Gordon's guilt over gilts

(and Dan Hannan for shadow chancellor!)

http://www.youtube.com/watch?v=94lW6Y4tBXs&fmt=18

Watch this and weep!

Why is it that Osborne cannot land a punch, whereas Dan Hannan, in a mainstream-media-unreported speech, manages to floor the Big Fat Oaf and, as of this morning, get over 1/4m hits on his YouTube video?

The Tory front bench knows full well the seriousness of the situation:

The damage The Project has done to the UK is horrifying. We have had a decade of systematic and ruthlessly ideological mismanagement, resulting in councils with millions of pounds of 'spare' cash to put into Icelandic scams, and 30,000 new public sector 'jobs' invented last year alone.


State interference in everyday life is more intense than it's ever been before, with incredible powers given to councils and even TV licence investigators. Emigration of the entrepreneurial class (capital flight, if you dare call it that) is at its highest for decades, and the country is being robbed of its brightest and best whilst the debts mount, and the government pretends it has a clue.

Well, there's no point flogging the taxation ass now to pay for it all, Gordy, it's dead on its feet!

Obviously (and it really is very obvious), Darling-Brown's 'solution' is
expensive nonsense, as they, and sadly we too, are about to find out. The breaking news today about treasury gilts being rejected** may be the first cry of "But the emperor isn't wearing anything!"

Brown shouldn't be away, annoying the polite and efficient Brazilians (who have a real, working economy). True it's a nice place, but somebody should remind him that the last notable Briton who went on a protracted visit to Brazil was Ronnie Biggs! Unless he has an altogether different, personal plan he's not telling us about, Brown's place is back here, facing the music, sacking Darling and putting someone competent into the post.

"Yoo-hoo, Gordy! Over here! There's something dark and very nasty oozing out of No. 11's front door!"

Yes, I know he doesn't have anyone half-competent to appoint, but he should still be treating today's news with the sheer terror it ought to engender (and showing proper remorse, but Dan Hannan has already covered that).

There is no law that says, by some divine right, the UK can never have its economy collapse. If the Treasury doesn't stop the state spending nonsense now, and start giving direct and effective help to the private sector, UK plc will indeed go under.

Forget banks and mortgages: businesses are closing at the rate of 55 PER DAY.*

In this context, should the populace want to string up Fred-the-Shred, it could be seen as merely cathartic entertainment. Brown ought to welcome the distraction. Perhaps we should have a springtime 'Burn-a-banker-night' to balance the autumnal celebration of Guy Fawkes' demise.

Yet I digress. I'm just a minuscule cog in the great machine of the socialist state these days, and my opinion is next-to worthless. Surely it's the job of Her Majesty's Loyal Opposition to call Fascist twerps like Darling and Brown to account? The damage is real, serious and plain to see, so how hard can it be?

Too hard, it seems, for Osborne's lot.

Despite a league full of open goals, or whatever metaphor you like, they can't even agree amongst themselves, let alone deflate the other front bench with a pointy stick.

It's as if they're all hiding in a ditch in case something shiny gets dented or starts squeaking.

"Gentlemen, get out there and hit them into the middle
of next week. Do it for for Britain!"

There are alternative strategies out there, and they would work!

How about, for example, getting funds to people who will use the money, rather than squander it—the self-employed. Instead of giving it to bankers, how about a tax holiday for everyone earning less than £25,000 p.a. or just killing the business rate for small firms?

Short-term measures should be directed towards getting liquidity into the bottom-end of the enterprise economy, where it will do the most real good. Put what little resources we have in the hands of people who will use and spend it locally and carefully! Let Sir Fred's pension become worthless, while those from whom he has taken it get the help they need! Even if, as might be expected, the propensity to save goes up, the money will go back into British banks, not Icelandic ones! It's not "soft" socialism, it's common sense, and it would work.

I know, we mustn't be protectionist about this, must we? But that's really nonsense in the current situation. One of the things characterizing Labour that has really damaged the economy is simply not being protectionist enough. I note the unions are now at last waking up to this, but it's almost too late: We don't need imported labour when we can't afford our unemployment bill. We don't need imported goods when our own skilled trades and craftsmen can't make things for us because taxation and EU regulation costs are too high.

Now is the moment to call attention to the structural problems in the economy. Now is the moment to offer real, workable, sensible and relatively cheap solutions. Now is the time to take the high ground, and drive Labour into the ditch it rightfully belongs in.

If Osborne and fatty can't strike those blows clearly and effectively, they should get out of the way and make room for people like Hannan, who obviously hefts a mean broadsword to great effect.

