In the year to April 2015 Britain entered into a period of deflation. Over the last year retail prices have fallen by 0.1%. This is not such a bad thing provided the deflation is not deep and long lasting. You may well ask why £385 billion of quantitative easing or money printing did not create inflation. Well it did; it inflated the price of houses, commercial property and stocks and shares. Of course, when the price of baked beans goes up it is a bad thing as far as economists are concerned but when house prices go up it is a good thing.
House prices going up is a good thing if you already own a house but it is not so good if you are a young couple paying £1,000 a month for a grotty flat because you can't afford to get on the bottom rung of the housing ladder.
House prices going up can also be a bad thing if they create a property bubble which when it bursts causes distress selling and repossessions. A property bubble could also bring on another financial crisis. Private borrowing to fund housing stands at almost £2 trillion. This level of debt is becoming unsupportable. We could be heading for trouble.
The causes of retail price deflation are a reduced oil prices, supermarket competition and the high level of the pound which reduces the price of imports. If deflation gets out of hand it will be difficult for the Bank of England to use the traditional policy of reducing interest rates to create inflation as rates are at an all time low. Perhaps some more money printing will do the trick but this time the money should be given to the non-banking sector. The non-banking sector will spend the money on investment and purchases rather than property. Prices will then go up in the retail sector.
We need a bit of deflation in the property market and a little inflation in the retail market. The financial authorities should act now to achieve this. Inflation at 2% will help to relieve the debt burden for all of us.
Tuesday, 19 May 2015
Thursday, 7 May 2015
UK 2015 General Election - 35% won't vote but who can blame them?
This has been the most dreadful and arid general election campaign that I have ever experienced. The only thing that the politicians want to talk about are unrealistic promises and the budget deficit.
With regards to the budget they seem to be acting like amateur bookkeepers. None of the politicians have talked about using national funds to improve the economy to help the incomes of the majority of our citizens.
Any economy must be a mixture of both capitalist and social enterprise. We need capitalism to generate wealth and we need social enterprise to provide the best infrastructure of transport, health and education to support wealth generation. There seems to have been no debate whatsoever on how this can be achieved.
There has been no debate on the best methods of distributing the national income or the economics of how to do this. It is apparent that in the last 30 years income has trickled up from the poor and the middle classes to the very rich in a form of reverse economic communism. There has been no real attempt to regulate this. Neo-classical economic thinking has become entrenched within the thinking of all political parties. This form of economics of "laissez-faire" thinking has failed us completely. The efficient markets hypothesis has almost led us into economic oblivion just as surely as it did in 1929. Our politicians have nothing to offer us as an alternative. There has been no public debate.
The British economy is progressing towards another property asset bubble. UK individual private debt is approaching 2 trillion pounds this sum is greater than government debt. Add to this another 2 trillion of corporate debt and the economy looks weaker. The UK banks are exposed to about 6 trillion pounds of above the line debt with possibly another few trillion pounds of below the line debt. All this adds up to the possibility of the UK economy crashing again if there is another financial crisis.
The 2008 financial crisis was not caused by government debt it was caused by Banks being unable to fund their debts because their counter balancing assets were mostly junk. Since 2008 the situation for Britain has hardly improved. The public are blissfully unaware of this and the politicians have buried their heads in the sand and are living in hope. They have no plan to improve the private balance sheet of UK incorporated. They can only talk about a couple of billion here or there on the government accounts.
The 350 billion pounds of quantitative easing spending which was not voted for by anybody has been used by the Banks to invest in property and the stock market and this is creating new asset bubbles in both markets.
In the 1960s the two major parties boasted about their house building programmes and vied with each other to build more houses. They actually achieved this.
In the 1960s the balance of payments was a key issue in the election. No party would have dreamt of allowing the means of industrial production to be relocated overseas; both parties would have seen the danger of this but of course neo-classical economics was not so prominent.
In the lead up to the UK joining the Common Market we saw discussion of the pros and cons in every election campaign. When we joined the EU no one worried about free movement of labour or immigration. We were a much more generous minded society then even though we were not as rich.
In the elections during the 60s and 70s foreign policy was high on the agenda; we thought carefully about going to war or bombing another country to achieve a diplomatic aim. Both the Conservative party and the Labour party kept us out of the Vietnam war and our country was the better for it.
In the 1960s and 1970s our country would not have supported an extreme right wing government in the Ukraine without full discussion and the approval of the British people. The memory of the second world war was still too painful.
