Dunderheads

DUNDERHEADS

Bercow, Speaker, dunderhead
Dunderhead, 1st class

John Bercow MP and Speaker in the House of Commons, raised himself to the dizzying heights of dunderhead, plus half wit hypocrite, by unilaterally declaring President Trump Persona non grata, in the Palace of Westminster. Thus raising interest on social media, especially Twitter. The block on Trump came as a surprise to Lord Norman Fowler, speaker of the House of Lords, as he had not been consulted on the subject, which is the normal constitutional procedure on these occasions?

much like a performing dog on two legs

Indeed Bercow has made himself look foolish in the extreme. The first point is, the Speaker is supposedly apolitical, and traditionally remains neutral, so as to be above the politicking of the Commons. Another main point is that any comments about Foreign dignitaries visiting Westminster, especially with a view to speaking in Westminster Hall, is done after consulting with the Speaker of the House of Lords, in this instance, the former Conservative Cabinet Minister, Norman Fowler. Bercow got on his hind legs and spouted his gob off, much like a performing dog on two legs, in this case also doing the neat trick, of making himself look like a clown, from a down market Circus.

In the process the clown Bercow, has made Westminster, sound like a Circus.

Radio sounded better when it was the Wireless

The first Speaker of the House of Commons I knew about, was George Thomas, later ennobled to Lord Tonypandy. This was in the days when Parliament was only Broadcast on the Wireless, not Television. I found the Radio sounded better when it was the Wireless, I often caught Prime Minister’s Questions, while I was driving, certainly when Speaker Thomas called ‘Order, order’ one sat to attention, his voice had ‘Authority’.

House of Commons
UK Parliament, the House of Commons

From the beginning, dunderhead Bercow has had difficulties keeping the House in order, George Thomas had no such problems, he cut any disorder with a handful of well aimed words. The point being, one knew he could be deadly and he was not a person to be trifled. This made Speaker Thomas popular, he could easily have been unpopular, but George Thomas was consistent, so MPs knew their position, stay orderly and they would be fine. Step out of order and they would face the Speaker’s wrath, and he could devastate, indeed all Speakers can, they hold the keys to MPs being able to speak in the House, upset the Speaker and an MP has no voice in the House.

It is clear that dunderhead Bercow has never been able to convey that same authority. He has improved his performance in recent years, but even at his best Speaker Bercow, is a poor imitation of what a ‘good’ Speaker should be.

put himself in the dunderhead class

John Bercow has just put himself in the elite dunderhead class, and nailed some partisan political colours to the mast, he is the one out of order. Should he go, that is not a consideration of one miscalculation on his part, but it does cast a shadow on his ability to command enough respect, to stay longer than the nine years he has flagged, he would like to reside in the position of Speaker?

Bank of England Interest Rate

Bank of England
The Bank of England, Threadneedle Street, London
Pic courtesy of Bank of England

On the subject of dunderheads, Mark Carney at the Bank of England has, is placing himself in the running, as predicted, the BoE via the Monetary Policy Committee (MPC) kept interest rates at 0.25%, utter madness. There is every opportunity by the Government to change savings and investment culture in UK, Bank deposits are too low.

Currently Sterling is languishing, a splendid situation for H.M. Treasury to signal to BoE that it is a good time to raise interest rates, as part of a wider strategy to increase savings in UK. This would have the effect of raising business investment, after all if people are saving, they want to see their hard earned do$h sweating hard, and where better, than being invested in hard working trade and commerce. Actually this is precisely what Macro Economic theory makes happen, hence why Japan after over 20 years of being in the doldrums of economic stagnation, still has high industrial output, high industrial investment, high employment and a trade surplus, supplying the Japanese Government with tax income to service the domestic budget deficit.

Lexus Honda cars
Japanese Luxury cars, many still made in Japan and exported.

the Japanese were obsessed with savings

Japan has slow growth, but Japan still has a vibrant economy, purely because from the 1950s right through to the 1990s, the Japanese were obsessed with savings, as a consequence, industry has the borrowing capacity, because the Banks have the liquid assets to lend to new and old Industries. The Japanese people themselves have high liquid assets, unlike UK they do not have a high percentage of their wealth tied up in housing.

All UK Governments since 1945 have been on a spending spree, but worse, have encouraged the British people to do a Viv Nicholson and ‘Spend, Spend, Spend’.

The point of this succession of Government policies, has been to prop up high street spending, with a view to stopping the next recession, it clearly fails. Recessions still happen, but worse, it has meant the Balance of Trade has run a continual deficit since the 1980s, hence all the British companies flogged off cheap to Foreign concerns.

The BoE follows Government Policy, but it is disconcerting that the most Political Governor of my recollection, has no concerns over British Industry, and UK future investment. The Monetary Policy Committee has given no signs it would like to see higher savings by the UK populace, it should, if only to make H.M.Treasury consider the better alternative. On that moot point I suspect Mark Carney and the majority of the MPC, will disagree, that is their prerogative, but they will be wrong.

HSBC Park Row Leeds
HSBC 1 of many high street banks who would lend more if people saved more

And as if to prove it, 8th February 2017, Sir Jon Cunliffe, Deputy Governor Financial Stability, Member of the MPC, gave a speech in Birmingham on the subject of Business investment. The speech is available online here. Sir John Cunliffe speech But makes sad reading, because it is full of what amounts to platitudes and doesn’t address the core problem, savings with which to lend to Business.

