Government Size Nines and Runaway Inflation.

I did blog a few years back that thanks to quantative easing that when the recovery came, we'd be staring at runaway inflation. Well, it looks like my fears are now gaining traction in the mainstream and that with even a slight (hundredths of a percent) improvement in the economy, the debate instantly flips to keeping a lid on inflation.

Well sorry, it won't happen. You can't keep a lid on natural forces. You pump funny money into the economy, you reap the rewards. Its a money bubble created by pumping money that wouldn't normally exists into the economy.

Just as the government is pumping money into the housing market and thereby inflating house prices (especially in London).

I blogged early on in the credit crunch that house prices were inflated by as much as 30% over what they should be in a normal market (way more in London). Cheap loans pushed the price up way beyond a sustainable level. House prices should be no more than three times the average wage at any state of the economy, but thanks to downward pressure on wages and cheap loans house prices are now running around 5-6 times the average wage. Its unsustainable and cannot be justified.

Of course Labour loved it because while they were surfing the cheap credit wave people felt as though they were more affluent than they actually were. I mean, how affluent are you if you have an asset that no-one can buy?

The mortage deposit scheme where the government guarantee part of the deposit on a house (any house, including second homes) is just stoking an already inflated fire. But that's what happens when the government put their size nines into anything: it just causes more trouble.

The course is set in only one direction now: the government are going to use inflation is a tool to reduce the effective level of debt. The bad news is that inflation has a way of avoiding control as countless governments in the past have found out. It also means that effective wage levels will reduce even further compared to day-to-day costs.

Those in the retail sector (like me) are going to find the next decade extremely tough as personal spending gets squeezed by rapidly increasing mortage costs, increased energy costs and lower effective wages. Start hunting for those niches people, because to survive you'll need one.

Those not able to adapt to the changing conditions will not survive. Those of you that took my advice from two years ago and reduced your personal debt will have a better chance of survival as you will not have the extra burden of increased lending costs on top of the rest of the misery we're facing.

Sad to say I was right years ago.

What's Up With Education.

There was a bit of a debate on education last week and why the UK has slipped down the global table.

Its easy to see the reason: decades of Political dogma have hamstrung the education system to virtual paralysis. Teachers are not allowed to teach with any element of flair. As with all walks of life these days there is too much control and measuring and not enough actual doing of the task. In this case education. The same malaise has stricken the NHS where meeting targets is promoted above actual results.

Kids are taught to pass tests and not educated. There is a difference.

Teachers are supposed to teach all kids across the spectum, regardless of their ability.

Schools are required to take all comers, regardless of ability, regardless of disruptive behaviour, basically without any regard to the job in hand.

Education needs to get back to basics and an element of common sense needs to be involved.

First off, what was the problem with streaming? Some people may have a hang-up about failing the 11-plus but I never did. I still got to run my own company and work as a highly-paid contractor and manager without the supposed privilege of Grammar School. Sure the Secondary Modern I went to was grossly underfunded, but I was still educated by a highly motivated team of teachers. I maintain to this day that primary school was the biggest influence on whether I succeeded or not.

Teachers need to be motivated. They need to be in their comfort zones in order to teach enthusiastically and its the enthusiasm that rubs off on kids.

So scrap this one-size-fits -all dogma. Lets bring back streaming. Lets have the bright kids taught by teachers that enjoy teaching bright kids. Those that thrive and enjoy the challenging kids should stay in their comfort zones too. Why not have specialists? Or is the word Special-ist too elite-ist for the lefties?

Its time the dogma was put down. Education should be above all of that.

Give them an Inch and They Want to Take a Mile...

Safety campaigners are no saying they want hands-free mobile phones banned.

Its pretty typical of safety campaigners, they like spoilt children: give in to one thing to appease them and they want more.

They say you're more likely to have an accident if you eat, drink or smoke in a car. Well talking hands free is just like having a passenger in the car . Will they want them banned too? Forget that, they will, because they've already wanted passengers banned from the cars of new young drivers.

Those of us that have driven a car full of kids (the worst kind of driving distraction known to mankind) will just laugh in the face of all this nannying. We know what REAL driving distractions are.