The newspapers , media and the political parties seem to be frightened to talk about foreign policy and Britain's future relations with the World and Europe. All they want to talk about is their obsession with budget deficits.
Large swathes of our youth live in a country which cannot provide them with any sort of decent home or a steady job. They face living with their parents for extended periods or flat sharing in poor quality and expensive private housing. Their future looks bleak but where is the plan to get them out of this predicament? There isn't one and no one is talking about it.
Millions of people are relying on food banks or loans (gifts) from their family and friends to help them get by - what sort of future do they have? This is not up for discussion in the election.
Not even the Green party has talked about climate change and if this issue is not tackled by all of us then any talk of the economy and bookkeeping is academic. There will not be an economy.
35% of people won't vote in the 2015 election can you blame them? The politicians have failed us but worse of all we have failed ourselves.
With regards to the budget they seem to be acting like amateur bookkeepers. None of the politicians have talked about using national funds to improve the economy to help the incomes of the majority of our citizens.
Any economy must be a mixture of both capitalist and social enterprise. We need capitalism to generate wealth and we need social enterprise to provide the best infrastructure of transport, health and education to support wealth generation. There seems to have been no debate whatsoever on how this can be achieved.
There has been no debate on the best methods of distributing the national income or the economics of how to do this. It is apparent that in the last 30 years income has trickled up from the poor and the middle classes to the very rich in a form of reverse economic communism. There has been no real attempt to regulate this. Neo-classical economic thinking has become entrenched within the thinking of all political parties. This form of economics of "laissez-faire" thinking has failed us completely. The efficient markets hypothesis has almost led us into economic oblivion just as surely as it did in 1929. Our politicians have nothing to offer us as an alternative. There has been no public debate.
The British economy is progressing towards another property asset bubble. UK individual private debt is approaching 2 trillion pounds this sum is greater than government debt. Add to this another 2 trillion of corporate debt and the economy looks weaker. The UK banks are exposed to about 6 trillion pounds of above the line debt with possibly another few trillion pounds of below the line debt. All this adds up to the possibility of the UK economy crashing again if there is another financial crisis.
The 2008 financial crisis was not caused by government debt it was caused by Banks being unable to fund their debts because their counter balancing assets were mostly junk. Since 2008 the situation for Britain has hardly improved. The public are blissfully unaware of this and the politicians have buried their heads in the sand and are living in hope. They have no plan to improve the private balance sheet of UK incorporated. They can only talk about a couple of billion here or there on the government accounts.
The 350 billion pounds of quantitative easing spending which was not voted for by anybody has been used by the Banks to invest in property and the stock market and this is creating new asset bubbles in both markets.
In the 1960s the two major parties boasted about their house building programmes and vied with each other to build more houses. They actually achieved this.
In the 1960s the balance of payments was a key issue in the election. No party would have dreamt of allowing the means of industrial production to be relocated overseas; both parties would have seen the danger of this but of course neo-classical economics was not so prominent.
In the lead up to the UK joining the Common Market we saw discussion of the pros and cons in every election campaign. When we joined the EU no one worried about free movement of labour or immigration. We were a much more generous minded society then even though we were not as rich.
In the elections during the 60s and 70s foreign policy was high on the agenda; we thought carefully about going to war or bombing another country to achieve a diplomatic aim. Both the Conservative party and the Labour party kept us out of the Vietnam war and our country was the better for it.
In the 1960s and 1970s our country would not have supported an extreme right wing government in the Ukraine without full discussion and the approval of the British people. The memory of the second world war was still too painful.
The newspapers , media and the political parties seem to be frightened to talk about foreign policy and Britain's future relations with the World and Europe. All they want to talk about is their obsession with budget deficits.
Large swathes of our youth live in a country which cannot provide them with any sort of decent home or a steady job. They face living with their parents for extended periods or flat sharing in poor quality and expensive private housing. Their future looks bleak but where is the plan to get them out of this predicament? There isn't one and no one is talking about it.
Millions of people are relying on food banks or loans (gifts) from their family and friends to help them get by - what sort of future do they have? This is not up for discussion in the election.
Not even the Green party has talked about climate change and if this issue is not tackled by all of us then any talk of the economy and bookkeeping is academic. There will not be an economy.
35% of people won't vote in the 2015 election can you blame them? The politicians have failed us but worse of all we have failed ourselves.
