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?

 

22nd September 2016

NHS

Labour appears to be in meltdown, all I can say is good riddance. However I would not write them off yet, or write them off forever, even if they take a severe knock now, after all they didn’t invent idea of NHS, yes you read that correctly, they did not invent idea of NHS. NHS Crisis 2004 They did however manage to convince UK public, NHS was affordable and their invention?

nhs-ambulance-1j

just look at those who play quidditch

People will always believe fantasy, just look at those who play quidditch, a fantasy game from a series of books about a fantasy world. In the books the participants ride broomsticks through the air. This doesn’t stop these enthusiasts from believing they can recreate the original on the ground?

And they do believe, hallelujah, praise be to Joanne Rowling, the philosopher who thought up the game, and is revered alongside Socrates, Hulme, Paine, Locke, and Francis Bacon. The last of whom, wrote a short story called ‘The New Atlantis’ from where Marx stole his ideas. The difference was, Bacon knew he was writing fantasy, with no basis in economic reality, Marx just ignored this and created a fantasy economic world as well. But Marx couched it in words that people could take to believe, so they do, and try and impose this fantasy Socialism, even when it is shown to be a total failure. This goes some way to explaining why UK public have such ‘Faith’ in a 3rd world standard NHS? NHS Crisis & Labour 2002

the total failure that is Socialism

Their argument every time is, well no one has tried Socialism properly, they promptly forecast the downfall of free trade or laissez faire, the latter hasn’t happened since the dawn of money, and the former in its short life has failed miserably every time. That is true belief, in a fantasy idea, the end of a stable reliable economy, that has been shown to work for thousands of years. To be replaced for the total failure that is Socialism that impoverishes, starves, leads to corruption and has no basis in reality?

The problems arise when this continues to be applied even to none Socialist ideas, like the NHS. William Beveridge was a Liberal, and an Economist, grounded in the real world, in November1942 the report he chaired was published on what he saw as the five giant evils facing the modern world. His report has been abused and re-appropriated by the Socialists in their fantasies ever since.

pontefract-nhs-4j

The two most misused are welfare of the family or squalor, and health. For reasons to do with dogma of the Socialists, the Politicians and supporters of many colours, have today this odious idea, that Politicians should meddle in the running of the home, and that they know best how to run all manner of things, that quite frankly have nothing to do with Parliament, or Government, squalor being the main one, after certain situations have been resolved, it is generally self-inflicted, I shall return to this in future blogs.

Which brings us back to NHS, NHS Crisis 2005 since when did the average M.P. know how best to run a Hospital, a health centre, a doctor’s surgery. The people keep up this fantasy that they do, and support four square the idea of the NHS?
So ask the simple question, would you prefer your local group of GPs to run your local health centre, or a collective of MPs to run it, and a clear message comes back, the MPs.

Except of course ask the question like that and one is laughed at, which is why Blair and Brown had such a field day, they could delegate a Labour M.P. to run the health department, and they in turn would dictate, what the policy was. And I use the word ‘dictate’ purposefully, dictate they did.

And then what uproar, when the Tories make changes to allow health professionals to be able to juggle the money and use it as they see fit? It is an improvement, but it is also fraught with faults.

Let’s start at 1947, NHS Nursing Times archives 1948 is structured all wrong, and will never work, plus it now covers items that have nothing to do with general health, and are specialist areas that should not be free.

The original setup just Nationalised all Hospitals, and the setup put all teaching Hospitals under the direct control of Aneurin Bevan, the person responsible for this farrago, and hence why it was such a shambles.

Also it is a different world, I regularly tweet there is no poverty in UK and get abuse, but the fact is, what we call poverty is merely people unable to handle the money they have, or just plain irresponsible, and nothing to do with Government. But the Socialists believe it is, and they are backed by a Tax funded propaganda media outlet called the BBC.

pontefract-nhs-2j

The NHS has been chaotic from day one. I came across this purely by accident more years ago than I care to admit to, but let’s say, the World Wide Web had not been invented. I’ve long forgotten what I was looking up, at the local Library, but I was going through the old Newspapers, on microfiche, they covered 1947, and one news story I came across on numerous occasions, were the queues and chaos in the newly formed NHS. Now this struck a chord, because I remember the chaos of the 1970s, in the NHS and funding crisis, I looked up the 1960s, well the stories lessened, but didn’t go away. Even with the Wilson Government, there were constant problems, mainly a shortage of money and queues, sound familiar.

The plain truth is, the NHS NHS Crisis 2001 again Labour? was set up wrong and had too wide a remit, today it is the ‘rights’ of this or that to drugs or procedures, gender change anyone, breast implants, gastric bands etc. etc. etc all free on the NHS, why?

because health is total

Here is the bit that the Socialists or any other economically ill-informed person will not wish to read. There isn’t enough money in the world to properly fund NHS, because health is total, and just like the speed of light, the nearer to complete funding, the more its requirements expand exponentially, and more in some cases, so there is never quite enough.