UK doesn’t need platitudes, it needs higher commercial investment, to reduce imports, increase business efficiency, raise productivity, and so increase the number of jobs. Sod the so called next recession, it will happen soon enough, what is more important is, that British Industry is in a position to fight it with better tools, namely Efficiency and Productivity. That ensures a shorter recession, and higher job numbers when we come out of it.

nor alas in his remit

For this it needs higher savings and less consumer spending, H.M Treasury are the people to make this happen, but putting up interest rates so that people can get a return on their savings would be a start, will this happen? Not any time soon, and the Bank of England under Mark Carney won’t make it happen, it’s not in his Politics, nor in the mindset of the MPC, nor alas in Governor Carney’s remit, which is the most important point.

line of trucks
How long do I need to bang on this theme, Efficiency is what pays our wages.

H.M Treasury is focused on #Brexit, and will not change savings policy, which is odd, considering, it is future investment, requiring a higher savings culture, that is part of what will make or break the outcomes of any #Brexit deal.

Wealth Creation Pt2

WEALTH CREATION PT2

How wealth creation came into being.

In part 2 I am developing the ideas from part 1.

11th Century English Agriculture
Agriculture in the 11th Century

A point to keep in mind is that those very first farmers, had no idea they had money. To them it would have been just a surplus product, there is no evidence they would have had any concept of money as we perceive it, merely they would have extra food with which to exchange goods or services.

With no real concept of money, there would be no word for it, nor to start with any ideas of worth.
In historical terms, farming is what predominantly marks out the Neolithic period, yes there are also improved designs to stone tools, but these also occur in the Mesolithic period, and are not in economic terms revolutionary, farming most definitely is.

You only have to look at Australia

Until this first farmer, any drought, or increase in population above what the land could support, led immediately to starvation. You only have to look at Australia, it was occupied for 30,000 years when the British first set up their colony at Botany Bay. Britain had been occupied continuously only since the last Ice age had ended, about 8,000 BC. The Australian Aborigine population was between 250,000 and 400,000, it was Palaeolithic or old stone age, and strictly hunter gatherer. The population in Britain was 14.1 million, and had already past the Agricultural stage and was into the Industrial era.

This highlights the difference, pre farming people starved when the food ran out, whether through a rise in population, or a shortage of food through a natural downturn ii the weather or perhaps even a disease in the staple food of the area in which a community lived.

Stonehenge
Stonehenge

Palaeolithic peoples didn’t even have domesticated animals, like cows, goats, sheep or the like, by the time of the Mesolithic period domestication had started, however, the animals were still dependent, like their human companions, on what the land could provide.

this leads to ownership

Farming changed everything. That it came into being is no real surprise, people lived so close to the land, it is easy for some bright spark to see that there were some areas that had better food supplies than others, the leap of imagination was realising that if one planted the grain, it grew.
The first farmer has found some suitable area of land, cleared the existing plants, and sowed his seed. He has tended his crops, and this leads to ownership, it also leads to wealth creation. After all, he is the one who has done the work. So along comes Ug who asks if he can help, and reap some of the rewards.

This immediately leads to challenging questions, is Ug given a share of the food, does Ug have his own piece of land, if not what is his relationship to the first farmer, is he a worker and paid or a slave and becomes part of the famer’s tools. Remember there is no word for money, no concept of money, and the idea of ownership may well have come into being, before these other concepts have words.

Indeed, it is money in the form of tokens, that dislocates commodity money from fiat currency. Once the idea of abstract value becomes grasped, then there is value of things. Until this point, people, products, services have no value, not because they are valueless, but because there is nothing that acts as an independent token with which to measure the value.

It is the independent token (=Money) being dislocated from actual services or goods, that makes money such a vital measure, so no money, means or equates to, no value.

he can give value to items or services

It is advancing technology that has given items and services value. Once the farmer has surplus product, he can give value to items or services he wishes to acquire.

Whilst the axe head maker was making ‘things’ of value. Those axe heads had no value, until there was the money there, with which to exchange a good or service.

This idea also has great consequences for modern Economies. During the ninth and tenth centuries in England, there was particularly in the reign of Eathelraed the Unready, a draining of fiat currency from England abroad, in the form of what was called the Danegeld. These were extortion payments made to the raiding ‘Vikings’ or ‘Danes’ in an attempt to keep the peace.

But here is a conundrum, while the last payment was so huge it took two years taxes to raise, this left the Vikings super rich. But had it made the people of England have any less value, no. OK they had less money and less disposable wealth, but all the knowledge and ability to create wealth through technology was still in place, so they were only poorer in what they could purchase with cash. If there was no famine, they were still as rich as the years before.

Note to confuse the issue there were a couple of famines, but this only meant the Danes or Vikings choose your own name, stayed away from the coast of England, until they had the spare food, so as to travel, and to raid the English again?

a modest three or four fold increase would bring astounding benefits

In the mean-time let us return to the idea of the first farmer. The result of just clearing an area of land, probably just unwooded land, and digging with perhaps an antler horn, or a sharpened length of wood, to plough a rough furrow, plant and weed the area would increase the crop yield anything between five and ten fold. Even a modest three or four fold increase would bring astounding benefits, however such a low figure is unlikely. Once you have proved that the idea works, the first thing would be to ensure you had enough for the next year plus some, and a natural eye to security would mean, that the maximum amount of land was cultivated, the amount of grain needed to grow from it would be kept.

In other words, the farmer’s own self-interest and that of his family or community would ensure there was excess food to that which was essential.

All the evidence of Mesolithic people in what is now eastern Europe, down turkey Iraq and out towards India, shows that the movement of tribes of hunter gatherers was not extensive, they tended to build a shelter and use it as a base for the surrounding area, only once the resources were used up di the tribe relocate, they would then return or do a circular tour, but all the time having a dwelling place to work from.

This is vital to understanding what happens next. Initially the extra food would be probably saved, a society that is forever on the brink of starvation could be expected to be cautious over how it used a resource.