Monday, 20 April 2015
The plight of the migrants
Once again we are seeing the plight of migrants to Europe who are refugees escaping war and famine in the Middle East and Africa. The people attempting to cross the Mediterranean from Libya to Italy are desperate. No one risks their life to board a flimsy boat at the behest of people traffickers unless they are desperate.
The reaction of European governments to this humanitarian disaster has been shameful. Also I am ashamed of the reaction of some of my fellow countrymen to this issue. The people trying to come to Europe are not economic migrants who want to sponge off our society; they are desperate to survive. If they are allowed to remain in Europe then they will be more than glad to work and make a contribution to the societies that welcome them.
Western governments have contributed to the malaise in Africa and the Middle East by indulging in wars to try to contain conflicts and problems that they do not understand. This is exemplified by the bombing of Libya. Britain and France did not have a plan for restoring stable government in Libya after Colonel Gaddafi was deposed. Our governments did not understand the politics and the intervention led to disaster.
We do not understand Syria either; western governments have armed the opposition to President Assad without any understanding of the politics and have allowed Isis to obtain huge quantities of western arms , probably, for free. Before the Syrian crisis millions of refugees were not fleeing Syria despite the despotic nature of the regime. Everyone knew the risks of opposing the regime but those who kept their heads down were relatively safe. Most despotic states fail and self-implode and then the time becomes right to obtain genuine political change but imposed from within the state.
The resources which western governments expend on war would be better deployed by promoting peace and useful economic activity. The world must also tackle over population and climate change. The rich and powerful nations of the world have the ability to improve the economic lot of the poor nations and this will help to reduce over population and famine.
The rich nations also have it within their power to mitigate the effects of climate change to reduce pressure on food and water supplies and alleviate famine.
If we all thought rationally then we could find solutions to the problems of migration by promoting peace, economic development and an equable climate for all.
If we persist with the policy of only promoting self interest we are going to head for disaster. We will not solve the problems of Africa and the Middle East by allowing a situation where millions and millions of people are forced to migrate. Everyone would rather stay at home so lets make all homes comfortable enough so that no one needs to run away. Migration should an option for the adventurous rather than a necessity for the desperate.
The reaction of European governments to this humanitarian disaster has been shameful. Also I am ashamed of the reaction of some of my fellow countrymen to this issue. The people trying to come to Europe are not economic migrants who want to sponge off our society; they are desperate to survive. If they are allowed to remain in Europe then they will be more than glad to work and make a contribution to the societies that welcome them.
Western governments have contributed to the malaise in Africa and the Middle East by indulging in wars to try to contain conflicts and problems that they do not understand. This is exemplified by the bombing of Libya. Britain and France did not have a plan for restoring stable government in Libya after Colonel Gaddafi was deposed. Our governments did not understand the politics and the intervention led to disaster.
We do not understand Syria either; western governments have armed the opposition to President Assad without any understanding of the politics and have allowed Isis to obtain huge quantities of western arms , probably, for free. Before the Syrian crisis millions of refugees were not fleeing Syria despite the despotic nature of the regime. Everyone knew the risks of opposing the regime but those who kept their heads down were relatively safe. Most despotic states fail and self-implode and then the time becomes right to obtain genuine political change but imposed from within the state.
The resources which western governments expend on war would be better deployed by promoting peace and useful economic activity. The world must also tackle over population and climate change. The rich and powerful nations of the world have the ability to improve the economic lot of the poor nations and this will help to reduce over population and famine.
The rich nations also have it within their power to mitigate the effects of climate change to reduce pressure on food and water supplies and alleviate famine.
If we all thought rationally then we could find solutions to the problems of migration by promoting peace, economic development and an equable climate for all.
If we persist with the policy of only promoting self interest we are going to head for disaster. We will not solve the problems of Africa and the Middle East by allowing a situation where millions and millions of people are forced to migrate. Everyone would rather stay at home so lets make all homes comfortable enough so that no one needs to run away. Migration should an option for the adventurous rather than a necessity for the desperate.
Thursday, 16 April 2015
UK Economics 2015
All of the opponents in the UK general election have ignored some disturbing facts about the UK economy: productivity is down and the trade deficit or balance of payments deficit is up. They have few or no real policies to improve either.
Productivity was down by 0.2% for the last quarter of 2104 and overall our productivity as a nation is insufficient to get the economy moving and reduce our budget deficit and national debt.
To improve productivity we must invest in skills, manufacturing equipment, infrastructure, house building, new products and the means to bring new products to the export and domestic markets. An improvement in productivity will enable our nation to compete more effectively in international and domestic markets. It will also allow us to reduce the debt burden.
