I wrote an article on U.K. – the calm before the storm – yes this time it is different – highlighted the U.K. debt situation and taxation policies destined to cripple the recovery.
That is to say that the powers that be – know very little about history (or economics) and I was surprised that rating agencies permitted the U.K. to run such an alarmingly high run of deficits (yes suggested it was political).
Then there were figures released showing consumer spending has come in at 0.2 percent increase whereas expectations were set at 0.3 percent.
Against this backdrop (no pun intended) an increase in mortgage loan interest rates – as the Banks ‘expect’ the Government will increase their rates.
Like bullshit – just an excuse to get in early.
This therefore means – in real terms that spending by consumers is going to continue to decrease – a reduction in consumer spending and it will accelerate for the next 2 quarters.
It will affect the GDP of the U.K. and eventually the ratings agencies will have to downgrade the U.K. – yes these imbeciles that run these rating agencies then will have to take action – me feels too little action – far too late to have any benefit to investors.
It will be acrimonious parting of the friendship between the UK exchequer and the rating agencies – as the illustrious Osborne will be bruised – his ego will start to get a battering and he will retaliate . . . me – well – I can’t wait just to see the arrogant smirk wiped from his face.
Just remember please that the government in their wisdom – has proposed a ten percent increase in salaries to parliamentarians and to the public service – one percent per annum over four years.
I read this and realized we have elite self serving wankers supporting themselves – plus avoiding the difficult decision of cutting the bureaucracy – reducing government spending.
Instead ‘they’ presume tax receipts will rise.
Presumptuous wankers who have learned nothing from recent history – let alone our past history.
If you doubt anything of what I have been saying throughout all of these articles (since I started this blog) then please refer to the attached comments from Nouriel Roubini in 2010 – article from Forbes with insight for the future.
Why Roubini, well a top American economist who accurately predicted the financial crisis of 2008.
In this article he states that, “unless advanced economies begin to put their fiscal houses in order, investors and rating agencies will likely turn from friends to foes.”
Due to the financial crisis, the stimulus spending, and the massive bailouts to the financial sector, major economies had taken on massive debt burdens, and, warned Roubini, faced a major sovereign debt crisis, not relegated to the euro-zone periphery of Greece, Portugal, Spain, and Ireland, but even the core countries of France and Germany, and all the way to Japan and the United States, and that the “U.S. and Japan might be among the last to face investor aversion.”
Thus, concluded Roubini, developed nations “will therefore need to begin fiscal consolidation as soon as 2011-12 by generating primary surpluses, which can be accomplished through a combination of gradual tax hikes and spending cuts.”
Nouriel Roubini and Arpitha Bykere, The Coming Sovereign Debt Crisis, Forbes, 14 January 2010: