Friday, Mar 13, 2009
Will Britain go bankrupt?
MoneyWeek: Will Britain go bankrupt?
"Having been sellers of gilts for 10 years, British banks have bought a net £30bn-worth in the last three months – the most since data started in 1997. While there's still some cash left in the banks' vaults, expect the government to grab what it can.
It all means that sterling assets – from houses to conventional gilts to stocks exposed mainly to the domestic economy will keep crumbling."
Posted by damien @ 03:24 PM (1413 views) Add Comment
15 Comments
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1. sold 2 rent 1 said...
"Add it all together, and Britain's total debt mountain will stand at over 500% of GDP by 2010. To put this figure in context, it's far bigger than at any point in our history, including wartime. And this is our fiscal position as we go into possibly the biggest recession in living memory. It's like owing more than five times your gross income - just before you lose your job."
Roll on 16 April 2010, I say.
2. mark said...
YES!
3. japanese uncle said...
s2r
'in living memory' should read 'in living as well as dead memory'
4. Maddison said...
Slight difference is the debt is secured against assets unlike in wartime when it was used to manufacture arms and feed the population!
5. Saywhat said...
Wow... well only 12 more days left here in the UK and I'm out of here back to my home country... I feel sorry for the folks of the UK, it going to be a tough and hard adjustment but at some point the music had to stop playing and it looks like the UK been caught out with not having a seat...
6. sold 2 rent 1 said...
JU,
"as well as dead memory"
Read: Does Memory Reside Outside the Brain?
http://www.theepochtimes.com/n2/science-technology/sheldrake-morphogenic-field-memory-lashley-collective-unconscious-3486.html
We really are in The End Times.
7. timmy t said...
S2R1 - that's the bit that most people fail to understand the significance of I think - we are this deep in the doo-doo before the recession has even really got going. Your analogy will probably become reality for a large number of people!
8. uncle tom said...
As I have said before, inflation, to burn down debt; is now an economic necessity.
- and public sector pensions will have to be deferred so as to start on the person's 70th birthday, or be greatly reduced in value.
The largest peril that I see is a tidalwave of tactical personal bankruptcies -
- stop paying the mortgage, turn the mortgage money into hard cash (mattress money) until you eventually get evicted; then rent a similar place for half what you paying on your mortgage before -
- stop paying the HP on your cars until they get repo'd; and then use some of your mattress money to buy a second hand car or two for cash (and register it in a friend's name) -
- and then cheerfully go bankrupt, 'cos everyone's doing it..
9. enuii said...
I note from a later article posted that Kate Barker is quoted as saying 'I recognise that at some point this stimulus may need to be unwound, possibly rapidly, to avoid an overshooting of inflation.' So if the economy ain't working now with interest rates at 9/10 of diddly squat it certainly won't when they rise. The current measures are short termism at it's worst and are purely for the benefit of the current bunch of politcal incumbents at the long term expense of the rest of us; unaccountable democracy at it's worst.
10. drewster said...
Looks like Britain is on a path to become an economic basket-case similar to Argentina. Try doing an internet search for "Argentina's pension grab" - you'll see wherefrom Gordon gets his ideas! Anyone with savings or assets (other than property) gets clobbered.
For how much longer can land and property remain such a sacred cow?
11. sold 2 rent 1 said...
You're doing well today guys.
Keep staring into the abyss - I promise you there is good stuff beyond it - and it has jack all to do with house prices.
12. robh said...
s2r1
The mind acting as a receiver idea is quite interesting. There are examples in animals other than humans where 'ideas' seem to appear in distant places at the same time
Would this not of always been the case though and not 'end time' related?
13. 51ck-6-51x said...
Quite a good article - standard MoneyWeek :)
However, being a pernickety* baxtard I must point out an error:
"It's like owing more than five times your gross income - just before you lose your job."
- err, no, it's like owing A BIT LESS than five times your NET income - just before you lose your job.
The tax man does not take money from payments of public debt (as it does your salary), it actually claws some of it back! (The treasury pays off the debt to the bondholder who then has to pay tax on the income - well some bond holders do at least.)
* Pernickety is not in Fire Fox's British English dictionary (1.19) - is Scotland not in Britain? I'm really discombobulated (yeah that word ain't there either, but at least it is an Americanism).
14. sold 2 rent 1 said...
robh,
'end time' is about realising what reality really is and has always been - the consciousness singularity allows us this view.
15. str 2007 said...
Really 51ck I'm sceptic minuspeptic about your observations.
Well spotted.
May I offer you my heart felt perrycobobulations!