Dec 06

Britain boasts it is the fastest growing economy in the developed world. Put aside sneering at what GDP is and means and ask why? It is because we are running massive fiscal deficits? Austerity has been for the poor and even that has proved self defeating as the housing bubble takes more benefit and the NHS has to cope with the increasingly poverty and population. A growing population that is causing a low wage explosion in low wage job numbers – even that is questionable as of course manipulation of Govt numbers is the new little Black dress covering just enough.

People say wages are not rising but the reason is not just lack of bargaining power. It is that wage comparisons do not compare oranges with oranges. Jobs also change. Wages are not rising because of underemployment. There are thousands more people working for the same per capita GDP as 6 years ago. Higher wage jobs have disappeared and been replaced by lower wage jobs. Vast numbers of self employed who knows what they earn or cost the state.

However all this floats: on a massive fiscal stimulous the biggest in the Western World: A massive Balance of Payments deficit: Large and rising public debt with static private debt: ZIRP: and a £375 Bn tranche of unwound QE. The economy is less balanced than ever. Quite how the UK goes forward when the financial capital collapses again, as it inevitably will, is interesting to consider. Can we afford to bail out the banks? If we let them bust what does that mean a quick contraction? Sadly my worry the time is passed for a controlled contraction of the financial parasite. In a country which even state media cares what UKIP’s leader thinks of ostentatious breastfeeding the comedown could be frightening.

The UK will hardly be getting much sympathy with its vile tabloids, warmongering, torture, rendition, arm sales, prodigious whining, polluting and hypercritical sanctimony if the shit hits the fan.

written by reaction \\ tags: , , , , , ,

Apr 12

The chart below shows per head UK GDP is static and below 2008. Add in that income is more unequally divided and asset prices artificially boosted and the economy running with Zero interest rates [ZIRP] it’s a grim picture.

GDP

The recovery is non existent and worse after 5 years many signs of a future recession. Some people may feel good. House prices and stocks may be on the rise but so is the debt to support that and yet the economy per person is static.

If you still want to vote Tory on the back of economic competence you’re an idiot. Why Labour continue to piss around with the Squeezed Middle and Cost of Living Crisis instead of you’re poorer and worse the money is being handed over hand over fist to the rich shows who they really represent, the same people as the Tories.

Time to get real.

written by reaction \\ tags: , , , ,

Mar 23

Workers declining share of wealth and productivity gains has been hidden by rubbish inflation numbers and massive expansion of credit and housing bubbles for over 30 years. This has combined with greater financialisation and the voracious appetite of those who take no risks – known as bankers mostly but large corporates too. 2008 has actually accelerated the trends without altering one thing indeed greater and greater percentages of wealth are controlled by a small elite who make risk free gambles and get to load the debt on the populace through their politicians. Continue reading »

written by reaction \\ tags: , , , , , , , ,

Nov 19

It’s struck me for a while people could afford more taxes because all they did with their existing incomes was bid up house prices. It’s horribly damaging now 2 parents work their arses off and have to bring up children. Anyone who is renting is made poorer and those with mortgages almost sucked into a Ponzi scheme and demanding its continuance. Continue reading »

written by reaction \\ tags: , ,

Aug 10

Edited 11/8

I owe some enlightenment on the issue of interest rates to Economist Frances Coppola. I  accept that savers getting -ve real interest rates are getting the right risk and reward. Although of course they are not in this bubblicious economy where a downside deflation could well happen bringing down some of the banks and leading to haircuts. Your savings are to a degree shares in the bank.

Many who argue against the rentier income world are kinda arguing for savers to be given it on savings! The argument is that without ZIRP (Zero Interest Rate Policies) or near ZIRP banks would go broke and where would savers be? With QE bloated balances hard to argue a market interest rate would be any higher. Raising rates might see some banks collapse and whilst some, and I have, will argue that may have been necessary or helpful 6 years on it would just be more pain. Continue reading »

written by reaction \\ tags: , ,