every month and a half) wich in a sense is a reletavley moot point,because IN the EU……OUT the EU……..i dont see it as a deciding factor on the independence referendum,certainly not for me anyway,and i imagine the same for many others too…….So if the UK loses its AAA credit rating……does the shit hit the fan??
If and when the UK loses it’s AAA rating…It means that repayments on it’s debts will Increase very significantly…as the interest repayments will be much higher…and given the sizeable amount that the Government is continuing to borrow, which has increased year on year…It means having billions of extra to pay back, which we have not got!
Eventually, even with Cuts to everything, there comes a point where they can cut no more!
Also having sold off everything, there will be nothing left to sell.
The rate of inflation will rocket, the ability to purchase will fall,and people will be fighting to hold onto their homes…
That will happen…and sooner than later…Once that starts to kick off!!! Watch out!!!! ONE ALMIGHTY CRASH
Anyone tuning in to the Keiser Report on Russian tv will be aware of the perilous state of this country.
It occurs to me that the Tories in power just don’t care. They are content to destroy the security of the the people in order to reduce the public sector, sell off the remaining public assets and turn the UK into some kind of libertarian hell hole where only the one percent live with any kind of security and ‘dignity’.
The disturbing thing about the article you cite is that it is an advertisement. It may be true. However the apocalyptic language is there to coerce you into buying something.
It is very well known for its marketing…So I have no problem with them trying to sell their product…A very American way of doing this..which doesn’t sit well in this country…But the facts are backed up, and other well known Economists and Financial analysts agree.
Someone mentioned the Kaiser Report on Russia Today…I could have linked to that…But it’s over the top style of reporting is even worse in my book!
It’s content is perfectly fine…Its just how it’s delivered..annoys the hell out of me..
If anything Kaiser was even more Imminently Apocalyptical than Money Weekly.. And cited the Collapse of the UK Bond Market as being the Crashing point.. He reckons it will be the biggest market collapse in World History. And that is going some!!
I must admit tyo being a bit of a fan of Max Keiser. I find his “presentation” style well rather “interesting”. Love him or hate him though there is one thing that there can be no doubt about and that is that he HATES Cameron and Osborne with a vengence. I find cthis most refershing. Someone on TV who is not afraid to speak his mind about world leaders. They are still allegedly world leaders aren’t they?
I can see in Max how people can dislike hom or jis presentation style. For me I put it down to, at least to some degree, his poacher turned gamekeeper approach. Having spent many years working within Wall Street before moving tyo the world of TV.
To be fair though he does seem to have a general hatred of almost everything Wall Street rerlated as well as London City related. That in itself can not be a bad idea. Both these area have got away with absolute financial murder for decades in my view. The time has come for someone to speak out against them. If governments will not or are too afraid to then I’ll be happy for Max to pick up the cudgel. 😀
He is just not my Cuppa…But can’t fault him for his knowledge in the area or presenting uncomfortable home truths..Just a Bit over the top for my particular liking 🙂
Additionally, in the same way that terror threats keep the population cowed and scared and willing to hand over their freedoms to a malign state so it is with the threat of financial Armageddon. In the near future they will be telling us if we vote Yes it’ll be financial disaster for all of the UK. Is this a reason to vote no? to be permanently chained to the malign Westminster?
As has always been the case, it’s in Westminster’s interests to keep Scotland down, to prevent our economy from succeeding, To keep us in chains.
It’s in their Interests because we are their lifeboat!
redirect all our resources to keep them going,while stripping any surplus wealth away from our population
What are they hiding? Good question.
“Just last year in Hungary, facing a debt crisis similar to our own, the government nationalised all pensions. In effect, they confiscated people’s savings”
This is indeed a major worry. But the best way to avoid this happening is for government to make sure there is DEMAND IN THE ECONOMY. This means more government policies to stimulate growth! So lets see a stamp duty holiday for construction firms building start-up homes. Lets see VAT being cut ahead of x’mas to make sure we get the most out of a consumer rush during holidays!
And also: slow down the public sector lay offs! We can only lay them off in line with private sector job creation!!! Otherwise you will see unemployment benefits instead of tax receipts going up!