Also there is no local answerability, it is all central, when people go into Hospital and say how wonderful the NHS staff are they are living a lie, go into any Hospital around the world, whether India or USA, you will find dedicated staff, who work beyond what is expected. Speak to people in UK and they believe it is only NHS that provides this type of dedication, my brother living down in Spain disagrees, but then he’s only had to have the services of Spanish health and NHS, and wouldn’t want to be ill in UK?

Next where the money actually comes from, again the Socialists are in for a big shock, because I’m putting the figures, in an easy to understand format.

pontefract-nhs-3j

I will start with the wealth of the Nation, but first some ground rules, with populations I’m rounding to nearest tens of millions, for the purposes that will become clear, it doesn’t affect the outcomes. Income to the nearest $1k and it’s in Dollars for ease of comparison.

So population of UK 60 million, now here is the first shock, around 14 million in UK don’t earn any income, simply because they are under eighteen and dependents. According to the Office for National Statistics, the number of people employed in autumn 2015 was around 31.4 million.

These employed pay the majority of the taxes required to fund NHS. Mainly because the previous line of tax, was funded from tobacco, but that has been decimated, by Labour?

As people smoke less they become more of a burden on the health service, opposite to the lie expounded at the time by Labour that stopping smoking would save the NHS £billions, liars no it doesn’t, Labour you lied, but that is natural with Socialists. The burden to the Health service in UK is rising dramatically, as those who would have a happy life smoking their lives away, are now miserable sods who don’t have a good laugh and drop dead aged 72, from tobacco related disease. They moan, feel more put upon have less optimism because of the stress from not smoking, and suffer longer illness, while they live out their extended lives to 78? Also once over 66 they don’t earn as much, many are on pensions, whether State or private and even when on both contribute substantially less in taxes.

top 5% at around $33,000

This now brings us down to those earning, and here again there are some shocks, if you are earning more than £10,000 pa ($13,000) you are in the top 16% of earners in the world, in fact just living in UK puts you in the top 20% of richest in the world, that includes the none earning under sixteens, because they have access to wealth via their parents, etc. One of the prime movers for immigrants wanting to come to UK is the fact they are more likely to get regular work, and so put themselves in the top 8% of the world’s richest, and most look to the top 5% at around $33,000 (£25,000) by putting in the hours and hard work, welfare is seen as a fall-back or for the wife, we are talking Muslims here.

Back in 2007 when the world was in chaos and Lehman brothers were collapsing, there was a teacher on the TV, she had a simple answer to the crisis, echoed by many, tax the bankers, oh how the Socialists chimed in agreement. If she was a Maths teacher, she should have been sacked on the spot for being useless and totally wrong.

Each Spring the Sunday Times newspaper publishes a rich list, unfortunately it doesn’t give annual income and is sometimes thought to be nearly correct about their wealth? However on the principle the top 10,000 people in the country earn over $650k (£500k), this gives a figure of $6.5 billion. Now unfortunately for our teacher, few of the 10,000 will be bankers, but let’s be generous, and say 1,000, or 10% of them are, now let make the pips squeak, and tax their income at 99%, if your ahead of me, and these easy figures you should be, the income to the treasury of the top 1,000 bankers would be $643 million, or £495 million, less than half a billion sterling, and that is with 100% efficiency, at 99% of their income.

Sorry how many tens $billions did the bailout require, but back to the original point the NHS 1978 NHS is the Winter of Discontent and health costs. Again assuming an average $6.5 billion income in the top 10,000 people in the country, and define income, I was a lowly shopkeeper, and could rarely tell you my actual earnings, only that they were offset by tax reductions and capital investment? At 40% with 100% efficiency in collection it still only amounts to $2.6 billion or about £2 billion.

pontefract-general-nhs-1j

Now here’s why Chancellors of all colours tax the poor, there are around 31,000,000 people in the work force, they contribute the bulk of the $200 billion (£155 Billion) in Income tax revenues. Hence why Gordon Brown and Labour were so keen on taxing the poor, 10,000,000 of the poorest still contribute a vast amount more than 10,000 of the richest, after all there are 1,000 times as many of them.

It was the Lib/Dems forced the hand of the Conservatives to increase the Tax allowance, from the 2005/6 rate of £4,895.
It is now £11,000 so much for Labour helping the poor? First they unload a 3rd world system of health, the NHS, and if any thing goes wrong, which it always does, blame everyone else, the irritating thing is, in the face of the facts, people believe Labour lies.