It is apparent that very little of the £375 billion of quantitative easing (QE) generated by the Bank of England has been directed at investment in the real economy. Such a large input of liquidity into the economy should have generated some inflation in the real economy - so far it has not. Inflation helps to reduce the burden of debt. The billions spent on QE have been used by the banks to support their balance sheets by investing this money in the stock and property markets. The effects of QE are to artificially inflate asset prices in the property and stock markets. This form of inflation is not included in the inflation statistics therefore there is no real pressure on the Bank of England to control it. We are in danger of creating new asset bubbles just like we did prior to 2007.
QE is benefiting property speculators and financiers rather than industries in the real economy who produce goods for sale or build roads, railways and hospitals etc..
When it is more productive, the real economy generates more higher valued jobs and this means that the government needs to spend less on social benefits.
http://uk.reuters.com/article/2015/04/01/uk-britain-employment-productivity-idUKKBN0MS48J20150401
Linked to productivity is the balance of trade deficit. For the month of February 2015 Britain's overall balance of trade deficit was £2.859 billion up from £1.536 billion in January. Our exports to the US fell in February 2015. Every year Britain records enormous balance of trade deficits and this means that we are not paying our way as a nation and we have to live on credit. Poor productivity along with the higher value of the pound contributes to the balance of trade deficit.
Huge amounts of hot money are continuing to come into Britain to fuel financial speculation; this increases the value of the pound and makes our goods more expensive in export markets. Our pound is not increasing in value because we are running a trade account surplus. Hot money is not being used to fund the real economy therefore productivity suffers and the balance of trade suffers too.
http://www.tradingeconomics.com/united-kingdom/balance-of-trade
We need a new economic model of capitalism which generates wealth in the real economy. Our governments have almost left the running of the economy to the Bank of England who are using interest rate policy and QE to try to regulate financial matters only. We need the Treasury and the Department of Business to get more involved in running the economy. Monetary policy alone will not solve the structural problems of the British economy: we need to become more productive. A central bank cannot be expected to direct monetary policy towards this end. Fiscal policy must become more involved again. It was a mistake to allow the central bank to determine economic policy as it is more concerned with protecting finance rather than industrial investment.
The next government of the UK must rescue fiscal policy and industrial investment as part of a completely coherent economic and monetary policy to control supply and demand and investment in the real economy and its workers.
None of the political parties in this election have mentioned the trade deficit or the failure of Britain to improve its productivity. It almost seems as if the political establishment has given up promoting sound and stable economic development. Our politicians seem only interested in arguing about book keeping rather than using the money of the nation to create real wealth. They are thinking more like sales ledger clerks than management accountants. If they continue in this vein there is not much hope for a real economic recovery. Long term stagnation,lost opportunity and continuing poverty for a substantial proportion of the population could be the unfortunate result.
It is time for the politicians to have the courage and nous to wrest back economic power from financial speculators and grant it to the wealth creators in the real economy of entrepreneurs and workers alike.
Productivity was down by 0.2% for the last quarter of 2104 and overall our productivity as a nation is insufficient to get the economy moving and reduce our budget deficit and national debt.
To improve productivity we must invest in skills, manufacturing equipment, infrastructure, house building, new products and the means to bring new products to the export and domestic markets. An improvement in productivity will enable our nation to compete more effectively in international and domestic markets. It will also allow us to reduce the debt burden.
It is apparent that very little of the £375 billion of quantitative easing (QE) generated by the Bank of England has been directed at investment in the real economy. Such a large input of liquidity into the economy should have generated some inflation in the real economy - so far it has not. Inflation helps to reduce the burden of debt. The billions spent on QE have been used by the banks to support their balance sheets by investing this money in the stock and property markets. The effects of QE are to artificially inflate asset prices in the property and stock markets. This form of inflation is not included in the inflation statistics therefore there is no real pressure on the Bank of England to control it. We are in danger of creating new asset bubbles just like we did prior to 2007.
QE is benefiting property speculators and financiers rather than industries in the real economy who produce goods for sale or build roads, railways and hospitals etc..
When it is more productive, the real economy generates more higher valued jobs and this means that the government needs to spend less on social benefits.
http://uk.reuters.com/article/2015/04/01/uk-britain-employment-productivity-idUKKBN0MS48J20150401
Linked to productivity is the balance of trade deficit. For the month of February 2015 Britain's overall balance of trade deficit was £2.859 billion up from £1.536 billion in January. Our exports to the US fell in February 2015. Every year Britain records enormous balance of trade deficits and this means that we are not paying our way as a nation and we have to live on credit. Poor productivity along with the higher value of the pound contributes to the balance of trade deficit.
Huge amounts of hot money are continuing to come into Britain to fuel financial speculation; this increases the value of the pound and makes our goods more expensive in export markets. Our pound is not increasing in value because we are running a trade account surplus. Hot money is not being used to fund the real economy therefore productivity suffers and the balance of trade suffers too.
http://www.tradingeconomics.com/united-kingdom/balance-of-trade
We need a new economic model of capitalism which generates wealth in the real economy. Our governments have almost left the running of the economy to the Bank of England who are using interest rate policy and QE to try to regulate financial matters only. We need the Treasury and the Department of Business to get more involved in running the economy. Monetary policy alone will not solve the structural problems of the British economy: we need to become more productive. A central bank cannot be expected to direct monetary policy towards this end. Fiscal policy must become more involved again. It was a mistake to allow the central bank to determine economic policy as it is more concerned with protecting finance rather than industrial investment.
The next government of the UK must rescue fiscal policy and industrial investment as part of a completely coherent economic and monetary policy to control supply and demand and investment in the real economy and its workers.
None of the political parties in this election have mentioned the trade deficit or the failure of Britain to improve its productivity. It almost seems as if the political establishment has given up promoting sound and stable economic development. Our politicians seem only interested in arguing about book keeping rather than using the money of the nation to create real wealth. They are thinking more like sales ledger clerks than management accountants. If they continue in this vein there is not much hope for a real economic recovery. Long term stagnation,lost opportunity and continuing poverty for a substantial proportion of the population could be the unfortunate result.
It is time for the politicians to have the courage and nous to wrest back economic power from financial speculators and grant it to the wealth creators in the real economy of entrepreneurs and workers alike.
Monday, 13 April 2015
UK General Election 2015
The UK general election is not tackling the real issue which Britain faces, which is the problem of private debt. It is only concentrating on government debt. We are being treated to arguments about minor differences about how much the government should spend and tax over the course of the next parliament or 5 years, if the next parliament lasts that long even though there is a legal obligation for a government not to resign.
At present the whole of the British economy generates about £1.6 trillion in one year. Our public national debt is some 80% of GDP which is around £1.3 trillion. £1.3 trillion is a colossal sum of money which results in interest payments of around £48 billion per year which the government must finance before it spends any money on welfare, the national health service, education and etc.
The UK's total annual spending is about £714 billion pounds. The budget deficit is around £100 billion as the government raises just over £600 billion pounds in taxes.
The difference between the political parties' spending and tax plans is around £12 billion per year. They are arguing about a tiny proportion of the national debt and the public sector borrowing requirement.
http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom
http://www.ukpublicspending.co.uk/breakdown_2014UKbt_14bc5n
http://www.theguardian.com/business/2014/apr/23/uk-deficit-lowest-financial-crisis-osborne-budget
The national public debt of £1.3 trillion is dwarfed by private debt, which stands at over £5 trillion; this is almost unimaginable. Price Waterhouse predict that for the fiscal year 2105 total UK debt will rise to about £10.2 trillion. £1.4 trillion will be the national public debt and the rest will be private debt.
Households will owe £1.9 trillion mostly in the form of mortgages. These debts are secured but if another housing market bubble burst many of these debts will become un-secured or will have their collateral severely reduced.
Financial sector debt is predicted to be £4.2 trillion and although much of this debt is balanced by assets but a lot of those assets are at risk.
Non-financial companies owe £2.2 trillion and around half of this debt is secured against property.
Britain's total private and public debt has not reduced substantially since 2009 when the financial crisis was in full swing. In 2009 it stood at 543% of GDP and PWC predict that for 2015
it will be 536%. The balance sheet of Britain is still just as precarious as 2009.
http://www.theguardian.com/news/datablog/2010/nov/09/economicgrowth-debt-relief#data
The high level of private debt is crippling our economy by reducing the amount of credit that the Bank's can grant to small and mid sized companies.
The Bank's are in so much difficulty that the government of the UK has bought £375 billion pounds of gilts and mortgage backed securities from them. This £375 billion which has been spent by the Bank of England as part of its quantitative easing programme has shored up the Banks' balance sheets to protect the UK Banking sector from collapsing. Little of this money has found its way into the real economy to support businesses. If a substantial amount of this money had found its way into the real economy then we would have had inflation.