Now comes the next step, at some point goods were exchanged, for what reason can only be guessed at, and the actual need is not important, it is the transaction that is. Perhaps the farmer needs an axe head, or some useful animal skin or extra spearheads.

thus increasing the amount of land he can farm

Wealth creation stems from both efficiency, the farmer realising, he can get cattle to pull the plough, thus increasing the amount of land he can farm, or technological advance, adding a wheel to the plough or indeed having two wheels on a cart and moving more goods, which is both a technological advance and efficiency gains.

Once you have a farmer, they are going to stop anyone from stealing their goods, this is a concept that is alien to hunter gatherers. Here language intervenes, and the concept of ownership, and with it land ownership, and with that comes the Laws relating to ownership.

With Laws come Lawyers, or at least people who understand the Law, or ensure the Law is enforced, this usually is some kind of rulers, whether head of the family, King, elected representative, or other person in charge. This has just increased the number of jobs.

But just stop a moment, let’s go over to the Economic correspondent of the ‘Neolithic Times’ and ask his opinion of the effect of farming.

Empty shop Closing down
Things are always changing, as jobs are lost more jobs are created.

Neolithic expert on Economics, “well in the future, now farming has arrived you will see hunters going out of business, as their jobs will no longer be needed, that will put the axe head makers and spear makers, out of work. In the future I see a lot of people with no work, and mass redundancies”
And if you think that sounds familiar, next time you see some person banging on about Robots taking our jobs, and making mass unemployment, ask who is paying this idiot. The Luddites, could not foresee you getting a flat tyre and calling out a breakdown company.

The future is bright the future is technologically driven, and wealth creation through efficiency will only increase.

Wealth creation

WEALTH CREATION

Wealth creation, a beginner’s guide.

This article is partly prompted by a, line in a ‘Twitter’ post, ~NHS, put people before profit~. So in other words forget Wealth creation, run the NHS as inefficiently as possible, and spend more money than the entire economy has.
That is basically what the person who thought up the line said.
The person didn’t mean that of course, but then, in UK the majority of people have no idea where profit stems from, or indeed many don’t know what the word means, and that wealth creation and profit are intertwined.

Mesolithic tools
Illustration from 1 of my favourite books, ‘Hunters, Fishers and Farmers of Eastern Europe 6000 – 3000 B.C. If you think I’m joking it rates alongside, J R Green’s Short History of English People, Principles of Log measurement, by C.F. Laver & 500 years of Printing by S.H. Steinberg ??

Let’s start at the beginning, Palaeolithic Man, these were hunter gatherers, which means, that when the locally available food was exhausted, as the population rose, they died through starvation. They had discovered fire, which meant they could cook food, which releases more nutrition, which in turn helped to raise the population above that possible before fire. This, along with some minor food processing, such as grinding cereal, led to a higher calorific value available but was limited by what nature provided.

In the film Avatar, they live in a world without money, they are hunter gatherers, however what they don’t show in that film, is what happens when the population reaches saturation point, people die, infants are still born and more mothers die in childbirth.

Period, end of.

Bloated stomachs excruciating slow death

Bloated stomachs excruciating slow death, it is why the population of Australia was so low, around 250,000 when Europeans arrived, (The UK in 1841 was 17 millions) and the larger Australian mammals like the giant Kangaroo had been wiped out for food.

Neolithic Storage Pit Yugoslavia
Pic showing a storage pit, in what was N.E. Yugoslavia, once people had grasped the need for planning, storage was essential.

After Palaeolithic times was a fascinating era, called the Mesolithic period, between 12,000 and 8,000 years ago, or 9,600 BC and nearer, depending whereabouts in the world you are looking, 1800 AD in some parts of Africa? This was a transitional time before Neolithic man. The Mesolithic period saw the introduction of semi domesticated animals, as these lived on food sources humans didn’t, they could extend the calorie intake of a group, when drought or other changes in weather occurred.

However the big change came with the Neolithic period, and it introduced ‘profit’ otherwise known as ‘wealth creation’ and ‘value’ these all result from ‘efficiency’, this was due to the biggest revolution to date, namely ‘Farming’.

FIRST FARMERS

The example I like to give is these first farmers, realised the hunter gatherer way of life isn’t efficient, so they stop and live in one place and mark out their fields, sow their seed and gather their grain and voila, find they have more food than their immediate needs for the year, the following year as there may well be a drought, so they save what they can for the next year. But as it turns out, no drought occurs, so the next year one of them decides he wants a new axe head, but not any old axe head, he wants the best to flaunt in front of his pals.

So he goes off to the top axe head maker and says, I want a super deluxe axe head, can you make one and I’ll give you 3 months grain for your whole family in exchange for it. At this point I will note, the very first recorded money, was the Shekel a measure of grain, it was in the Fertile Crescent of Mesopotamia, and is long after this story happened. The axe head maker agrees, thinking to himself I’ve got a good deal here and it will only take me a week to fashion the axe head.

Marx and the Socialists cannot accept this reality

Now there are some points worth noting, no one is poorer, in fact because one person found a more efficient way to work, more people are richer, Marx and the Socialists cannot accept this reality, but then Marx like most Socialists was a parasite who after less than a year’s work, around the age of 25 never did another day’s paid work in his life.

Once you had farmers with a fairly regular surplus of food, they could support Cities. Today we would probably label them Towns, they supported at most a few thousand people, some only hundreds. The Sumerian City of Ur in Mesopotamia is one of the most famous. However with Cities you had a class of people able to employ others due to wealth creation and to do menial tasks, this led to leisure time.

Part of this is due to more efficiencies, that come with Cities, people in close linked contact, able to exchange views and also efficiently exchange goods and services, this all adds to wealth creation.
Profits result from efficiency, so saying “people above profits” is just a silly uneducated statement.

Sumer Boats
River Transport in Mesopotamia

Also because of the geography of Mesopotamia, there were the two rivers the Tigris and Euphrates, traders could make money within a few days travel from one to the other, plus water can carry huge amounts of goods compared to land travel, which leads to more efficiency and wealth creation, hence increased profits. Trade also led to Writing and Arithmetic.
The Sumerians or Mesopotamians (it depends on which era you look at), arose because of a number of factors that were right. But the geography led to good infrastructure, namely rivers to transport goods, and decent road connections due again to geography, between Cities. These all help efficiency, which results in increased profits.

Sumerian numbers
Sumerians or Babylonians to you, used base 60 for their counting, we use base 10 denary or base 2, binary and base 8 octal for computing.

With farming came money, as pointed out the first recorded money was the Shekel a measure of grain, this was in Mesopotamia. However prior to this, money would exist, without there being either a concept of money, nor a word for it.

In fact farming was definitely revolutionary in the economic sense, because it increased productivity multiple times, in one leap. Even the simple act of ensuring there is seed planted, weeds removed, and making sure the area is adequately watered, will have boosted productivity by five to ten fold, don’t believe me, go out and do a little gardening one day?

Such a jump in the amount of food production, would ensure that the current family were well fed, and that in itself would increase the likelihood of any children surviving, thus boosting the population but also leading to more leisure time, and thus more time to think and contemplate.

I realised this was not covered in any Economics books I’ve come across, and indeed the introduction and why money exists is not adequately covered?

Going back to the very first farmers, they merely produced more food than they could use, due to technological advances, some of this would just be wasted, but why waste something so precious, as food, one would save as much as possible to try and prevent a shortage in future years. But in the mean time one has a surplus of a resource, you might as well use it.

fairly miffed, if some lazy hunter gatherer came along

Also worth considering is the idea of ownership would come into existence, a farmer who had worked his/her knuckles to the bone, ensuring their crops were well tended and ready to produce a good harvest, I’m sure would be fairly miffed, if some lazy hunter gatherer came along, and started taking their hard worked grain, and using it for themselves.

But also remember no idea of the concept of money has emerged, so any surplus would be exchanged, and bargained over without there being a regular exchange agreed, or even any word for money.
This idea seems to emerge with the Cities, where you get a number of people, comparing trades. And hence measurement comes into being, in other words more technological improvements, and once you have a measurement of corn, you have an exchange of that measurement with other items.

Actually the Sumerians left lots of info because they wrote on clay tablets, another technological advance, so we have all sorts of Historic artefacts, that lead to how ideas progressed, not least Arithmetic, and even the first recorded joke?

One Sumerian to another.
1st Sumerian, “I say, I say, I say, what’s guaranteed, when a beautiful woman sits on your lap?”
2nd Sumerian, “I don’t know, what is guaranteed when a beautiful woman sits on your lap?”
1st Sumerian, “She farts!”
I thank you, lol. PS if anyone says about another joke “It’s the oldest joke in the book”, you can now be a pub bore, and tell them what is the oldest joke in the book? Babylon Circa 1900 BC.

Back to the plot, efficiency and technological advance is of course what Adam Smith noted was happening, when he related the story of the pin makers and division of labour. But by his time we had various ways of measuring, efficiency, and multiple ways of relating one item in ‘value’ to another. Value of course is not always related to cost, so two items can be the same price, but have different values, and the similar items can have different prices but the same value. These can of course differ from person to person.

Colgate
Colgate brand items, courtesy Colgate Palmolive.

A tube of toothpaste purchased for £1 in a Pound shop, can have multiple values to multiple people buying it. To the poorest it might be bought at that shop because it gives the best value, to another it may be ease of location of the shop, and the actual value of no consequence.

consider the science and technology

But pause and consider the science and technology that is required to make that toothpaste, most of these advances were nothing to do with making a product to clean your teeth. Many efficiencies were the by product of other manufactures, but they all lead to an increase in dental hygiene?

These concepts are way outside any Socialist dogma, because Socialism deals in fantasy worlds, where there are only two types, the rich and the poor, balderdash of course, but it persists.

Efficiency creates wealth, and wealth results from profits, I note that President elect Trump, is going to emphasize infrastructure improvements by increasing the road building and other communications services. This in itself will result in increased employment, nad wealth creation, but done correctly will increase the USA’s GDP per head. Merely by increasing efficiency, he will increase profits and so boost wealth creation.

Technological and scientific advances lead to wealth creation, along with lowly ideas on how to increase an individuals output. I was on a production line, and noted instantly, that the most efficient people, with the largest output, did the least movement, and appeared to be the ones doing the least work?

That was people with mundane jobs, no degrees, but making improvements in their own working environment, just like those first farmers, they applied the technology they had to hand, in the most efficient way possible.

As a result they will still be in employment next year, even if the price of imported pistachio nuts has risen, the price in Tesco will probably be unchanged, wealth creation at work.

Prospect 2017

So what are the prospects for 2017, nothing as exciting as 2016, I’ll be bound, although the real work that #Brexit and the Trump result have caused are yet to be set in motion.

Brexit jubilation
The Democratic Revolution is here. Socialists were given a metaphorical kick in the teeth, when Britain voted #Brexit

In the UK the change in trading due to the lower pound is largely still to show up in the figures. Really this will happen in the Spring 2017, by then any new business, gained by a lower pound will start to show through, although we may start to get indications with the December 2016 figures.

I’ve been reading through the Office for National Statistics (ONS) Trade figures for the last few months, (Yes, OK someone has to be that sad, lol) and it was clear, EU was exporting more and more to UK, confirming the suspicion, they need us more than we need them.

Euro is undervalued for Germany

There are many passionate #Remain supporters, who genuinely believe that it will be catastrophic for UK to leave the European Union. This belief is based on the point of free trade within the EU. They are correct, but only up to a point, and many do not understand that the Euro currently is over valued for the PIIGS countries, who as a consequence have high unemployment. The Euro is undervalued for Germany, that exports and booms as a consequence of the fact its own goods are relatively cheap. This was especially so before #Brexit as they could sell into UK at big profits to German companies, and a continuing trade deficit to UK.

The UK balance of trade deficit is the reason foreign firms are able to buy so many UK companies. Flip the deficit into surplus and UK will start taking over foreign concerns.

a return to the Democratic process

But the main benefit of UK leaving the EU, will be a return to domestic control of our own destiny, or put another way, a return to the Democratic process, all that has to happen then, is abolish the House of Lords and replace it with an elected House. That however is not in prospect for 2017.

Some currencies shown here no longer exist?
Some currencies shown here no longer exist?

The pound will hopefully remain weak, unfortunately Mark Carney will try and ensure this happens for different reasons than the ones it should be. Mark Carnage is hell bent on getting the inflation figures into the 2% range, no bad thing from a savers point of view, but the emphasis from HM Treasury, will be on spending not on saving. This is because all Governments since 1945 have been obsessed with the notion the Country is about to go into recession, unless the Government keeps consumer spending going, not unrealistic, but over egged most of the time, plus with welfare as it is, now totally unnecessary, however this spending culture will be maintained to the detriment of the UK economy.

There will be no real change in savings policy, so there will be no real jump in efficiency of the UK economy. The second effect of the lower pound will be to allow existing companies to keep exporting, which they will do, but with less and less to the sclerotic, indeed nearly stagnant EU economic sphere, and more and more to the dynamic and growing economies of the rest of the world.

fun if the Right wing take the Presidency

Meanwhile coming over the political horizon, are the French presidential elections, expect sparks, followed by the French parliamentary elections, which will be lots of fun if the Right wing take the Presidency? The German Federal Elections, which are not fixed to a specific date, but can be no later than 22nd October, will be good fun? Also the Netherlands have Parliamentary elections in March, so expect them to be the usual Dutch independently minded fun and games. New Zealand, will be worth noting, but also, Iran has Presidential Elections.

Oil prices may go up or down?
Oil prices may go up or down?

I have only just seen this, and it occurs in May, the thing to watch here is if the current President Rouhani, can gain a second Presidency, Ahmadinejad, the previous incumbent, left a poisoned chalice in the form of house ownership, which Rouhani had no chance of following or fulfilling. This has left a sour taste in the mouths of many Iranians, and Rouhani also has a knife edge relationship with the Ayatollahs. I suspect the people of Iran will either re-elect Rouhani, or go for a more radical Presidency, which will set the people on a collision course with the Ayatollahs, interesting times we live in.

Triggering Article 50

M’LUDS PLUS M’LADY

Judge Lady Hale
Lady Hale, I’m pleased to note she was born in Yorkshire, so gets my vote straight away lol

M’Luds plus M’Lady are now deliberating on whether before triggering Article 50, MPs need to vote, or whether it can be triggered by Government prerogative. The UK Government was given a mandate by the people, it is the people who rule the Country, currently the elected Politicians are not reflecting the will of the people, so asking whether they should make the decision makes it the wrong question. The people want Article 50 triggered, whether the Politicians like it or not, that was the point about having a referendum.

Brexit jubilation
The Democratic Revolution is here. Socialists were given a metaphorical kick in the teeth, when Britain voted #Brexit

In other words, the M’Luds and M’Lady may think they look fine wearing a silly 18th Century fashion statement, but their deliberations need to take account of the fact neither the House of Commons and certainly not the Lords, reflect the will of the people in 21st Century Britain.

If the #Remoaners want to see real anger, let them try stopping the break from European Union happening, by trying to stop Article 50 being triggered.

There are more people now want the break, due to the lies that #Remain peddled, than voted for #Brexit, on June 23rd.

there will be some inflation

There has been no collapse in trade, there has been no emergency Budget, UK trade is flourishing, due to the fall in the value of Sterling. Yes there will be some inflation due to price rises, currently 1.2% and may well hit 3%, which will be no bad thing, short term.

Oil Rig
Oil Rig

Yes commerce will have a hard time at some indefinite point in the future, but it would not have been plain sailing eve had we voted to #Remain in European Union, EU is dying on its feet, this became clear with the #Brexit vote, when suddenly, the fractures all over European Union were shown in sharp contrast. Also the arrogance of EU officials was shown, plus many people living in Britain had highlighted the lack of Democratic process within European Union. While the referendum is being fought in the British courts, on the European mainland there was nothing but vague threats of diktat.

The EU is a sclerotic mess, the Euro is seeing to that. Yes Germany has boomed for the past fifteen or more years, but that was due to the fact the Euro was low valued for Germany, it shipped its unemployment onto Portugal, Italy, Greece, Spain the so called PIGS Countries. That should read PIGIES because Ireland also suffered.

The large majority of people do not see any Laws being broken in triggering Article 50, purely because it is the will of the people. The previous three Law Lords had quoted Sir Edward Coke, back in the 17th Century, he had said about Parliamentary prerogative that the MPs voice was to be heard. There is a serious problem with Sir Edward Coke’s pronouncement, he meant the MPs as representing the will of the people, which in 1630s they did.

This man crossed Sir Edward Coke in 17th Cent and lost.
This man crossed Sir Edward Coke in 17th Cent and lost.

MPs were not elected to decide whether we should stay in Europe, the people have spoken.

out of touch #Remoaners

The fact is, Article 50 could have been triggered, immediately, however the Cabinet, decided that it would be best to be a little more prepared for the exit, Mary Creagh MP and her fellow out of touch #Remoaners, are trying to manipulate the will of the people. Socialist equals stupid, I will let the reader decide on whether Mary Creagh is Socialist or not?

House of Commons reply letter
Letter from Mary Creagh MP
2nd Page of MPs letter
2nd Page of MPs letter

As it turns out I believe the vote in the House of Commons last week, (Mary Creagh MP, abstained) has really outwitted the #Remain camp and will make the decision of the Law Lords and Lady, largely redundant.

If the #Remain group within the Commons seriously try blocking Article 50, the Country will raise such a stink, the #Remoaners won’t know what hit them. However, giving #Remain a flavour of the way the Government will handle #Brexit, along with continued pressure by the many over the few, will I think be enough to avoid any serious upsets.

Budget-Deficit

Budget Deficit

miserable Chancelleor Hammond with no Red box
Wot no picture of you with ‘The’red box Chancellor Hammond. This is edited from his Twitter account. But it is poor public relations, and doesn’t earn him any favours with me?

Phillip Hammond has announced the budget deficit will remain past 2020. The Chancellor of the Exchequer delivered his first and last autumn statement.

It makes more sense, changing the Autumn Statement into a full blown Budget, and just having the review in April. I did notice that what would have been the next Budget, will be just a statement, thus not having to make vague outlines at the start of the #Brexit negotiations.

The Budget Deficit should be lower

The budget deficit should already be lower, but the way ‘all’ UK Governments have run the economy since 1945, has been to concentrate on consumer spending, not on saving and investment. This is part of the problem, there are too many retailers, not enough savers and hence too little saved capital, to increase investment in Capital goods to make UK Plc more efficient and hence more competitive in the world market. This would of course increase tax revenues, and we would be in less of a mess than we are.

Let’s start at the beginning, the budget deficit, is the shortfall in tax revenues against what the Government spends. To offset this, Her Majesty’s Government sells the debt in the form of Bonds and Gilt edged securities, Gilt edged merely means the Government will guarantee to pay you back the principle amount, no matter what. The Debt management office While you hold these bonds, usually referred to as coupons, each six months or year, they pay you interest. They are usually issued for a set period of time, say a year, ten years etcetera. Some of the original consolidated debts (Consols) are open ended and still outstanding from the Napoleonic wars?

A selection of UK money 2016
A selection of UK money 2016

Remember the Government does not have any money, nil, zero, all the money the Chancellor of the Exchequer spends is from the tax payer. Or alternatively is borrowed, and has to be paid back, through extra taxes.

Socialists brain washed to think Governments can create money

The number of Socialists brain washed to think Governments can create money is embarrassing, at least one turd in the form of Fidel Castro is no longer around keep trying to peddle their fantasy economics.

This borrowing is the National debt, and is mostly owed to UK citizens, the US has a similar model. By and large the National debt is bought by insurance and pension funds, it is generally not owed to foreign countries.

The current levels of National debt, are not really something to worry about, it would need to be over double the current amount, before it would start to be a real burden. Not that we want it to go higher, the lower it is, the less tax we pay to keep it running, and the upshot of less tax is UK becomes more competitive in the world’s markets.

Bank of England
The Bank of England, Threadneedle Street, London
Pic courtesy of Bank of England

The National debt first really came into being during the Restoration or 1660s onwards, before that it was the problem for the Monarch. In 1694 with the formation of the Bank of England, meant there was a steady flow of money, and something neat was found to happen. When the Bank of England was formed it leant all its initial offering of £1,200,000 to the Government. Those who had invested, had basically deposited their money in the Bank, the Bank then loaned the money to the Government at 8.333% interest (most books, t’interweb etc say 8% but the figure was £100,000 on the £1.2 million). In the meantime the depositors could of course have access to their deposits, £1,200,000 had been created to spend out of thin air, and with hardly any inflation, or plus 8.333% if one saved ones do$h invested for the whole year. The term win win situation springs to mind.

Needless to say the Government soon spent the do$h on building up the Royal Navy, and a war with the Dutch soon had His Majesty’s Government back for more, so the Bank had a second offering, which of course sold out. By the time of Queen Anne, the National debt was around £36,000,000, an astonishing amount at the time, a few more wars with the French and it ballooned even more. But we did win, well its traditional?

Tax payer money does not increase wealth

In point of fact, there is a problem with the National debt, in that 300 years later it is monies tied up, and not in circulation, this is both good and bad, good it reduces inflation, bad, in that Tax payer money does not increase wealth, it merely circulates around. It is why Gordon Brown caused the boom and bust, he used taxes to fund the finances, which just circulate and make people feel better off, but private monies are made to work efficiently and create more wealth. Less boom, but also less bust, and in that less bust we are better off, because of efficiency gained investing that money, with less boom, but the capital (another word for money) works harder.

Hence my banging on about savings, the higher the savings ratio, the more investment there is in industry and Commerce. Japan had a fantastically high saving ratio for the decades after 1945. Today Japan runs a Trade surplus (not to be confused with a Budget surplus) and hence even after twenty years of deflation, Japan still has a super high standard of living, and the Japanese invest in their own ideas, turning them into the money making products of tomorrow, and why are they making profits and running a trade surplus? Because they are more efficient.

In UK there is a regular gnashing of teeth over small startups being funded overseas, of course there is, we don’t have the spare Capital as individuals to invest. Just this week, there has been a report in the Daily Mail about the amount of debt on credit cards that is currently being run up, 11% increase on last year.

Burmatex carpet tiles
Burmatex is a small company that is local to me, retains some profits for R & D. Airea Plc is the holding company listed on the Aim market, on the London Stock Exchange

Here is the point, on the face of it there is little harm in this. In fact just like the Budget deficit, it means UK individuals don’t have the spare cash savings, to invest in commerce, industry or trade.

lower chance of creating or investing

The Budget deficit means we pay more tax, and so hinder ability to sell our goods and services. The personal debt means we have a lower chance of creating or investing in that next big thing.

