Saturday, 27 June 2009

The end of Triple A

Currently the UK is rated "Triple AAA" for its debt worthyness. I can't see that being the case in September.

If you wonder why, its because there's a battle about to start.

Parliament (and by that I mean Labour, Conservative and Lib-Dems) are all working to the same end: propping up the status quo until Ireland votes yes on the Lisbon Treaty in October, thereby denying UK voters any chance of a referendum of their own.

On the other hand, theres an array of speculators ready to cause mayhem, because mayhem in the money markets means earning lots of money for the savvy investor.

The run on the Pound during John Major's government (Black Wednesday) which caused us to drop out of the ERM was manufactured by speculators that saw a weak currency pegged to an artificial, politically-motivated target and knew that the government would throw billions into the money markets in an attempt to prop the pound up.

Its possible the same trap is about to be sprung now. The government have set an artificial political target and are currently borrowing tens of billions a month in order to maintain it. All it will take is a few sales of Sterling here, a few calls there, a guilt auction failure and we'll lose our triple-A rating and the value of the pound will plummet. The added bonus as far as the money-men is concerned that such a run on the pound could trigger a general election which will see the Conservatives in power.

When better to spring the trap than when the government thinks its in the bag and gets complacent? Sometime mid-late in September would be my guess. Although I'd relish a run on the pound on the anniversary of Black Wednesday. It would send such a strong message.

Anyway, get the popcorn in for early Autumn.

I thought I'd add this bit:

Yes, I know, yet another hint from me of an early election. I know I called it for the summer, but the spineless bastards in government let me down. You don't want to know how close Gordon Brown really came to losing his job, because it will make you cry. Government ministers like Hazel Blears don't quit their jobs and criticise the PM unless they're sure of their position. In the end lack of a spine and promises of EU and upper house positions for the key players won a reprieve for Gordo. Literally with minutes to go before the plot to get rid of him was about to be hatched. Bastards.

Thursday, 25 June 2009

Challenge to the Nazi Health Service.

I blogged a while ago about Southampton Health Authority authorising the flouridation of the local tapwater, despite the majority of residents in the area being against.

Well, someone has instigated a judicial review against the decision. I hope they win.

I've blogged about the Police being too keen to see themselves as judge and jury, this is another example of public services attempting to run our lives, rather than serving them: The hint is in the phrase "Public Service"... i.e. Service: "to serve" Public: "us, the citizenry".

Its about bloody time everyone in public service from the PM down understood the phrase, or maybe we need to bloody kick it into them?

Public Sector Borrowing: A Tightrope Walk Without a Net?

Earlier, I blogged about the huge Public Sector Borrowing policy Gordon Brown and his glove-puppet chancellor Alasdair Darling are committed to.

We all know that UK borrows money from investors by the the purchase of guilts. But what happens if the purchase of UK guilts dries up? Earlier this year, a UK guilt issue failed: not enough people decided to fund our debt.

Now, what happens if the UK guilt market fails completely? What if in 6 months (and £120 billion) time, our government is still spending more than it earns and our global sponsors refuse to fund any more?

The first thing would be a huge crash in the value of Sterling. Quantative easing is already putting a downward pressure on the pound, but a guilt market failure would put it into freefall.

Second, the government would have to dramatically cut public spending. Remember, it is spending £20 Billion a month more than it receives from taxes, etc. So thats a £20 Billion a month spending cut right away.

Public Spending is so entrenched in the economy, from public-sponsored call centres, to tax credits and Jobseekers, that the removal of a large swathe of it would decimate the UK economy. Just think if tax credits were suspended, if NHS direct and other call centres closed, if grants to local government were suspended....

The whole country will become paralysed. People won't be able to afford rents or mortgages, millions will be thrown into poverty, retail activity will collapse as people start to prioritise on things like food and heating, local government will collapse as council tax goes unpaid, national government will lose tax revenues as vast numbers of people lose their jobs and whole sectors of the economy go into the cash-in-hand, or bartering "underground" economy.

In short, UK PLC will grind to a halt. Overnight we become a 3rd world economy. It doesn't bear thinking about.