None of this £375 billion bonanza has been spent on a hospital, a care home, a library or a road.
This money was spent by both the Labour and Conservative governments between 2009 and 2012 without any real discussion and no-one voted for it. Why therefore are the politicians arguing about £12 billion?
One day we shall have to pay back the £375 billion of quantitative easing which the governments have borrowed on our behalf. To spend £8 billion on the NHS is chicken feed in comparison.
The level of private debt could create another dangerous asset bubble which if it bursts will create
such havoc that it could break our economy. We cannot afford to bail the Banks out again. None of our politicians want to talk about this . They are just living in hope that a little pruning of the budgets here and a little additional taxation here will somehow pay off all our debts.
In the future, we don't know when, interest rates will have to rise and when they do the whole economy will suffer again. Unfortunately this is an unavoidable consequence of too much private debt rather than public debt. No political party has an answer. In 2005 most politicians, economists and members of the public though the garden was rosy. In 2015 we would all be fools to think the same thing again. The trouble is there is no-one to vote for who has got any idea how we are going to balance the books of UK PLC. We need a new economic model of capitalism and quickly.
At present the whole of the British economy generates about £1.6 trillion in one year. Our public national debt is some 80% of GDP which is around £1.3 trillion. £1.3 trillion is a colossal sum of money which results in interest payments of around £48 billion per year which the government must finance before it spends any money on welfare, the national health service, education and etc.
The UK's total annual spending is about £714 billion pounds. The budget deficit is around £100 billion as the government raises just over £600 billion pounds in taxes.
The difference between the political parties' spending and tax plans is around £12 billion per year. They are arguing about a tiny proportion of the national debt and the public sector borrowing requirement.
http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom
http://www.ukpublicspending.co.uk/breakdown_2014UKbt_14bc5n
http://www.theguardian.com/business/2014/apr/23/uk-deficit-lowest-financial-crisis-osborne-budget
The national public debt of £1.3 trillion is dwarfed by private debt, which stands at over £5 trillion; this is almost unimaginable. Price Waterhouse predict that for the fiscal year 2105 total UK debt will rise to about £10.2 trillion. £1.4 trillion will be the national public debt and the rest will be private debt.
Households will owe £1.9 trillion mostly in the form of mortgages. These debts are secured but if another housing market bubble burst many of these debts will become un-secured or will have their collateral severely reduced.
Financial sector debt is predicted to be £4.2 trillion and although much of this debt is balanced by assets but a lot of those assets are at risk.
Non-financial companies owe £2.2 trillion and around half of this debt is secured against property.
Britain's total private and public debt has not reduced substantially since 2009 when the financial crisis was in full swing. In 2009 it stood at 543% of GDP and PWC predict that for 2015
it will be 536%. The balance sheet of Britain is still just as precarious as 2009.
http://www.theguardian.com/news/datablog/2010/nov/09/economicgrowth-debt-relief#data
The high level of private debt is crippling our economy by reducing the amount of credit that the Bank's can grant to small and mid sized companies.
The Bank's are in so much difficulty that the government of the UK has bought £375 billion pounds of gilts and mortgage backed securities from them. This £375 billion which has been spent by the Bank of England as part of its quantitative easing programme has shored up the Banks' balance sheets to protect the UK Banking sector from collapsing. Little of this money has found its way into the real economy to support businesses. If a substantial amount of this money had found its way into the real economy then we would have had inflation.
None of this £375 billion bonanza has been spent on a hospital, a care home, a library or a road.
This money was spent by both the Labour and Conservative governments between 2009 and 2012 without any real discussion and no-one voted for it. Why therefore are the politicians arguing about £12 billion?
One day we shall have to pay back the £375 billion of quantitative easing which the governments have borrowed on our behalf. To spend £8 billion on the NHS is chicken feed in comparison.
The level of private debt could create another dangerous asset bubble which if it bursts will create
such havoc that it could break our economy. We cannot afford to bail the Banks out again. None of our politicians want to talk about this . They are just living in hope that a little pruning of the budgets here and a little additional taxation here will somehow pay off all our debts.
In the future, we don't know when, interest rates will have to rise and when they do the whole economy will suffer again. Unfortunately this is an unavoidable consequence of too much private debt rather than public debt. No political party has an answer. In 2005 most politicians, economists and members of the public though the garden was rosy. In 2015 we would all be fools to think the same thing again. The trouble is there is no-one to vote for who has got any idea how we are going to balance the books of UK PLC. We need a new economic model of capitalism and quickly.