The Budget deficit is manageable and the Chancellor doesn’t feel the need to reduce it more quickly, because interest rates are so low, savings are so low because the interest rates are low and there is a lack of incentive from H. M. Treasury to save.

If May and Hammond want to improve Britain’s Trade performance on the World stage, they have the opportunity to do so, while Sterling is so low.

They won’t, because it is not on the agenda, and they lack the imagination to change. The continued reliance on consumer spending will be maintained. Which will hold UK back, more than any #Brexit negotiations.

Socialism

SOCIALISM IS IN RETREAT

Socialism is on the retreat, the Socialists have been getting themselves in a right tiswas over the Trump victory.

Trump and Farage gold door
President Elect Donald Trump and Nigel Farage MEP, who led the campaign for Britain to Exit the EU.
2 white men, who appreciate Democracy?
Now there’s a good racist comment?
Pic courtesy Daily Mail

And the indications are that President elect Trump has now won both the Electoral College and the ‘Popular vote’, My twitter post on final result, note has to be confirmed at time of posting?

Quite right too, the Socialists extreme fantasy politics has had its day. For too long the Socialists have supposedly been fighting a class war. No they haven’t, they were creating false divisions within society, these divisions, had either already become none existent, as in the case of the working, middle and upper classes, which started disappearing in the 1960s, and by the 1980s gone completely? Or were quite nebulous, and so could never be quite pinned down, but Political Correctness exaggerated many aspects of so called inequalities, women in work and the glass ceiling etc.

Centre Politics is back, ordinary hard working people are having their say, through the ballot box, it’s called Democracy and is smashing Socialism, the none violent way.

Let’s be clear those ordinary people who voted for #Brexit, were wanting freedom from a pseudo Democratic entity, the European Union, they are not extremists.

betting slip trump to win
I had a vested interest in Trump winning, £30 lol
I could have made 3 times the amount by not betting weeks before, but after the polling had begun. I saw the queues & knew he had won, apparently the odds lengthened to 9/1 hey ho

Donald Trump isn’t an extremist, and neither are his supporters, he has merely become stalled off, with a nasty venal Political class that has no connection with most ordinary hard working people, and Hillary Clinton represented the worst aspects of that Political class, she is Fascist lite.

The Socialists have created their own class division, either one toed the Politically Correct line, or was labelled racist, homophobe or Xenophobe, or any-other-phobe, it is all in their extremist imaginations.

The extremists of both Left and Right in Politics are Socialists, as I keep having to correct silly people on Twitter, and informing them that the term Left and Right wing with regards to politics, is French. What happened was, the two strands of Socialism, Communists and Fascists refused to sit next to each other in the French Parliament, which was and still is horseshoe shaped, the Liberals sat on the left the Conservatives sat on the right.

As it turned out the Communists were the first to have seats in Parliament, and promptly took up their position on the far left of the curve. Later when the Fascists gained some seats, although they were also Socialists they refused to sit next to their hated comrades. So they promptly sat on the far right, even though their Politics is even more extreme?

In UK the term is used to indicate Conservatives and Labour, although in actual fact, it soon breaks down. Edward Heath was well left of the Conservative party, Mrs. Thatcher was a tad right of centre, but has been demonised by the BBC and other Socialist media, so that today most people under 40 are brainwashed into thinking Mrs. Thatcher was extreme far right, what a load of Bolshevik tripe.

The problem is, Left and Right is such an easy shorthand, I use it. In fact I suspect most people use it, as just that, shorthand, but unfortunately it fails to do the job. When it comes to Communists, Socialists and Fascists, it does not reflect the facts, they are all Extreme Right Wing in that they are against freedom of speech, and promote fantasy Economics, which for want of a better term I will say is Left wing, it has no value, because it is ignores some hard economic facts, the main one being as the rich become richer, the poor become LESS poor.

Brexit jubilation
The Democratic Revolution is here. Upset a Socialist and Vote

But the Economics reflects the insanity of Socialism, Trump can be labelled extreme right wing because he speaks without thinking, which is always incautious. But when it comes down to the nitty gritty he is quite moderate, and sits somewhere close to the majority of peoples thinking. The Socialist leaning media in both USA and UK don’t allow this facet to be shown, there is too much nuance required, and many pundits in the Main Stream Media regard the general mass of the population as dunderheads, and never look in the mirror to see who the real dunderheads are, namely themselves. In USA the main left wing media is CNN, in UK it’s BBC and Channel 4, both riddled with Politically Correct (and hence totally wrong) Socialists.

The general perception of hard right wing is engendered by the left wing media, but it is because there has been a slow drip, drip, of what is deemed to be centre ground politics.

Socialism is not centre ground Politics that is certain, Socialism is extreme Politics that represses freedom of speech, and is against Democracy, it has used Political Correctness as a club to beat to death freedoms, it is now deemed unacceptable to voice opposition to anything deemed so called mainstream thinking.

If you are not PC then you are demonised, for having freedom of thought.

The fight back has started, and should be carried to its conclusion, trample on extremist Politics, namely Socialism, it’s nasty, venal, impoverishes, leads to an unfair society, represses freedom of speech and re-writes History. White British are the heroes of anti slavery, Black Africans and Muslims continued to enslave and deal in slavery long after it was abolished in the British Empire, Modern Democracy, Freedoms, stem from Magna Carta, the Glorious Revolution and the Bill of Rights, the US constitution, and Adam Smith’s Wealth of Nations.

A piece of shit
If you read the Novella by Francis Bacon, ‘The New Atlantis’ and then read this tripe, you will find they have same ideas. Bacon wrote his fiction in 17th Century as a fictional story nothing more?

