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JohnDuncan

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  1. Eco-tastrophe! How MPs in the pay of subsidised eco-firms set insane new carbon targets that send your bills sky-rocketing... and drag us to a new Dark Age -MP Tim Yeo was paid £135,970 last year by three 'green' companies -He has moved an amendment to the Energy Bill that would set a crippling target for the amount of carbon dioxide by generating power in 2030 Like all MPs, Tim Yeo is paid £65,000 a year. But he never has to make do with just that. Last year alone, three ‘green’ companies paid the Conservative MP for South Suffolk £135,970. For this, he usually did just a few hours’ work a month. Yet he may be the firms’ most valuable asset, as Mr Yeo is chairman of the Commons Select Committee on Energy and Climate Change, and so plays a key role in shaping the green economy in which his sometime employers – AFC Energy, Eco City Vehicles and TMO Renewables – operate. And he may be about to perform his most valuable service yet. Mr Yeo has moved an extraordinary amendment to the Energy Bill that would set a crippling and binding target for the amount of carbon dioxide emitted by generating power in 2030. It would transform the electricity industry and bring huge benefits to the business sector, which has so generously rewarded Mr Yeo. For the rest of us, however, the effects will be very different. It will cause already high energy bills to soar further and could lead to more power cuts. The effect on business is likely to be even more dramatic. Yet despite the considerable drawbacks, the amendment is likely to be passed into law. Following intense campaigning by an alliance of dozens of green pressure groups and renewable-energy firms, the move has won the support of Labour, many backbench Liberal Democrats and some Tories, which may be enough to push it through Parliament. ‘Even without the amendment, the long-term consequences of the Bill will be horrible,’ said Professor Gordon Hughes of Edinburgh University, one of Britain’s leading experts on energy economics. He issued a strong warning the ‘surreal’ amendment could spell the end of British industry. ‘It’s a recipe for deindustrialisation,’ he said. Prof Hughes thinks the choice is stark: ‘Either we get rid of this obsession, or we give away our future to the rest of the world. The question is whether we’re serious about our economic future or not.’ But for supporters of the amendment, cutting Britain’s carbon dioxide production is more vital. Read more: http://www.dailymail.co.uk/news/article-2283558/How-MPs-pay-subsidised-eco-firms-set-insane-new-carbon-targets-send-heating-bills-sky-rocketing.html#ixzz2LpP9La6K
  2. At some point the Central Bank will be forced to defend the pound and hike rates. They cannot escape economic law. They may think they can but they can't...
  3. They can only push against economic law before so long. Sooner or later the bank has to make a decision... Will they take the medicine and raise rates? will they defend the pound ? and at what level does it have to fall against the dollar before they start raising rates ? $1=£1 ? how high should inflation be before they raise rates ? 5%, 10%, 15%? If they bank raises rates think of the interest the gov has to pay on the enormous debt. I think it's already 50bn which could easily double when the rate increases come and Osbourne always bangs on about rates being "historically low" without letting on that they can't stay low forever.
  4. This is an important article... when will the British so called journalists start noticing the pound's decline? ************* The Pound Gets Pounded Peter Schiff As the global currency war intensifies, the majority of attention has been paid to the 17% fall of the Japanese yen against the U.S. dollar over the past few months. The implosion has given cover to the sad performance of another once mighty currency: the British pound sterling. But in many ways the travails of the pound is far more instructive to those pondering the fate of the U.S. currency. Japan has a unique economic and demographic profile which makes it a poor stalking horse. Newly elected Prime Minister Shinzo Abe and the Bank of Japan have clearly and forcefully committed Japan to a policy of inflation at any cost. Even in a world of serial money printers their plans stand out as exceptional. Britain, on the other hand, is charting a more conventional course to the same destination. The UK government, under conservative Prime Minister David Cameron and Chancellor of the Exchequer George Osborne, has succeeded in bringing marginal discipline to their budgetary imbalances. From 2009 to 2012, British government expenditures rose a total of just 1.6%, which was far below the official pace of inflation. (In contrast, U.S. federal spending grew by 7.9% over that time period). Since 2009 the British have kept their debt-to-GDP ratio lower than America's and have cut into that metric at a faster rate. But while the British are conservative when compared to their American cousins, they are hardly austere when compared to Germany (which continues to have a nearly balanced budget and extremely low debt to GDP). Paul Krugman blames Britain's lackluster economic performance on their misguided experiment with austerity. The monetary side of the equation also puts the UK within the spectrum of its peers. Ever since the Great Recession began in 2008 the Bank of England, led by outgoing Governor Mervyn King, has been far more stimulative than the European Central Bankers in Frankfort (but not quite as much as the Federal Reserve or the Bank of Japan). In contrast to the permanent and ongoing bond-buying quantitative easing programs underway in the