Tuesday, 24 March 2015
Intolerance to opinions
Lord Carey the ex-Archbishop of Canterbury is at the centre of a censorship controversy concerning his views on homosexual marriage. London's Kings College is considering to remove his photograph from an array of Alumni because student activists have opined that his views on gay marriage are offensive.
I am not a Christian and I am not opposed to homosexuals being married. I also believe that the church's views on this matter are wrong. However, it is not my church and church members should be allowed to express their opinion. In fact I believe that their opinions should be welcomed; the Church of England is not advocating that homosexuals should be imprisoned or sanctioned and it has not opposed the laws allowing secular homosexual marriage. I am prepared to debate the liberal and secular view with church members; there is no need to try to brow beat them into acquiescence.
Expressing an opinion about social values should not be condemned. There are no doubt some people who believe that 16 should not be the age of consent to marriage and that it should be raised to the age of 18 or whatever. Should they be condemned for expressing such and opinion? Some people believe that any sort of sex outside of marriage is sinful - should they be condemned too?
We have become an intolerant society which has been become too quick to condemn un-conventional opinions and too quick to stifle free speech. It seems that none of this is government inspired but it comes from a general shift of social mores. This is dangerous. Free speech is important and there is no need to stifle it by insulting someone or organising demonstrations against it. It is the job of a University to encourage free debate about social values.
Doctor Carey has been accused of being a hypocrite because he condemns racism but does not support homosexual marriage as if the two stances are equivalent. Well they are not. Racism stems from ignorance. There is no such thing as race when applied to human beings as all of us are members of the same sub-species. A University is perfectly entitled and in fact has a duty not to promote ignorance, therefore "racists" should be allowed a platform. Opinion about social behaviour and social values is a completely different matter; Christians and Muslims are perfectly entitled to their views as long as they do not try to impose their values on a secular society by force or sanction.
In my opinion there few forms of censorship which are justified excepting child pornography and incitement to hatred and violence. Where national security is at stake then censorship could also be justified but subject to judicial review. In most other cases censorship is not justified not matter how offensive the views are.
http://www.telegraph.co.uk/news/religion/11434880/Kings-College-London-facing-censorship-claims-amid-Lord-Carey-gay-marriage-row.html
Lord Carey or the present Archbishop of Canterbury cannot be accused of this below. It is preposterous to think that the Church of England is still a part of the middle ages.
http://www.petertatchell.net/religion/2000.htm.
This week we have seen the leader, Nigel Farage, of the UKIP party, being harassed when taking lunch with his family at a local pub.
http://www.bbc.co.uk/news/uk-england-32009961
Once again this reflects intolerance that has gone too far. I do not support Mr Farage's views about most things and I have no intention of ever voting for him. I support his right to express his opinions, however. He is not supporting the use of violence or inciting hatred and his party is a legitimate one which commands the support of a substantial minority of the electorate.
Mr Farage is entitled to eat his lunch in a pub in peace without being harassed by a mob. He is just as entitled to this as the Prime Minister or the Leader of the Opposition.
I regularly go to this pub for a Sunday lunch; the bar staff and the clientele are all reasonable and friendly people and country ramblers are welcome. Why should they have to put up with mob rule as well? If Mr Farage comes into the pub while I am there I will gladly leave him in peace to get on with family business or political business for that matter.
The best way to oppose his opinions is to vote for a party that does not share his views and there are plenty to choose from.
I am not a Christian and I am not opposed to homosexuals being married. I also believe that the church's views on this matter are wrong. However, it is not my church and church members should be allowed to express their opinion. In fact I believe that their opinions should be welcomed; the Church of England is not advocating that homosexuals should be imprisoned or sanctioned and it has not opposed the laws allowing secular homosexual marriage. I am prepared to debate the liberal and secular view with church members; there is no need to try to brow beat them into acquiescence.
Expressing an opinion about social values should not be condemned. There are no doubt some people who believe that 16 should not be the age of consent to marriage and that it should be raised to the age of 18 or whatever. Should they be condemned for expressing such and opinion? Some people believe that any sort of sex outside of marriage is sinful - should they be condemned too?
We have become an intolerant society which has been become too quick to condemn un-conventional opinions and too quick to stifle free speech. It seems that none of this is government inspired but it comes from a general shift of social mores. This is dangerous. Free speech is important and there is no need to stifle it by insulting someone or organising demonstrations against it. It is the job of a University to encourage free debate about social values.