 

8th Sept 2016

CALAIS

Burghers of Calais they certainly got a better deal, than the one that persists today
Burghers of Calais they certainly got a better deal, than the one that persists today

There really does appear to be a problem living in France these days, which must be the reason so many are heading for Calais. Once upon a time it was easy, learn to speak French, retaining a slight accent, plus the mandatory gallic shrug, and generally they took you to their hearts.

in built dislike of Johnny foreigner

So why are there packs of immigrants, in the Calais jungle, many of whom speak French, heading towards Britain? After all aren’t the English supposed to be racist, insular with an in built dislike of Johnny foreigner, and our only saving grace is to be good mannered. Well the liars at the BBC would have us think that, but it seems all these immigrants at Calais disagree, except possibly about the manners. “I held a gun to this Englishman’s head, and he replied, ‘Sorry old chap but do you mind not pointing that peashooter in my direction, the bally thing might go off’, and then apologised that he wasn’t giving me any of the money I was demanding?”

There is one underlying reason Johnny Foreigner is heading for Britain, it is the same reason many head for Germany.

Work.

Ooh you’ve got a wicked tongue, as the 1940s comedian Rob Wilton, would have said. Alright many of the immigrants in Calais have weighed up the advantages of welfare, but they get welfare in France, it is the job opportunities that are lacking in la belle France.

As soon as Johnny Foreigner (I’m not hyphenating, for Johnny, read both sexes) hits our shores, he/she checks any welfare and somewhere to live, then gets a job. And how do they do that so easily, the same way I did with the temping agency ‘Flame’, they apply, then turn up on time?

Band Slade Flame album cover
Flame the film by Slade, this depicts the Album cover.

Some years ago, the Union leader Paul Kenny accused the jobs agency Flame, of giving preference to Polish workers. They had advertised in Poland, probably because they were having success, and knew what they were doing. Unions of course have no idea on running businesses and hence cock up all the time, think Arthur Scargill, numpty. Now as it turned out, I had some months earlier worked for Flame, in the place where they were accused of only employing Polish workers. How had I got the job, I saw an ad online, for Flame Rotherham, I phoned up, only to be told I needed to be registered with them. Well I’m registered with the Wakefield branch, said I. Their reply, you need to be at South Elmsall within the hour, I got into my little car and tootled down to South Elmsall. I was hired, immediately, yes many were from Poland, but a few were not, how had they got jobs, they applied?

Yes Flame had advertised in Poland, so what, we were (and still are as I write) in the Common Market, what was the problem the Unions were having with this, simple, the puerile little minded socialists were excluded. They were not in control, well guess what.

western Europeans, question everything

The hordes in the Calais jungle like that idea, that no one is in total control of them, they are free to choose where they work. Many of course are Muslims, and have difficulty getting their heads around the idea, that having the freedom to get any job they wish, is bound in with freedom to question anything and everything. Part of the problem with many Muslims, is they have been led to believe, by Socialists, that they are immune to questioning, especially by any person with a sense of humour. In reality western Europeans, question everything, hence why Britain voted to leave the Common Market, 17 plus million people questioned the abilities of numpties like Jean Claude Junkers to be able to run a bath, let alone be answerable to the electorate. He failed in his abilities to be answerable to the electorate of Britain and was too dim to understand, that Brexit, meant #Brexit. The Muslims get upset that their God of peace is seen as a joke, and certainly not a beacon of peace?

Britain stopped lopping off heads, just after we removed the bonce of King Charles I for having the impertinence to suggest he could Tax us without our having agreed to it. Big mistake Charlie, the peoples elected representatives in Parliament, decided they were the ones who should set the tax and how much should be extracted. So for Charlie’s trouble, Oliver Cromwell, who was big in Parliament at the time, said orf with his head, and orf it came.
The current monarch ‘Her Maj’ decided she wasn’t going to risk it on the head lopping front, and decided she’d pay tax, but only on condition din dins for the Corgis was tax deductible. I made that last bit up, but it put a smile on my face penning it?

Personally I think Jean Claude Junker’s mother still has to feed him and wipe his bottom, he certainly doesn’t seem grown up enough to run a hot bath?

But it is the French Government and its Socialist policies about work and the inability of companies to sack, or lay people off, that is one reason France has high un-employment, make it easy to sack workers, and employment goes up? Get rid of the Euro, and that would also help unemployment in France fall, this would take some of the pressure away from Calais.

A Labour MP, courtesy of Daily Mirror
A Labour MP, courtesy of Daily Mirror

I notice Chuka Umunna has been getting hold of the wrong end of the stick, in a committee meeting, he was grilling some #Brexit bloke, and demanding that there should be a date for Europeans to become British and so be allowed to stay. Unfortunately the person at the receiving end of this didn’t have the nous to give the definitive answer, namely the courts will decide, once an arrangement has been decided.

stay in, mainly on the Economic points.

