Do we need a UK Financial Implosion thread?

[Frumious B.]

There's a lot of doom-mongering going on.

Money Week magazine is predicting the sort of economic collapse you get in a banana republic. It's a marketing gimmick to sell subscriptions, but some people are saying there's a bit of truth in it. (A Brixton pound geezer has told me that paper banknotes will soon cease to be of any use. He's probably been reading this http://www.amazon.co.uk/Paper-Money-Collapse-Monetary-Breakdown/dp/1118095758)

Then there's Max Keiser. He does have a TV show to plug and is given to hyperbole, but he's been right about so many things. This is what he told the Independent in November:

"I came to London," he says, "because being here gives you a front-row seat on the imminent collapse of an entire city. I think that the Eurozone is over-rated as a disaster area. They are not yet in as bad shape as Britain. The UK pound," he continues, "is about to collapse. And the collapse of the British economy will be one of the biggest in modern economic history. Of course you will take the American dollar and the euro down with you, for sure. But this place – London – is about to go belly up. It's … how can I put this?" Keiser pauses. "If you see me walking the streets of your town," he adds, "then you're probably fucked."

From www.independent.co.uk/news/world/americas/max-keiser-barack-obama-is-clueless-mitt-romney-will-bankrupt-the-country-8269633.html?origin=internalSearch

The MoneyWeek forecast is v long-winded. www.moneyweek.com/endofbritain The short version is that interest rates will get back to normal, say 5%. This will render all the banks insolvent, because (I think) they have lent vast sums to the government at much lower fixed rates. There will be a run on the banks, the housing market will collapse, the government will have to do something drastic like cancel the state pension or sell the NHS, social order will break down.

Today's budget isn't comforting. Osborne sneaked through a huge increase in government borrowing, while spouting about shrinking the deficit. http://www.telegraph.co.uk/finance/...Osborne-buried-the-bad-news-on-borrowing.html

 

[butchersapron]

What has max Keiser been right on?

 

[Nylock]

I suppose if the government really wanted to accelerate the arrival of the day when they are violently overthrown, i reckon they couldn't do better than cancelling the state pension and selling off the NHS... There are too many people with too great a stake in either to allow that to happen without a proper fight over it (i.e. a bloody one) and the government know that*


(*well, ought to at least...)

 

[Frumious B.]

Peter Oborne has spoken. His comment on the budget:

The ugly truth is that there appears to be no political solution to the calamity facing us all.

Mr Osborne has made no attempt to reduce the Brown debt mountain. In fact, the national debt has grown far faster. According to yesterday’s figures, it is scheduled to stand at approximately £1,400 billion in 2015, up from the £800 billion inherited from Labour in 2010 – a rise of £600 billion in just five years, or the equivalent of roughly £25,000 for every household in the country....This failure of Tory economics will probably give Labour yet another chance. But there is no hope at all... that the Opposition has the faintest idea how to confront the economic crisis.

Yesterday’s Budget papers disclosed that, well before the end of this parliament, British national debt (judged by the Maastricht criteria, and so free of the tricks Mr Osborne is starting to use to hide its scale) will rise above 100 per cent of economic output. Yields on government bonds are starting to rise. Yet the Chancellor’s only answer is to print money and enlist inflation as an ally.

Alexis de Tocqueville remarked that: “The American Republic will endure until the day Congress discovers it can bribe the public with the public’s money.” This observation is just as true of British representative democracy.

The Coalition, brought together to confront the national economic emergency, has failed in its mission. So we are entering a momentous period in our national life: if the politicians cannot address the problem – and they can’t – who will?

From http://www.telegraph.co.uk/finance/...-but-the-Tories-are-only-making-it-worse.html

I predict chaos and riots. Like Greece, but worse.

 

[ExtraRefined]

There are parts of that Moneyweek article which are true, and parts which are original, but the parts which are original are not true, and the parts which are true are not original. You're correct to identify it as marketing.

http://coppolacomment.blogspot.co.uk/2013/01/the-end-of-britain-not-yet.html

All those graphs denominated in absolute rather than real terms are particularly annoying.

 

[kabbes]

To pick one small example from what has actually been quoted: why on earth would interest rates revert to 5% any time soon? You raise interest rates when you need to control demand-push inflation. The economy has no demand in it -- quite the reverse -- so there is no incentive to raise them.

Japan has had virtually zero interest rates for how long now? I can't even remember. Decades. There is no "natural" need to have a 5% interest rate.

 

[SpookyFrank]

To pick one small example from what has actually been quoted: why on earth would interest rates revert to 5% any time soon? You raise interest rates when you need to control demand-push inflation. The economy has no demand in it -- quite the reverse -- so there is no incentive to raise them.

Japan has had virtually zero interest rates for how long now? I can't even remember. Decades. There is no "natural" need to have a 5% interest rate.

Even I know that. Perhaps I should start my own economics journal.

 

[Frumious B.]

Well, it's pretty easy to frighten an ignoramus like me with talk of a 'normal' interest rate. But even if I had a spare £175 I still wouldn't buy a sub to Money Week.

I am still alarmed by Peter Oborne's talk of a 'calamity'. He's one of my favourite journalists.

 

[Roadkill]

Oborne is a deeply unoriginal right-wing Tory, of the kind who's been wrong at every turn in the last few years. His predictions of economic collapse are about as persuasive as a speech by George Osborne.