So in short: the UK government is getting it wrong.
If you actively pursue policies that simply grab off people, you will eventually leave them with nothing. If they arfe unable to produce or to spend, it creates more damage to the economy in a downward spiral.
However, there hasn’t been a British Government in decades which has actually put its own people to the forefront of its policies,and increasingly they have built a debt trap…
The whole idea of letting Industry fail and centering everything around the Financial market place in the City of London was false economy, and it is coming back to wreck vengeance now on the whole State.
Thatcher once famously said that there was no such thing as Society…Well she may yet be proven right..as Society will be destroyed.
“Because when you add in all of Britain’s “unfunded obligations” – promises the Government has made on things like public sector pensions – our debts swell to 900% of our economy. That’s right – when you add everything up, we owe TEN TIMES what our entire economy is worth.”
Um, last time I checked, 900% was NINE times something. I’d take these people’s claims of financial genius with a pinch of salt…
Rounding up probably
900% is 10 times something, as 100% is 2 times something.
The recent IFS report in November hinted at this problem:-
“The referendum on Scottish independence will take place in the following fiscal context (taking March 2012 OBR forecasts):
. UK public borrowing will still be at around £75 billion in 2014–15.
. 2014 will be in the middle of a prolonged period of spending cuts. The UK government will be planning at least two further years of cuts after the 2014–15 fiscal year.
. If things go according to plan, the UK’s structural deficit should be closed by somewhere around 2017.
. On the other hand, accumulated national debt will be over 76% of national income in 2014–15 and still over 74% in 2016–17/8 it will not fall back to pre-crisis levels for a generation.”
It also noted that Scotland would be “significantly” better off than the rest of the rUK upon Independence. Scotland will still have a debt problem. Even if Scotland stays with the Union then it will be 30 long years to get back to pre-2008 levels…rUK on her own? Well that the question.
The IFS report, not even a month old..Is already out of date.
Osbournes Autumn statement conceded that his forecast for growth this year was not going to happen,and indeed we will finish the year at 0.1 deficit for the year. In effect the austerity measures were not working, and this article I have quoted from explains why that is the case.
Instead Osbourne announced that his projection for the structural deficit would now extend to 2018.
Even since Osbournes Statement, there have been reports, that even working on his figures, his current budget has a £100Billion Black Hole In it!
In Short….Its All a whole load of Hogwash!!
Even on this course…It is so bad that the Bank of England have labelled it as catastrophic as a World War!
Yes, the situation is dire, the UK total debt is a ticking time-bomb and some of us have tried to warn of the inevitable melt down from as far back as when Thatcher and Reagan began championing the Monetarist madness of the Austrian/Chicago schools back in the 80’s.
To put it as succinctly as I can, the basic mindless mantra was:
“We don’t need to create genuine wealth any more, we can get by just by servicing each other’s jacksies. Johnny foreigner can generate the genuine wealth, then give us money for providing some of the aforementioned services to them and we can then buy anything we need off them. Of course, those services will have to be sufficiently obfuscated so that they don’t ever see what is going on or get the idea they can provide them for themselves, but we can easily do that because of our intellectual superiority, oh! and we don’t like the word ‘scams’.”
As a physicist, I have likened this in the past to the concept of the ‘Perpetual Motion Machine’, where one can create a machine which ‘does work’, i.e. uses energy, but without anyone having to put energy in.
In this analogy, genuine wealth, i.e. all the things we use in life (that which is manufactured, farmed, mined for, drilled for, hunted for, gathered or built) becomes the equivalent of energy in the perpetual motion machine.
With sufficient obfuscation some systems, Heath Robinson like contraptions, can give the temporary illusion that energy for nothing is actually possible – for a time. Ultimately, the flaw in the design becomes apparent, with embarrassing consequences for the designer.
Genuine wealth/goods constitute the base energy units of economies and inevitably, a system which does not have its own supply will grind to a halt whenever external providers tire of keeping the illusion alive.
The analogy falls down a little, where, in the case of the scientific community there are too many genuinely knowledgeable people available to point out the flaws in any perpetual motion concept and although there will still be a few unfortunates duped into investing in such things before that takes place, the overall damage is limited.