In fact in many ways Umana’s summed up #Remain’s problem, they are fixated with the immigration question, when in fact most people voted about Democratic Sovereignty and Britain’s ability to self-determination of Law by Democratic process.
The ex-girlfriend ‘accidentally’ bumped into me yesterday, at my Mum’s, I asked her how she had voted, and it turned out to be Remain. She added that it was someone she had been talking to who had convinced her to vote to stay in, mainly on the Economic points. When I said I voted out on purely Democratic principles, in that there was a lack of them in Brussels. Her response was, she had since thought about the lack of Democracy and regretted not voting #Brexit.

I still ended up in the doghouse, with the ex, something about the lack of snogging, while we nipped out for five minutes in my car? One time decades ago when I suggested lingering for a romantic moment, under one of the Gas Lights that Leeds Council still maintains in the City Centre. I was given the cold shoulder, with the explanation she didn’t want people looking at her, there wasn’t a soul about. Yesterday we were on one of the busiest arterial roads in Leeds?

25th August 2016

Smiley Bales John Ashtone
Smiles make people happy, more than any promises made by a Politician

Quantitative-easing = wrong strategy

So which twits in the Bank of England and by extension the Treasury think quantitative-easing is needed. Also what do they hope to achieve, because whatever it is, it’s failing big time. The Bank of England, has just had to pay a premium for the purchase of Government bonds of some of the latest stimulus package. Which raises the question, have either the BoE or the Treasury any idea what they are doing.

List of International Government bonds
UK Bank of England is buying Government Gilts.
Gilts are gilt edged securities, namely they are guaranteed by UK government.

Contained within the quantitative-easing package is £100 billion of loans that the Banks can make to industry, it sounds a lot, however, it is chicken feed, compared to the deposits British people could raise, if instead of having cut interest rates, Mark Carney had raised them, and quantitative-easing would be unnecessary.

According to the Office for National Statistics, between 1988 and 1992 household savings ramped up from just below 4% to a smidgeon short of 12%, so a three-fold increase, now to just take the top 10% of savers who currently have around £60,000 in ready money (liquid as opposed to illiquid assets like pensions and bricks and mortar) I make that a cool £720 billion that would head for the banks if the Government were to raise interest rates, and guess, what?

a figment of imagination, for people with a lack of imagination

Savings lead to an expansion of industry and commerce, yes it is slow, but the increases in efficiency outweigh any slowness in action, the real impact from 1992 was seen by Gordon Brown five years later, who then promptly made a hash of it, but that is not the point, this idea that we need to keep interest rates low, to stimulate the economy to avoid a recession is all illusory. Mainly because we are not about to enter a recession, it is a figment of imagination, for people with a lack of imagination, the whole thing is not currently about to happen, that is at least eighteen months to two years down the line.
 

Stock holding Companies buy stock out of cash generated by sales, but profits increase when investment in Capital spending increases, for this borrowing often helps, the more deposits banks receive, the more they lend to Businesses.
————————————–
 

This also prompts the question, what happens when we hit recession, do we go into negative interest rate territory, and why, there is no need.

Janet Yellen looks to be playing a blinder, she was criticised for increasing US interest rates, the doom mongers came out in force, but they have been proved wrong, people in the States are starting to look at saving, and to continue saving. So where is the recession in the US markets, it aint there, simply because although the US economy is not steaming ahead, it aint flat on its back either. The first round of quantitative-easing, probably worked, mainly because the Fed, and BoE had not had the nerve to increase interest rates after Lehman brothers collapsed.

So Joe and Joan Public in the States are beginning to see their wealth grow, because they are starting to just save that little bit more, and the reason is simple. When they put their money in the bank or savings and loans companies, they see a small return. Meanwhile businesses in the US are being able to borrow money that is from the Public sector not Government.

fear of a recession that never quite happened

Now I already hear the Keynesian voices saying yes, but the US went into quantitative-easing big time over the last seven years. And so they did, but after the first round, it got them absolutely nowhere, it just inflated the Stock markets. It is argued that it avoided a recession, well sorry but that is tripe, the first round back in 2007/8 possibly did, but after that, what recession, it was again the fear of a recession that never quite happened, but importantly wasn’t going to happen.

Meanwhile the threat of the US economy imploding under the weight of debt is now receding, and receding fast, savings are starting to recover, and far from interest rate cuts, the betting is that the Fed will raise interest rates, and Yellen has said she would like to reverse the quantitative-easing process.

the main impact would be on savings

It is a shift that needs to happen this side of the Pond. Currently Sterling is depressed, and an interest rate increase, far from making the pound bounce up, would I suspect make it just shift up a tad, but then after the shock it would rise, as overseas investors started to look at their returns. But the main impact would be on savings, yes the high street would be hit, but quite honestly, so what.

Steel Racking
More stock imported for the retail sector.

All that means is there are less imports, the major beneficiaries would be all the people who currently, hold a couple of hundred spare, or few thousand, it would mean that people would be better off financially.

Note an Economic conundrum, as efficiency kicks in and people are sacked to be replaced by a machine or some software, the number of people in employment rises. This is due to the fact that as companies make higher profits, other people invest in that type of business, to get a piece of the action. Also these expanding companies all use services, whether it is banking, advertising, accountants, solicitors, couriers, pizza delivery etc. etc. etc.

the vast majority muddle through

There is another of the many Economic conundrums here, most financial analysts immediately look at the impact on house borrowing and say, raising interest rates would hit first time homebuyers hardest, and within certain boundaries this is true. However, it is amazing what one can find to cut back on, with household spending when push comes to shove, and the vast majority muddle through any interest rate increases. Meanwhile the people who are struggling to get their foot on the first rung of the homeowner ladder, suddenly find, they have more money to put down as a deposit, for the simple reason they are saving more, why because the incentive of interest rates makes saving worthwhile. No quantitative-easing needed, the public are quite capable of investing their money, they just need the incentive, higher interest rates give them that.

So what on the face of it looks like it would be bad for first time buyers is actually good, plus overall the amount of debt in the economy reduces, again this is counter intuitive, because on the face of it increased lending is surely going to raise the debt levels. In fact it is percentages at play, namely the increased savings percentage.

Savings are currently less than 2%, so just raising them to 1988 levels of 4% would be a start, and this then decreases the percentage of debt, while as already pointed out, increases the overall amount available to lend.

the banks had so much money being deposited and hence sloshing around?

I bought a house around 1994, just as the hoo hah over negative equity was dying down, house sales were still in the doldrums, and I was amazed that the bank, were willing to give me a mortgage, at 2% above the base rate, which was around 6% and inflation around 3%, making the mortgage around 5%, which in the 1990s was excellent, in fact the bank manager (yes I still had one, a super chap called Richard Wharton) admitted they were having difficulty reaching lending targets, the banks had so much money being deposited and hence sloshing around?

HSBC branch exterior
HSBC bank Park Row Leeds.

Most of the money went to businesses, and part of the reason when Gordon Brown took the helm at the Treasury he had such an easy time to start with was the result of investment in business over the previous 5 years.

One would assume (always risky) that Teresa May would want a booming economy when she next stands for election. Well if she does, the investment needs to start now. And not piddling £100 billion of invented money, the Treasury could quite easily set new targets for the BoE, not least £1 trillion in savings, more to the point it wouldn’t be invented money, and would be invested more wisely, after all it belongs to someone somewhere.

There is another stimulus that is needed for house building, and that is the Town and Country planning act 1947, it needs scrapping, but that is for another day.

 

11th Aug 2016

Carney, Wrong, Wrong, Wrong

Yellow smiley face
I’m smiling, because my pension which is rising due to Quantitative easing, is getting ready to be cashed.

The Bank of England under the auspices of Mark Carney has reduced interest rates down to their lowest level ever, or 0.5% just to clarify half of one percent.

The reasoning is, to stop UK going into a recession.

since the Lehman Brothers crash

It is a strategy that satisfies only in the short term, and is wrong, as all the previous interest rates have done since the Lehman Brothers crash.

If Her Majesty’s Treasury, and hence the Bank of England wanted long term growth, then interest rates would have been handled in a completely different manner.

Certainly instead of cutting them, they should have gone up, and be ready to go up again, but that would have meant the Government having a long term strategy, it hasn’t, it’s short termism, so again wrong, and doing nothing for UK industrial and commercial growth.

Specialist FLT
Industry at work

The reasoning behind the B of E’s interest rate cuts, is to stimulate consumer spending and keep the economy from going into recession, it works, but does little for industrial growth.

It has been the policy of all Governments right back to 1945, but is now starting to run out of steam, the reason, simple there are not the savings, to invest in Capital spending.

H.M. Treasury is directed by the Government of the day

Mark Carney the Governor of the B of E, gets his direction from H.M. Treasury, and H.M. Treasury is directed by the Government of the day, and every man jack of them has followed the same short to medium term policy, keep consumer spending going, to keep UK from hitting the recession buffers.

What utter codswallop, it leads to a lack of savings, so putting it on the wrong side of history, this can also translate into increased debt, again a wrong strategy, and with the UK it is the case.