 

[Frumious B.]

He seduced me with all the stuff he said about Iraq and America. But I realise he really wants massive cuts in welfare. Which worries me because I live on welfare and I worry that the country can't afford it.

 

[junglevip]

What has max Keiser been right on?

It is too easy to criticize. Could you please tell us from your own understanding something that he has been proven wrong on. Thank you.

 

[butchersapron]

The collapse of the british pound in novemeber 2011. The collapse of goldman-sachs if silver reached a certain price which it did and they didn't. Two quick examples from 20 seconds googling (and whilst ignoring his predictions of false flag attacks and the other nuttiness in fact there seem to be a huge list of wrong predictions). And whilst it may be easy to criticise you'll have spotted that i didn't. I don't watch his performances so don't know what he says, or what he predicts - it was suggested that he has " been right about so many things" so is worth paying attention to. I was wondering what they were - are you able to help?

 

[Frumious B.]

I haven't kept track of his predictions. But I agree with so much of what he says in that Indy interview. And I don't know of other people with real experience of working in the financial markets who say those things. So I find him plausible and convincing. But I don't understand economics, and maybe he's really just a comedian.

 

[kabbes]

Well, Britain is basically no more fucked than anybody else. Which is to say that it is a bit fucked, because capitalism is ultimately going to fail in a post-growth world and the poor will get the brunt of it, but that's true for everyone.

 

[junglevip]

The collapse of the british pound in novemeber 2011. The collapse of goldman-sachs if silver reached a certain price which it did and they didn't. Two quick examples from 20 seconds googling (and whilst ignoring his predictions of false flag attacks and the other nuttiness in fact there seem to be a huge list of wrong predictions). And whilst it may be easy to criticise you'll have spotted that i didn't. I don't watch his performances so don't know what he says, or what he predicts - it was suggested that he has " been right about so many things" so is worth paying attention to. I was wondering what they were - are you able to help?

Twenty seconds of googling is the level of analysis I'd come to expect from you. Bullshiting is even easier than criticizing

 

[butchersapron]

Twenty seconds of googling is the level of analysis I'd come to expect from you. Bullshiting is even easier than criticizing

So, you can't come up with anything? There must be something?

 

[junglevip]

Gold and silver are the best performing assets for the last 12 years

 

[Fez909]

Who cares about gold/silver price. Their value is as 'real' as any fiat currency.

If the economy truly collapsed and we were in survival mode, what use is a few ingots of gold gonna do you?

 

[butchersapron]

Gold and silver are the best performing assets for the last 12 years

That's what you have come up with in order to support the idea that Max Keiser should be used as a trusted source of info on the state of the UK or global economy?

 

[junglevip]

That's what you have come up with in order to support the idea that Max Keiser should be used as a trusted source of info on the state of the UK or global economy?

Dont be silly.

 

[junglevip]

Who cares about gold/silver price. Their value is as 'real' as any fiat currency.

If the economy truly collapsed and we were in survival mode, what use is a few ingots of gold gonna do you?

This is not true.

 

[butchersapron]

For someone moaning about level of analysis you're doing a mighty fine job here.

 

[junglevip]

For someone moaning about level of analysis you're doing a mighty fine job here.

Flattery will get you nowhere

 

[Fuchs66]

I've had the feeling that the UK is going to implode for some time now. An economy centred around London and the finance industry with no Plan B if things go tits up.

I also think that this process towards implosion is one of the reasons why the UK is so fiercely against more control of the financial sector by the EU, there are people afraid that someone might peek behind the curtain and see that the Wizard isn't so great after all.

This is all gut feeling but my guts are the most reliable part of my body

 

[junglevip]

I've had the feeling that the UK is going to implode for some time now. An economy centred around London and the finance industry with no Plan B if things go tits up.

I also think that this process towards implosion is one of the reasons why the UK is so fiercely against more control of the financial sector by the EU, there are people afraid that someone might peek behind the curtain and see that the Wizard isn't so great after all.

This is all gut feeling but my guts are the most reliable part of my body

Your not the only one:

Second UK credit downgrade looms as Fitch ratings agency puts AAA on watch

http://www.guardian.co.uk/politics/2013/mar/23/second-uk-credit-downgrade-looms

Britain's credit rating faces another downgrade in the next month after Fitch warned it is reviewing the country's "AAA" status in the wake of the Budget

http://www.telegraph.co.uk/finance/economics/9949126/UK-faces-Fitch-downgrade-over-debt-levels.html

 

[butchersapron]

Which doesn't mean or say that the UK is going to implode. It' actually an indicator of investor confidence in continued stability.

 

[junglevip]

Which doesn't mean or say that the UK is going to implode. It' actually an indicator of investor confidence in continued stability.

Thank you, George Osborne has spoken

 

[junglevip]

Which doesn't mean or say that the UK is going to implode. It' actually an indicator of investor confidence in continued stability.

So your saying that is a good sign then... .. . I am genuinely interested

 

[Belushi]

Thank you, George Osborne has spoken

What do you believe the reports you've linked to are saying?

 

[junglevip]

What do you believe the reports you've linked to are saying?

That the credit rating is being downgraded because of poor projections for the uk economy. Yourself?