What will happen to the EU if one of their major contributing countries goes belly up? Would they kick us out, help us, or make a bid to subsume us? What happens to world finance markets under the same circumstances?

Nor does thinking about what our creditors might do if we go bankrupt. We owe Russia, China, and the Middle East huge sums of money. Hardly understanding regimes any of them. Will they help us, or demand their pound of flesh? Will China demand our mineral reserves? Will Russia cut off our gas supply, or demand we allow the Eastern Bloc seperate from NATO? Will the Middle East demand a bigger Muslim influence on government, or repayment in the form of advanced armaments?

Have no doubt, this is the risky course that our government has set us upon. It has millions here and across the globe crossing their fingers and hoping to hell that someone, somewhere in the world will continue to buy into funding the increasing UK debt burden whilst our profligate government continues to fritter money away wontonly.

Would you continue to fund a spendaholic?


Via the excellent blogsite Burning Our Money, I've found the Debt Bombshell website, which goes into much detail about our unsustainable national debt. However, the details of a guilt market failure are scant. Don't misunderestimate such a failure: it will be catastrophic. It won't be 1976 and the IMF all over again, it'll be far worse. The state is far more entrenched in society than the seventies. We've had a decade of centrist policy-making that involves the state in everything. To extract the tentacles of public finance from the economy would risk the collapse of society. Far worse than the tough early 80's. We would see unemployment on a vast scale, poverty on a vast scale, inflation on a vast scale and a collapse of public services that would catapult us into third world status.

Tuesday, 23 June 2009

Traitorous Intent from The Political Elite.

John Bercow was installed as Speaker of the House of Commons last night. All I'll say on that subject is it was entirely expected, as it was reported weeks ago he was the front runner. For all kinds of reasons, he is the wrong person to be in the job.

I've already blogged about what I believe Mandleson's plan for the country is. Ian Parker-Joseph of the Libertarian Party has put more flesh on the bones of what he thinks is a parliamentary plot to ensure our complete dominance by the EU. I'm not a member of the Party, nor interested in becoming such, but its an interesting post that dovetails with my observations and shows how the whole of Parliament is working for itself, not for us, the people of the UK. Voting Tory or for any of the major parties won't change the plan the elite have for us.

The more I see, the more I become convinced that the ordinary people of this country need to become organised against the political elite. Organised enough to decimate the current Parliament and install independant MPs in the majority of seats. Organised enough to make the UK independant from the EU if necessary.

Just what happens then is anyone's guess. Would the megalomaniacal masters of the EU allow it? Or would they attempt to prevent us leaving the EU by force? Would we see thousands of French, German and Eastern Bloc paratroops dropping from the sky the day after we announced the severance of our ties, the blockade of our ports by EU ships? Reading the contents of the Lisbon treaty, I do wonder if thats what we face.

Hardly the trading block the people of the UK originally voted to enter back in the seventies.

Sunday, 21 June 2009

Public Sector Borrowing Hits Record Highs.

The BBC reports Public Sector Borrowing for May hit a new high: £19.9 Billion Pounds. Since the start of the financial year, the total is £30 billion. So, as the financial year starts in April, we borrowed £10.1 billion in April.

If the election doesn't happen until May and if borrowing stays at £20 Billion a month until then, thats another £240 Billion added to the national debt.

This is a truly staggering amount of debt to rack up and a truly staggering amount of monthly spend, for no discernible benefit. Thats of course if we can find people to fund it. I have my thoughts on that already, but I'll keep quiet on the subject for now.

The thing to ask is what is all that money going on? If there's such a huge imbalance in the budget, why aren't we trimming fat in order to reduce costs? Why would the government continue on such a suicidal and costly (in the long term) policy?

More and more I become suspicious of this government's intentions.

The simple answer is that Labour think that continuing public spending at current levels, they will keep core labour voters (voters who will be getting tax credits, child benefit and Jobseekers Allowance and voters employed in government-funded call centres, quangos and faux charities).
Labour are spending billions they haven't got (billions you and I and our children will have to repay), in an attempt to buy the result of the next election.

Such behaviour is reprehensible and undemocratic. It should be stopped immediately.