Hannan's armour may well squeak, but if it does so, it's for the very best reasons.

---

*Government Insolvency Service number for the most recent quarter (cal.
4/08). It only includes the ones that tie up the loose ends tidily,
rather than just vanish, and the rate of increase is almost exponential
presently. Thus the real figure is probably far worse.

**http://www.telegraph.co.uk/finance/financetopics/recession/5051738/Ci
ty-alarm-as-Treasury-fails-to-sell-Government-gilts.html

***Dan H's comment about this speech is on his blog: http://blogs.telegraph.co.uk/daniel_hannan/blog/2009/03/24/so_i_said_to_gordon_brown_i_said

A 21st Century Trojan Horse?

Could the Greek Economy end the great Euro siege?

Ambrose Evans-Prichard has a telling factual piece in today's Telegraph. Standard & Poor's list has downgraded the credit-worthiness of Greece (yup, that's the entire nation), because of its soaring public debt.

Greece in its turn is having to use the public finance equivalent of loan sharks to keep the lights on and (presumably) the Ouzo flowing. Its latest bond issues are 234 basis points higher than the equivalent German ones.

What does this mean? A 'basis point' is 1/100th of 1%. So, on new debt, Greece will eventually have to repay at an interest rate 2.34% higher than Germany. If Greece had its own currency still, that would mean its Drachma interest rate would be close to 2x that of Germany's (which, I understand, was paying 3.2% on 10-year bonds, earlier this week).

I'm not defending the British 'government' approach to this (see below), but one small saving grace is that, if we had to do the same in our own currency, inflation could operate to reduce the ten-year redemption cost to manageable proportions.

But Greece is in the Eurozone and thus it doesn't have this option. If its debt is bought by other Euro countries it is stuffed. It's true that inflation will reduce the impact overall, but the piper will still have to be paid.

You can, to an extent, understand German frustrations: their innate prudence means their public debt is negligible in comparison, and it's hard to see why, morally, they should put up with high inflation and interest rates just to pay off Greek profligacy. You'd forgive them, therefore, if they started lighting fiscal fires beneath the underbelly of the Greek 'horse', with a view to forcing a confrontation.

On this occasion, nobody, least of all the Greeks, is managing to fool anybody.

It is very hard indeed to imagine the Euro zone surviving such stresses. Either it will break apart, with the worst affected economies (such as Greece) returning to de-facto local currencies, or some form of EU economic straitjacket will be centrally imposed (Amsterdam and subsequent treaties allow for this).

In the article cited above, Evans-Prichard comments that this is unlikely, given the recent Greek riots, but common sense has never prevented EU bureaucrats in the past, and, viewed from the gravy-marshalling-yards of Brussels, Greece is a far away country about which they evidently know little, and care even less.

Standard and Poors is reported as commenting that Greek debt will exceed 100% of GDP in two years' time. This isn't a magic number per se, it simply means that, to balance the books, the Greek population would have to work for an entire year to pay off their public debt alone. Their credit cards, mortgages, etc. are not included in the figure.

Is Britain in a similar pickle to Greece?

In short, probably yes. So much has been pledged by Broon and Sweetie to their new 'friends' in the city it's hard to say exactly what we owe.

In Summer 08 I 'guesstimated' our public debt at £2.76tn*. This included the second tranche of Northern Rock theft but not subsequent robberies of the public purse by the banks, in which Sweetie was a willing accomplice ('Stockholm syndrome?').

Compared to the hapless Greeks however, we have one card left: Sterling. If much of our debt is held abroad (which historically it has been), and we enter a period of high inflation (which we surely will, soon), our debt becomes effectively worthless.

This, of course, presupposes we stay out of the euro, and that our economy is already wrecked, such that stagflation doesn't matter. The siren voices are already sounding on the former issue - BBC Radio 4 is in full euro-propaganda mode already with the Today and You and Yours programmes brashly on-song. This commentator expects Newsnight et al to follow suit over the next few days. The arguments for the euro are, of course, just as facile as ever they were, more so in a depression, but that doesn't stop the fanatics.

What about our public debt though? So much is being stolen now from taxpayers in the UK (and just given away) that it's hard to keep track. On the BBC Newsnight programme last night (12'45" in) , Peter Mandlesohn, himself no stranger to financial "leger-de-main," grinned maniacally and pointedly refused to say where it would all stop.

So how much more of our money is his government prepared to thieve away to the banks?

The clear implication is "lots."