Britain, USA and the other G7 Countries, were NOT made great by the odious parasite Karl Marx, and his rantings, nor was Britain made great by the British Labour party certainly not empty head Clem Atlee (by far Britain’s worst Prime Minister), and his failure Government of 1945, which with Wilson and Blair nearly bankrupted the Country on three occasions.

I note that Marine Le Penn has dropped her Father’s extreme views and become largely mainstream, her concerns are over numbers of immigrants and integration, if she keeps to that and looks to relaxing the extremist Socialist French employment laws, she will win the next French Presidential Election.

The Socialists will be even more dismayed, which will only show how arrogant and stupid they are.

Mainstream centre Politics is seeing a resurgence, the left should be crushed, then stamped on, then made a joke, because largely that is what it is, a sour joke.

Socialism has nothing to offer, it is based on hate, and creates unfair society, by trying to pull everyone down to their venal level, just what it supposedly, is against, which also shows what lies Socialism creates.

6th October 2016

#BREXIT

Harold Bayeux tapestry
October 14th 1066, the world didn’t know it, but it changed, for the better.

We arrive at the 1st #Brexit Conservative party conference, and new Prime Minister Teresa May, has been in full swing and full of confidence. Why not, she has played a blinder, while the Referendum soapbox was steaming ahead, she kept a low profile, nominally supporting her Prime Minister David Cameron, but at the same time leaving her options open by not criticising the #Brexit campaign, and keeping a low profile, and largely keeping schtum.

One side note before we go further, on 14th October 1066 England underwent its greatest upheaval for centuries, the Normans, led by William Duke of Normandy successfully invaded and conquered the Country. There followed many years of upset, but basically the result was the Britain you see today, the next few decades will probably be decisive for the world?

Teresa May was quite right to take that line, and the reason being I suspect, she was like me, basically a ~don’t know~. Not a don’t know in the sense of I have no idea what is being debated, but a don’t know in the sense, do we really know what is going on, and what are the fundamental long term arguments.

it was Democracy that decided #Brexit

Many of my followers on Twitter, thought I was four square for #Brexit, not a bit of it, I was all for, what was best for the Democracy of UK. All my posts are still there, to check out, I was worried about Sovereignty and Democracy, with a smidgeon of the economic consequences, all the other arguments were confetti that would be blown away in the aftermath. I made my final decision to #Remain or #Brexit, in the voting booth, and it was Democracy that decided #Brexit, or more accurately the absence of any way of reflecting within the European Union, the will of the people in a Democratic manner. The EU is Fascist, oblique Socialist, in design, hence it fails to reflect the will of the people.

Finger post
Which way now

Jean Claude Juncker, a modern Mussolini, with his arrogant attitude, towards UK certainly put a few nails in the EU #Remain coffin. Here was some cretinous jerk, starting to make dark threats about the consequences of voting leave. But it was the fact he said nothing about the way the EU is constructed, and that we the people could not vote him out, along with its lack of representation of the will of the people, that I believe helped the #Brexit campaign win.

And here I suspect is the key to how many voted, a lack of any way the will of the people can be reflected. This manifested itself with most people as ‘give us our borders back, but also our ability to decide our own Laws. I say this with some confidence, purely because I have had a chat since the vote, with a couple of #Remain voters, neither will object to being labelled ~older~ ladies.

The first is called Annette, and her words were, “I voted #Remain, because I listened to what the younger people were saying. I voted for the future, they saw ahead.” However she now regretted it, purely because she had realised that Sovereignty and ability to have your voice heard by Government, counted just as much as the Economic argument, for being the member of an elite club. Most of this argument had surfaced after the Referendum, but none the less crystalised in her mind, that the people had made the correct decision.

The second (a beauty who shall remain nameless, purely so I am alive to write my next blog lol) is my ex Girlfriend, she voted for Economic reasons, she had been in conversation with someone, who had put the economic case very well. Here is where the #Remain side had their strongest case.

But she regretted her vote, not because she thought Britain would do better economically out of European Union, but simply because she thought that Brussels didn’t reflect the will of the people, put another way, Sovereignty over un-democratic processes. Again it was driven home forcefully after the Referendum, when various foreign dignitaries started to threaten Britain. The Ex is not one to fume, but Juncker and his ilk started to make her blood boil. Mrs May, whom the Ex was wary of, is starting to win over her confidence.

Just for the record, if Teresa May continues the way she has started, she will rank as one of our best Prime Ministers in recent times, it still doesn’t mean I’ll vote Tory?

how much leverage the #Remoaners can muster

Meanwhile the economic outlook is looking rosy, don’t be fooled, it will turn downwards. The FTSE is currently riding high, at around the 7,000 mark, but will take a dive once the actual reality sets in. How much, will depend on how much leverage the #Remoaners can muster, they still have sore heads and are biding their time to pounce.

The Market will decide?
The Market will decide?

The result might be choppy waters ahead, with the pound staying low. Even so, Mark Carney the Governor of the Bank of England, will still not raise interest rates, purely because his political masters will not ask for it. So far there has been no change in policy from Mrs. May regarding consumer spending and business investment. For further reading on this see my previous blogs on href=”http://www.johnashtone.com/pre-referendum-blogs/”>#Brexit.

The bright spot in all this, is the fact that any perceived downturn in Britain’s economy will be just that. Whilst perception is 90% of reality in most peoples (or Markets) minds, the reality of UK’s trading position will remain strong. Much to the annoyance of the #Remain faction, but the economy will remain fairly strong, but the downturn will give the BBC something to crow about, while the markets drop, and comment ‘Despite #Brexit’ will ring loud and clear from the Biased Broadcasting Corporation, but the results in the end will show #Brexit bringing more benefits than disadvantages.

But hey always remember, if it was on the Beeb, and about #Brexit, it was probably pessimistic a pack of lies to start with?