At this point please note, most of what I write about UK also applies equally to USA, although American savings have been just a tad higher and the Trade deficit in percentage terms has not been quite so bad as UK, but US readers can draw the same conclusions, for B of E read the Federal Reserve, for Mark Carney read Janet Yellen, and for ISA read Roth IRA.

Financial Times
Financial Times inside page

Now before we go further it must be pointed out, that at least there has been some attempts by the various Governments to increase savings, not least the ISA scheme, where at least one can save £15,400 per year, and not get hit by the regular taxes. Indeed you can have either a cash ISA, or a Shares ISA, and the shares side of it, has created a few £Millionaires, who have been very savvy with the particular stocks they have purchased, and made sure all the dividends are reinvested, and that is the trick. Keep re-investing the divis and interest starts to build on interest.

Pensions, these were first promoted enthusiastically, back in the mid 1970s, but the backing for pensions has been patchy, Gordon Brown famously stripping £Billions from them, by stopping tax relief, which meant either one paid extra with each monthly payment, or one received less in retirement, and this could be drastic, if you were in your 20s to 40s. Hence why Teachers got it wrong with the general public, and didn’t get the backing they thought was their due, when it was announced they would receive, 10% less pension when they retired, many private sector workers, who had paid into their pensions for years, thought why didn’t I only having a paltry 10% cut?

doesn’t increase the amount individuals have in their rainy day kitty

So people in UK don’t have enough saved in their pensions, along with too few savings all round. Hence why the banks don’t have the cash to lend to industry? But the Government has supplied them the money to lend I hear you cry. Well yes, but that doesn’t increase the amount individuals have in their rainy day kitty. It is this that makes the difference, because, if you have Amy Ambitious, goes along to her bank to buy kit for her ~super duper gizmo company~ and has only her few savings, the bank is, quite rightly, going to want to know how much she can put up as collateral.

At this point I break the story, here is the alternative scenario, instead of an interest rate cut, increase interest rates.

Put interest rates up? Has the man gone bonkers?

Certainly not.

It is one of the key avenues to stimulating savings, yes I realise the Government also needs to enact other incentives, like tax breaks, but increasing Interest rates can boost industrial investment, especially in Capital equipment. This leads to an increase in productivity, and hence to an increase in real wages. It also has the effect of lowering overall debt, and with an increase in commerce and trade, it can lead to a reduction in the trade deficit.

Brand names
Popular brands that sell.

There is a downside, and that is a drop in consumer spending, but even this has a positive side, which is reduced imports, the whole reduces the trade deficit, and as I have previously posted, that should be high on the agenda.

In fact a prime reason for increasing interest rates, would be to increase investment in UK, but at the same time, this should also bolster, savings, which brings us back to Capital.

In Economic terms Capital is both savings, and can also refer to major company purchases, and here we hit one of the many economic conundrums. Let’s say Amy Ambitious’ super duper gizmo company, decides to buy in a new 3D printer, purchase cost £100,000 and then sack 50% of its staff. But the purchase of this piece of kit, makes the company much more efficient. What happens? Well they sell more product, but the nature of selling more product, more efficiently means more people can afford more ‘super duper gizmos’.

This is precisely what happened with Calculators, the first ‘All’ electronic calculator was built and sold by Sharp, the Japanese Electronics company, it retailed for around $240 which translated into just over 3 weeks wages in USA.

One desktop calculator, three weeks wages?

Sharp started making big money, and large profits, and were soon joined in the game by other competitors. Who started to undercut Sharp, by offering slightly better designs, and improved ‘functions’.

this was all done with ever diminishing retail prices

The important thing to note is, this was all done with ever diminishing retail prices, but yet, companies were able to afford to borrow money to invest in capital equipment which gave huge profits, so there could be money for Research and Development (R & D), and this led to ever cheaper calculators, and drove some once profitable companies out of business, leading to people being sacked, or left unpaid for their work.

But these newer companies could trade on smaller prices, and still make large profits, all due to the fact people had saved, and so the banks had money to lend that they needed to turn a profit on interest, so they could pay their savers higher interest on their savings. And indeed they lent to businesses who then invested in machines that could produce more products using fewer people. So much so, you can go into a Pound/Dollar shop and buy a calculator that has more functions than some computers in 1968?

Desktop calculator
Desktop Calculator and pen

Now here’s the conundrum, there are more people today, employed in manufacturing, pocket calculators, than back in 1968.
These people have a higher disposable income than those employed in 1968, even where tsome are paid only a pittance relative to UK/USA earnings? You can buy a calculator that will perform all the calculations you may need, all for less than a cup of coffee, at a choke and puke café on the local by-pass, for US readers that translates as ‘Greasy spoon’ just off the freeway! But no conundrum the percentage of the workforce with permanent employment, is highest where it is easiest to sack people.