To be fair to our main neighbouring Continental States, France, Germany etc. were extremely sceptical about the neo-Anglo-American model with some Finance Secretaries describing it as lunacy and condemning the Hunt-the-lady-booths/Casinos that are New York and London.
Thank goodness too (don’t be persuaded by the European ineptness argument made by our dear leaders, disproportionate hits taken by highly tourist dependent economies in the Med. region are symptomatic, not causal, regarding the financial crisis).
Ironically Economics is often referred to as the ‘Queen of Sciences’ but it is, at best, a pseudo-science lorded over by self-deluded Shamans and an acolyte mediocrity.
It could easily be given a rigorous logical basis and become a true science, however that would require it attracting those with a genuine scientific mindset.
Unfortunately the problems presented in optimising economic models are not sufficiently interesting to genuine scientists, the solutions are just too simple.
Instead, the UK and to a certain extent US economic strategy, is left to a bunch of in-bred nincompoops whom, by and large, have been rendered emotional husks by a Public School System which leaves them only with ludicrously anachronistic concepts of birthright, privilege and right to rule.
In truth, that system, by insulating them from the real world, ensures they are singularly ill-equipped for the roles they assume. But then how daft does that make the electorate?
To illustrate the full plight of the UK in regards to total debt, here is a chart produced by Morgan Stanley analysts a year ago now:
Main point to note is the huge proportion of total debt, about 70%, which exists in the finance sector. It’s also worth noting that Government debt is less than the European average.
First thing the Yanks (NY) did when the credit crunch hit was to take three steps backwards and allow London to become the No 1 Financial Centre in the world. This, pathetically viewed as something to take pride in by the Brit dafties, could only be construed as being in anyway indicative of a ‘special relationship’ between America and the UK if one considers what Americans usually mean by the word ‘special’.
Now American corporates are queuing up to sue Britain (i.e. Londonia) for lack of financial regulation in the City. Duh! With friends like that who needs enemas.
So, why has the UK kept its AAA?
First, the World financial sector is terrified what will happen when the UK gilt/banking bubble bursts. They are even more scared of that than the US student debt bubble.
Second, the rating agencies rely to a large extent on commissioned work by the UK (and US). Interestingly, the one independent agency which does not, downgraded the UK from AAA some time ago.
Oh! and Merry Christmas.
And a Merry Christmas to you too chicmac 🙂
Further to the Article…This Is Money reported the 100Billion Black Hole in the Budget…and the Bank of England pronounced things are so bad that they consider it’s impact to be that of a World War on our Economy…Which our Grand Children will still be struggling with its effects!
We are Better Together? Aye Sure!!!
I have added the Link to that of Money Week for those who want to see it.
I was wondering why the Better Tohether squad had gone rather silent recently on the idea that an Independent Scotland would lose the UK’s AAA rating. Now I know there will be NO AAA for Scotland to lose as the UK will not actually hold a AAA rating when we vote in 2014. No doubt their next attack will be an Independent Scotland will not be able to retain the BBB rating, or whatever rating, that UK has in 2014. Lunatics led by delusionists!
Yup!!
Added Max for you 🙂
Thanks for that! 😀
And for those Max Keiser fans ….I am now adding his take on this.
Brilliant Max. One questions the value of the Economist’s Front cover “SKIINTLAND” after listening to that. Was that just another early warning of the BritNat SMOKESCREEN?
The Economist article is just another of the very many pieces of misinformation, down right lies and propaganda that the British Media provides for the UK government on a daily basis.
How the hell do we extricate ourselves and protect ourselves from this financial house of cards post independence?
We’ll still be welded to a European fiscal system / worldwide financial system that brings money into existence as debt meaning there can never be enough in the system to pay back the interest – leading to the inevitable boom and bust cycle.
I appreciated the steps taken in Iceland to hold the banks responsible for their own mess, and the debt forgiveness/solutions found to stop people losing their homes en masse. But as a very small, contained economy perhaps they can do this. Could we?