Doctor Carey has been accused of being a hypocrite because he condemns racism but does not support homosexual marriage as if the two stances are equivalent. Well they are not. Racism stems from ignorance. There is no such thing as race when applied to human beings as all of us are members of the same sub-species. A University is perfectly entitled and in fact has a duty not to promote ignorance, therefore "racists" should be allowed a platform. Opinion about social behaviour and social values is a completely different matter; Christians and Muslims are perfectly entitled to their views as long as they do not try to impose their values on a secular society by force or sanction.
In my opinion there few forms of censorship which are justified excepting child pornography and incitement to hatred and violence. Where national security is at stake then censorship could also be justified but subject to judicial review. In most other cases censorship is not justified not matter how offensive the views are.
http://www.telegraph.co.uk/news/religion/11434880/Kings-College-London-facing-censorship-claims-amid-Lord-Carey-gay-marriage-row.html
Lord Carey or the present Archbishop of Canterbury cannot be accused of this below. It is preposterous to think that the Church of England is still a part of the middle ages.
http://www.petertatchell.net/religion/2000.htm.
This week we have seen the leader, Nigel Farage, of the UKIP party, being harassed when taking lunch with his family at a local pub.
http://www.bbc.co.uk/news/uk-england-32009961
Once again this reflects intolerance that has gone too far. I do not support Mr Farage's views about most things and I have no intention of ever voting for him. I support his right to express his opinions, however. He is not supporting the use of violence or inciting hatred and his party is a legitimate one which commands the support of a substantial minority of the electorate.
Mr Farage is entitled to eat his lunch in a pub in peace without being harassed by a mob. He is just as entitled to this as the Prime Minister or the Leader of the Opposition.
I regularly go to this pub for a Sunday lunch; the bar staff and the clientele are all reasonable and friendly people and country ramblers are welcome. Why should they have to put up with mob rule as well? If Mr Farage comes into the pub while I am there I will gladly leave him in peace to get on with family business or political business for that matter.
The best way to oppose his opinions is to vote for a party that does not share his views and there are plenty to choose from.
Partial Eclipse of The Sun
Last Friday I saw the partial eclipse of the Sun in Northern France. My special eye protection was completely useless. When I looked at the Sun through them I saw nothing. It was cloudy and the clouds were sufficiently dense to obscure the Sun so that I could view the eclipse safely without the use of special equipment. At times the clouds obscured the Sun completely. Towards the end of the eclipse the clouds thinned out and even a direct glance would probably have been dangerous. My instincts kicked in, in any case, and I averted my eyes without even thinking about it.
At one point 80% of the Sun was covered by the Moon. I could swear that I perceived the Moon as a sphere rather than a flat object. The Sun appeared three dimensional too; a little bit like an ice cream scoop. I cannot for the life of me understand why ancient man, and indeed some modern humans, could have ever believed that the Earth, Sun and Moon were flat.
To those Head Teachers, in the UK, who prevented their pupils from observing the eclipse, either directly through specially approved glasses or indirectly via a pin hole projection onto a white card, I say shame on you.
From where I was it was perfectly safe to look at the Sun with the naked eye but assisted by quite thick clouds. Had my young son or daughter been with me then I would gladly have allowed them to see this wonderful sight in this way too.
It is far better to educate our children how to observe the Sun safely rather than deny them the opportunity because of misguided and silly views on safety. An ill educated child could quite easily and mistakenly look at the Sun through binoculars because they are not aware dangers through the actions of over protective teachers and parents.
At one point 80% of the Sun was covered by the Moon. I could swear that I perceived the Moon as a sphere rather than a flat object. The Sun appeared three dimensional too; a little bit like an ice cream scoop. I cannot for the life of me understand why ancient man, and indeed some modern humans, could have ever believed that the Earth, Sun and Moon were flat.
To those Head Teachers, in the UK, who prevented their pupils from observing the eclipse, either directly through specially approved glasses or indirectly via a pin hole projection onto a white card, I say shame on you.
From where I was it was perfectly safe to look at the Sun with the naked eye but assisted by quite thick clouds. Had my young son or daughter been with me then I would gladly have allowed them to see this wonderful sight in this way too.
It is far better to educate our children how to observe the Sun safely rather than deny them the opportunity because of misguided and silly views on safety. An ill educated child could quite easily and mistakenly look at the Sun through binoculars because they are not aware dangers through the actions of over protective teachers and parents.
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