Thursday, May 10, 2007
This deserves more coverage...
BBC: Rising balance of payments deficit
Balance of payments imbalances are a harbinger of trouble ahead. The notion that somehow it doesn't really matter because hell doesn't freeze over tomorrow is entirely misplaced.
To cure the problem, our currency has to fall against other currencies - and by a lot. Imports, including commodities like oil, will become much more expensive, and this will put immense pressure on inflation and interest rates.
Those who might be losing faith in the reality of an HPC take heart - this going to upset the applecart...
Posted by uncle tom @ 04:44 PM (137 views) Add Comment
5 Comments
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1. talking rot said...
Sage words from Uncle Tom.
Alas, I have no faith left to loose.
2. enuii said...
Manufacturing in this country has already virtually bottomed out as everything that can realistically be shipped abroad already has. March is also the end of the tax year when books are balanced and most bills settled so expect Aprils figures to be much worse for both manufacturing and the balance of payments/trades deficit.
3. Andyh said...
Oil imports will eventually kill the UK economy; until 2006 the UK was a net oil exporter which saved the balance of payments figure from being far, far worse in the previous 20 years. However 2006 was the year the UK became once more an oil importer. The DTI and government have made idiotic claims that this would not happen till 2010, yet a brief trip to the DTI webpages shows the collapse in the UKs oil production figures. The Buzzard field, which came on line in January, has provided some temporary (and I mean temporary) relief but rapid depletion in other fields means that within 6 months by my reckoning things will be turning down again; 2007 will be again a net importer year, and 2008 will be far worse. By 2010 the figures for oil imports will be eye watering - and dont forget the effect will be doubled; what was once a plus on the trade side (oil exports) has become a rapidly expanding negative. I am stunned the problem is not being debated at length in the UK. You will see trade deficits blossom to almost inconceivable levels - you can imagine the impact on the pound, interest rates etc. This really is THE coming story. If anyone is interested I will dig up the detailed figures etc which I researched some time ago. I tried to interest fools like Smith at the ST a few years ago when I lived in the UK but no reaction.........
4. Scott said...
I think we should all support Gordon Brown. It is not his fault that everybody wants to buy property that has caused a boom. The inevitable bust is also beyond his control. In case people do not realize, the MPC are not Gods of Olympus setting the stage for their own amusement. The MPC are controlled by events, not vice versa. The crash will happen due to economic circumstances and external events, not some stupid monthly votes that make £16 per month extra difference. But Gordon will take responsibility for it. What I have learned from the "This is England" film is that losers of every generation blame the government.
5. dohousescrashinthewoods said...
TR, take teart, this one isn't about faith, so you don't need to have any left.
Once every player, commentator and VI is exhausted, it will come as night follows day.
It is historically cyclical and we are well into the cycle, so the odds on being right, faith or no faith, are increasing by the day.
Hope that helps.