And what debt level can we expect to “inherit” from Westminster? Can we just tell them to get stuffed if it’s a preposterous amount?
Our proportion of the debt will be approx 10% …though goodness knows how much they will have piled on by 2014? We will manage though.
We wont work exactly the same as Iceland in that respect, but I am sure we will be following similar policies. I am writing an article soon on what we may aspire to..I don’t want to give too much about it away at the moment..But hopefully It will help answer some of your question.
I look forward to it. We need a new politik post independence to stop our country being at the whim and mercy of credit agency ratings and boom/bust economics. Now if we had just won in 74 and built up that oil fund like Norway…
Nothing stopping is building one of our own..But I suspect it will take a few years post Independence before we can start thinking along those lines now.
In any case, there are many other things we need to look at improving, and part of the process will be examining what they are, and how best to set about achieving them..
It will be exciting days indeed…but no bed of roses unfortunately. Still..we will be able to be go forwards with optimism.
Am I not allowed to post links as my post/s go AWOL?
No idea the prob with your links? Others manage it..and I am not sure trying to prevent you…puzzling one?
We don’t necessarily need to take on ANY of the FUK’s debt. The Baltic Republics declined to take any of the FUSSR’s debt. Not a penny. OK we won’t get a share of the ferrero rochythingys, but, so? 8.6% of Trident – am I bovvered? Money in bulk is just pixels and paper. Keep an eye on what is real – energy resources, productive land, fisheries, factories, mines, educated creative people. All the rest is just ‘sound and fury’. Interesting times.
The authors of the quoted article, like the Taxpayers Alliance and similar groups, don’t use a definition of “debt” recognised by any government. They mix and match private and government debt (and remember, not all of that scary 900% number is debt) to make a good scare story. Typical Tea Party nonsense.
Government debt is scary enough for most people without inventing new definitions, but it isn’t scary enough for the Tea Party crowd because the normal ways of defining and measuring debt show that scary as it is, it isn’t at unprecedented levels. The Royal Economic Society have a page showing the historic changes in govt debt over recent centuries: http://www.res.org.uk/view/article5jan12Correspondence.html Obviously the current figure is bad, but it isn’t anything like as bad as it has been following major wars, as can be seen from 1816’s 260% of GDP, 1923’s 175% of GDP and 1945’s 225% of GDP.
Teabaggers want people to believe that the Welfare State needs to be killed to save us all from the Debt Crisis. To do that they cheerfully lie about things to scare people into doing things they wouldn’t otherwise do, like letting pensioners freeze to death and harassing the disabled unemployed. But as the historic numbers show, the Welfare State was created at a time when government debt was far higher in real terms than it is today. Sure, it demanded sacrifices to create the Welfare State, and it will demand sacrifices to keep it. But what’s the alternative?
Please don’t let these people scare you into doing something you’ll come to regret, whether that’s voting No in 2014 or letting them and their allies destroy the Welfare State.
Oh bugger, wished I’d read your succinct post instead of writing a rambling post essentially saying the same as yourself without the concision!
I think both Johns have got the wrong end of the stick for my argument… You will note that I referred to their misguidedness in appropriating the reasons for the debt to the welfare state..However, while they have been at times overplaying their hand just a tad, The fact is..Britain is well and truly Goosed..They aren’t wrong in that.
The other links, provide a somewhat less sensational response, but basically say the same thing.
Have a read at my article for today…and see where this fits in with what has been done by successive British governments who have been following the type of course the City Financiers have been advocating.
SCARE MONGERING TRIPE. SCOTLAND IS JUST AS IN DEBT AS THE REST OF THE UK IF NOT MORE.
What an excellent example of detective work.
Yesterday, the BritNat Mouthpiece, aka the BBC, spent our tax pounds advertising/heralding a huge increase in the UK’s part time employment rate on behalf of the UK’s second successive unelected government. Not once did it or the quoted House of Commons state that these phony numbers were for Q3, (July, August & September) otherwise known as the London 2012 Olympics.