On top of all this, the Bank of England has just started a new round of Quantitative easing, which has gone down like a lead balloon, and is not the stairway to heaven Mark Carney envisaged.

Now for those who don’t know, quantitative easing is where the Central banks buys large amounts of bonds from the Pension and Insurance funds, the bonds equate to debts, and the idea is the funds then can use that, money which was previously debt and now translated into cash, to invest in buying stocks.

There is a problem, all pension funds, are required by Law to have a spread of risk, but also to maximise its returns, now the rules are by nature complicated, because in the UK when you take out a pension, you can elect how much risk you wish to take, and then each pension fund, decides how to spread that risk, and which investments it will put YOUR money into, along with its astronomical administration fees, the pension then grows, on top of the input, of monthly deposits you place into your pension pot.

Fred Karno, sorry Mr. Carney

So along comes Fred Karno, sorry Mr. Carney and the Bank of England Mark Carney SkyNews and they want to translate debt, into cash, so that the banks have money to lend to industry and commerce. They do this by buying long dated gilts, or Government debt, the famous National Debt, from the Insurance companies, Pension funds, and other large Financial organisations who invest on a large scale. Nice idea, but it has a fatal flaw, John and Jane Public aren’t saving more, so debts keep mounting. Yes it reduces the national debt and translates that money into cash, but it avoids a fundamental, of the individual and their friends and family having more capital, and this is the true driving force of increasing GDP per capita.

GDP in UK should be higher, but more to the point should be improving faster than it is. It is stuck in a rut, and it is not dissimilar in USA, and the way out of that rut, is to sacrifice consumer spending for higher savings, this may well cause a temporary recession, but the upside more than compensates for the downside.

Quantitative easing is failing, because the Bank of England, has got it wrong, and is trying to get the big investment institutions to reduce their, returns on capital employed, which in fact breaks their contracts with the people they are their to serve, namely me and thee.

graph
Shares can go up as well as down, but quantitative easing makes them rise, in a slightly false market?

There is also the fact that buying long term gilts is trying to reduce the National Debt, but also the cost of repayments of those debts, nothing wrong with that, but why not boost savings, this will reduce consumer spending, which reduces imports. This combined with increasing the wealth of individuals, because they are saving more, and enables them to invest in a friend or family member who is trying to get the ‘Super duper Gizmo company’ or what ever their idea is, off the ground.

Will Mark Carney in the coming months look to increasing interest rates, stop it, he is a safe pair of hands, plus most important it is not in his remit, that is the new Chancellor of the Exchequer, Philip Hammond, and while he may well put some emphasis on savings, this will be tinkering, because the big push in increasing interest rates will not arrive.

This Government like all the Governments since 1945, will get it wrong.

 

28th July 2016

GDP, THE NUMBERS DON’T ADD UP

DAF Trucks lined up
Industry makes the world richer through efficiency.

The trouble with Macro Economics and GDP is, the numbers don’t add up.

One of the reasons the old joke, about asking a dozen Economists a question, and you will probably get thirteen answers, rings true, is that much of what passes for fact, is no more than opinion.

Eomer, existed as an historical figure

It also doesn’t help when you get someone like Karl Marx taken seriously, when he just invented fantasy ideas with no grounding in reality. J.R.R Tolkien writing, The Lord of the Rings, has more basis in fact, at least Eomer, existed as an historical figure, and the ancients did name their swords, in the way depicted in the books. The rich getting richer as the poor get poorer is so obviously a fantasy, witness we are not poorer than our Victorian ancestors. As the rich become richer, the poor become less poor.

#Brexit, is Britain headed for the Economic Buffers?

#BrexitVote is now more than a month gone and on social media the doom mongers are having a field day, Britain is headed for the economic buffers, big style and it is all the fault of us leaving the EU. A load of codswallop of course, the latest figures include part of the time #Remain was looking to win.

Although the latest figures released yesterday show growth of 0.6% but that is really for April so nothing whatsoever to measure #Brexit effect by.

Brexit jubilation
The Revolution is here

Ireland has just shown an increase in GDP of 26%, no I haven’t missed digital marker, twenty six percent, increase, Ireland, GDP. Being a small sized economy the figures were skewed by a multi-national company, relocating its Head-Quarters to Ireland for tax purposes, it was a large aircraft leasing company, so boosted the Country’s GDP. For the overall economy, there is very little change, Ireland has not suddenly had a 26% boost in personal spending, but that’s what the figures could be interpreted as, should one wish.