U.S. and Japan, the Bank of England has engaged in such measures only selectively. Given the relatively moderate approach pursued by the British, the poor performance of their currency may be hard to fathom. The deciding factor may be that the Pound Sterling is not nearly as vital to investors, or as integrated into the global economy, as the U.S. dollar or the euro. The greenback, being the world's reserve currency, has always benefited from demand that is independent of its economic fundamentals. The euro benefits from the size of the euro zone and the legacy of German banking discipline. The pound enjoys no such privileges and as a result foreign central banks do not feel as pressured to prop it up. As a result, over the past few years the pound has been... pounded. Since July 2008, the currency is down 26.7% against the U.S. dollar, and in recent months it has started falling faster than all other developed currencies except for the Abe-pummeled yen. Since October 1, 2012 the pound has fallen by 4% against the dollar and 8% against the euro. The pound's health is made more suspect by the extreme challenges faced by the Bank of England as it tries to stimulate the most admittedly inflation prone economy among the major Western nations. Unlike the Federal Reserve, which is tasked by statute to combat both inflation and unemployment, the BofE has only a single mandate: to keep inflation contained. On that score it has been failing habitually. Inflation in the UK has been north of its 2% target for the past five years (the current official rate is 2.7%). In its most recent inflation projections, Mr. King admitted that it will stay that way for years to come, and that it may exceed 3% this year and next. With its currency weakening and inflation accelerating, the mandate of the BofE would clearly indicate that the time has come for monetary tightening. However, like all central bankers, Mr. King, and his successor, the Canadian Mark Carney, will not be bound by such triflings as statutory mandates and past promises. In his press conference last week, Mr. King spoke of "looking past" current inflation figures to a time when he expects inflation will moderate. When the choice is between inflation and the political pain of economic contraction, bankers (at least those who don't speak German) will choose inflation every time. While the American media has poked fun at the Bank of England's backtracking, they somehow do not understand that the Federal Reserve would be doing the same if not for the advantages given to us by the dollar's reserve status. Our ability to monetize the vast majority of the annual government deficit while exporting our inflation through half trillion dollar trade deficits and the overseas sale of hundreds of billions of Treasury bonds annually means that we do not yet face the pressures bearing down on the Bank of England. For now at least Cameron is sticking to his guns and making the politically difficult case to voters that today's hard choices will yield benefits down the road. This puts all the pressure on the Bank of England to satisfy the calls for stimulus. The Federal Reserve is fortunate in that the Obama Administration shares none of Cameron's fiscal determination. But already the Fed has done plenty of backing off from its prior promises. Just a few months ago Ben Bernanke announced specific inflation and unemployment triggers that would apparently put monetary policy on automatic pilot. But just last week, Fed Vice Chairman Janet Yellen announced that those goalposts (6.5% unemployment and 2.5% inflation) should not be considered "triggers" but as thresholds past which the Fed "may consider" tightening. When U.S. prices start to rise in earnest, look for the denials and rationalizations to come in torrents. The Fed will never acknowledge high inflation no matter what the data, nor will it ever take any steps to combat it. The simple reason is that it will be unable to do so without bringing on the economic contraction that is so terrifying to the British. However, as British inflation accelerates, the pressure on the Bank of England to change course will intensify. As monetary stimulus continues to take its toll on the pound, price pressures will mount, even as the economy continues to stagnate. In other words, it is charting a course to stagflation. Perversely, this will put even more pressure on the BofE to ease. However, more cheap money will not stimulate the economy but merely cripple it further by fueling the inflationary fire. At some point the British will have to admit that stimulus doesn't work. To break the inflationary spiral and rescue the ailing pound, the BofE will be forced to aggressively raise rates, at which point the British government will have no choice but to slash spending more deeply than would have been the case had they taken their medicine sooner. However, if the BofE refuses to tighten even in the face of much higher official inflation, the pound may deteriorate further and the UK might be left with the embarrassing choice of adopting the euro. As far as the United States is concerned, the U.K. is the canary in the coal mine. What they are going through now, and what they may be about to go through, we will surely experience in the years ahead. The only difference is that the leeway afforded to us by our special status simply gives us more rope to hang ourselves. When the noose finally tightens, the fall will be that much more painful. Peter Schiff is the CEO and Chief Global Strategist of Euro Pacific Capital, best-selling author and host of syndicated Peter Schiff Show. http://finance.townhall.com/columnists/peterschiff/2013/02/20/the-pound-gets-pounded-n1515976/page/full/
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