To K above: Scotland has no debt. Until Scotland has the power to borrow money or it fails to balance it’s books, it remains debt free other than the massive debts run up by being a sub Region of the failing UK. The £21+ billon wasted on the London Olympics sports day added to the £4 billion London Olympic legacy fund & the massive 2012 Jubilees fiesta freebie & World Tours for the Windsor benefit junkies are not debts of Scotland. No wonder the UK & the BBC have proscribed these sums as above “TOP_SECRET”! Scotland has been in Credit to the UK since the 1960s. That cannot be said about the overheated, overpaid Corporate Tax evading South Eastern Corner of “Broken Britain” (David Cameron).
I’m truly sorry that the truth in the above article so offends your British nationalist sensibilities. I will pray that some day The British people (who have been squatting in England since 1066) will be given their own little enclave, a homeland if you will. Perhaps in a similar fashion to people of Israel?
What a lot of right/Libertarian nonsense. There’s more than a whiff of Ron Paulism in the article.
To deconstruct a little:
Debt is rolled over. We’re still paying for the Napoleonic Wars!
The main problem is off-balance debt, most of which is due to mismanagement of the banking collapse. They should have been put into administration, with no bail-outs. (I think John Redwood (ahem!) put it best when he described the U.K. as a medium-sized economy with two colossal banks attached – both of which are bankrupt.)
At present interest rates, which are negative in real terms, the debt is being inflated away. One of the first acts of the Coalition was to remove gilt-edged guarantees! why do you think they’d do that? Ask anyone living on a private pension who have seen the value fall by up to 40%. Banks and other institutions are buying, say £100 of Government gilts for a return, perhaps in 20 (or 50 or 100 years) which will be worth half that in real terms when the debt needs repaid. Which it won’t – it’ll be funded by issuing new debt.
The truth is – we need debt. Debt produces fiat currency, which can be manipulated, repackaged, sold on, or more ideally spent, say, in a huge infrastructure program – the U.K. was bankrupt after World War two – what did Labour do? Create the Welfare State, build housing, nationalise… are we poorer for that? We aren’t. (Or weren’t until the I.M.F. then Thatcher stepped in to asset strip) The debt bought tangible benefits. That’s not spelling error. The debt bought council housing, motorways, hospitals, etc.
This panic about debt is a pretence to destroy those institutions, to divide and rule. Shock Doctrine at work. There’s an agenda at play.
Don’t be fooled.
The government could easily invest £100 billion in infrastructure – “Oh but think of future generations saddled with all that debt” the Right wing shout. That’d be the future generations able to afford decent housing, better transport, better healthcare, universal childcare, living wages, job security… oh very scary indeed. If your a Right-wing anti-state Libertarian who thinks Ayn Rand is some sort of genius and not the drug-addled hypocritical monster she really was.
Westminster are following this path. All parties have the same broad agenda.
Fortunately, we can say “stop!” and vote yes in the Great Referendum and follow a radical, different path. What an opportunity!
Apologies for the post being a tad incoherent, I’ve had a poor sleep and this was one of the first articles that appeared in my RSS feed and felt compelled to question the assumptions made in the magazine article.
Cheers
Sorry to read of your poor sleep pattern. I hope is resolved very soon because it can be extremely debilitating as witnessed by my Spouse. I on the other hand have no such worries about sleeping at night.
On the topic of repaying debts: The UK’s World War II debts to the US and Canada are now paid in full before the close of 2006. The final payments of $83.25m (£42.5m) to the US and US$22.7m (£11.6m) to Canada were the last of 50 massive crippling instalments paid by the hard-pressed UK tax payer since 1950, despite two great recessions during that term caused by repeated fiscally & morally incompetent London regimes.
The amount paid back is nearly double that which the UK government loaned on behalf of an austerity ridden British people in 1945 and 1946. Another foul UK government elected in 1997, led the UK into two expensive atrocities on behalf of securities for the Western Oil & Gas corporations. The Debt level for these war crimes is now in excess of £1trillion. The only way for the UK hide that terrifying debt from it’s people, is to buy up it’s own Guilts/Debt/Bonds/Promisory/Never-nevers through borrowing even more. Ensuring fiscal suicide, but that’s a worry for some period in the future. It reminds me of the warped policies of Nuclear industry & Ostriches.