GDP was ‘invented’ back in the 1940s, 1950s

This highlights a major problem, GDP was ‘invented’ back in the 1940s, 1950s to enable ‘Macro Economists’ to explain a country’s wealth to the general public, in a way that the average citizen could understand, and to a large extent it worked and still works. If a Country’s GDP per person was $20k and Joe Bluecollar was earning $15k he could see he was a tad under the average, possibly just around where he thought he was. The fact that his partner Jane Part-time, also contributed $10k to the household pot firmly placed them in the about average for their time. GDP figures are largely based on a manufacturing, agricultural economy.

In 1964, four lads from Liverpool were awarded MBE’s for their services to industry, some people became really upset, that the Beatles had received these awards, they had only sung a few tunes and shaken their mop heads, with hair which was far too long? In point of fact they were tapping into an expanding way of making do$h, by manufacturing songs and earning overseas currency, it is called copyright.

Beatles Abbey Road Cover
Four lads from Liverpool, who wrote some fab tunes, many of which topped the hit parade.

I use the term manufacturing deliberately, there is a myth, that manufacturing requires metal bashing or such like, well it is just that, a myth, song writing, film making, computer programming are all manufacturing, that novel didn’t write itself, someone sat down and ‘manufactured’ it. Plus these products often last longer, I’ll lay money you heard a Beatles tune more recently than you saw a 1960s British built car tootling down the road, or watched a pre 1980s film more recently than you rode in a pre 1980s bus or coach?

Here lies part of the problem, while counting vinyl record sales was always fairly easy, counting the digital economy is not, also double counting has always been a fly in the ointment. But there is a much more problematic and fundamental point, that GDP misses quality and relative wealth. This covers health, always a difficult economic metric to measure, but likewise excellence of goods. The British cars previously mentioned regularly broke down, as did all the other makes at that time, quite why the VW Beetle was thought to be reliable, when it was patently unreliable, beggars belief. These days some Honda Cars have a 99.8% reliability standard, plus consider all the extra bells and whistles now included, should lower any percentage figure. yet they remain higher than ever, none of this is measured in GDP.

no air con, the last was provided by a sun roof?

It also causes an economic problem when measuring ordinary growth, the car I have recently bought is averaging 46mpg, it is a 1.6 litre engine, my first car was a Triumph Herald, with a 1.2 litre engine that I was happy to get 32mpg from, and no power steering, no central locking, no electric windows, no air con, the last was provided by a sun roof? GDP attempts to measure efficiency, it falls short.

Part of the problem arises from the human capacity for original thinking, Herman Hauser was on the TV the other dayARM Takeover over the sale of ARM, the chip design giant. Herman was one of the originators of the BBC Micro, which was about 1/3 the size of the IBM PC at the time, but the BBC micro was a lot larger than the Sinclair Spectrum. Efficiency at work while you were watching, also worth noting was, the Sinclair Spectrum plus, used a rubber keypad that is the basis for most full sized keyboards today. Here is just one thing GDP measures, both accurately and inaccurately, number of keyboards, but only in monetary value, not worth to the customer, or reliability.

We are however stuck with this metric, and until some other can be agreed, it will remain.
Meanwhile UK is heading, for the Economic doldrums, and UK’s GDP will suffer, but is it because of #Brexit view, well here comes a good Economists answer, yes and no?

Germany dominates

What the EU Ministers are keeping quiet about, is the fact the whole of EU is also heading for a downturn, so why should UK be so much different,#Brexit or #Remain. What they are keeping shtum over, is UK as likely as not, will emerge, quicker, and more robustly, simply because Sterling will react to the Government’s, twists and turns more accurately than the Euro does to individual Countries, within the zone. Germany dominates, so it is useless any smaller economy trying to buck the trend in any meaningful manner, except by efficiencies, and that’s the point. However countries like Greece, that are locked into political dogma that stifles flexibility, are basically stuffed.

UK is set fair, already the Government is keeping the tiller steering for calmer waters, yes there are a few people in UKIP shouting for Article 50 to be triggered immediately, but clearer heads are saying let’s work with our neighbours. The main people upset over all this are Jean Claude Juncker, and the French President Hollande, Juncker should be ignored, and Hollande placated, until he is thrown out of office, in May next year.

Drake playing a game of bowls
SIr Francis Drake famously waiting for the tide, before going off and earning a bob or two privateering, and then going and defeating the Spanish Armada.

Britain meanwhile will weather any storm of leaving the Port of EU, by doing what Drake did, and waiting for the tide, in the meantime, exporters should carry on benefiting from the ten percent reduction in sterling. Savvy importers should look how to reduce their costs, or look to reducing the amount of value they import and where possible look to adding value, within UK, and thus also benefiting from a lower £. Easier said than done, but I did come across someone who had not even given it any consideration?

GDP could go down because of the lower value of sterling, but many in UK could still be better off financially, courtesy of higher inflation reducing the true cost of borrowing. No the figures don’t add up, well they do, but again another good economists answer.