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Everything posted by huw

  1. This suggests that the UK does not even technically have the option to allow RBS to go bankrupt. If true, it's morally-hazardous in the extreme, because it means that a private bank (privately managed and with significant private ownership) is able to issue bonds that are, to all intents and purposes, UK gilts. My own suspicion is that the German thing comes out of some EZ stability requirement, but I'll reserve judgement on that until more details emerge.
  2. The article refers to WestLB AG bank as "state owned" and Hypo Real Estate as "nationalised". As far as I'm aware, only NR has been nationalised in the UK, some of the others have substantial state shareholdings but are not publicly owned (?) Edit: however the article claims (techically incorrectly, as far as I'm aware) that RBS is nationalised.
  3. OTOH ethical consumption is a luxury that will become less affordable as the impoverishing effects of globalisation really begin to bite. Even if people have the best intentions, they may not be able to make the "right" choice. By this stage the system will be re-balancing though, but only through impoverishment all around, as we are left without goods or spending power, and they are left without markets. In the meantime, I don't suppose a sweatshop worker will be any happier if she loses her job because her production is boycotted on ethical grounds, than if it was kept out by import tariffs.
  4. I'm a fully paid-up OO and want HPC because, contrary to what many believe, high house prices are useless to people like me. There's not a single positive to HPI, unless I decide to sell up and emigrate. Every aspect of high HPs, from stamp duty to council/inheritance tax to the cost of getting a place with more land, is negative for me, imposed by lenders and borrowers (speculators, all) who collectively engaged in an insane bidding war. Basically, I'd prefer to live in a country with a rational system of economic incentives.
  5. They live in poverty despite having created fabulous amounts of wealth because they've lent most of it back to us. Stop that, and the system will start to fix itself. Get rid of the existing debt ledger-entries (through inflation or default or -- inconceivable, but I'll mention it -- the spending of surpluses) and it might well fix itself faster.
  6. These two points are intimately connected. Without eye-watering amounts of credit being extended from producer countries to consumer countries, we'd have been able to afford many fewer of the TVs, jeans, toys and laptops because we'd have had to purchase, rather than borrowing on subsidised-terms, the home currency in which the goods were priced. Such purchases would have driven our currency down and theirs up, meaning that eventually a competitive balance would have been restored and: 1) our demand for goods would have been less voracious, meaning fewer of the competitive pressures & economies of scale that fed back into the consumer bounty that you implicitly praise above. But still better than what the old model of "all industrial goods are made by first-world workers" would have delivered. 2) a more balanced distribution of production -- the UK would have been able to meet more of its own needs, probably would be less socially-broken because there would be WORK. 3) The UK would also be less broken because there'd have been less debt-fuel (and less need) for bubble-blowing. Overall we'd have fewer toys but the world would be a better and more sustainable place, with fewer debtors to go bankrupt and fewer creditors to lose their shirts.
  7. Good & well-written story overall. More credibility would come from following his attempt to go bankrupt, since this would be an obvious solution to the family's predicament under current UK law. Debtors' prisons can only exist once bankruptcy option has been taken away. Also the demolition programme seemed bizzare. Some creditor would end up owning the repossessed homes; surely he'd rent them out for whatever return was achievable? That's quite a lot of value you envisage being junked for no good reason that I can see.
  8. On the broad question raised in the OP: What evidence is there that the BoE spiked the punch bowl? Who set the inflation target and chose (changed) the index by which it would be measured? How did King vote in the meeting that's widely held to have re-ignited the boom by cutting interest rates in August 2005? Seriously, before throwing too many stones, look up the voting record. (missing word)
  9. Bye-bye foreign reserves (or a significant percentage thereof); bye-bye globalised markets; hello confrontation over resources that the USA can no longer acquire through debt-based trade. If there's nuking, it will be as part of that conflict. In the meantime there'll be plenty of economic fallout to go around. It's a thistle the Chinese have to grasp eventually, though.
  10. A two-tier system is implicit in some people being given land -- that's the distinction as far as I can see, not whether you self-build or not. Seems entirely reasonable to me, otherwise you're back in the "right-to-buy" situation with individuals profiting from a council-originated resource, to the detriment of future would-be-users of that resource.
  11. Hands up everyone who expects the economy to re-adjust away from debt-funded consumption (whether public or private debt) in three months. Or even in three years. There's no quick fix for what ails us.
  12. I can't get my head around the bold bit, can anyone explain what it means?
  13. Anything else would represent a subsidy and a transfer of business from successful companies (that pay their tax) to their failing competitors (that are let off). This is not a recipe for a healthy economy IMO. If we're going to subsidise failing companies to keep them going, we need to do so transparently following proper public and parliamentary debate.
  14. Only way it would make sense is for corresponding haircuts to be imposed on the bondholders. That would be debt-forgiveness. Anything else is just balance-sheet shuffling.
  15. What proportion of the workforce do you reckon could get into such positions? (considering both the individuals' capacities, and the demand for those roles) What happens to everyone else? Is it possible to run a modern economy and society based purely on the contributions (tax and otherwise) of those with non-transferrable knowledge? As for the "physically present" roles -- where will all the UK demand (=desire + capacity to pay) for nurses, hotel managers, and postmen come from?
  16. These are very good points. A UK mortgagor defaulting on some foreign-held RBMS isn't a UK sovereign default; it's a problem for the foreign creditor (uness we bail that creditor out by taking the debt onto the sovereign balance sheet ) Similarly with defaulting on UK pensions or even PFI. The bond markets might even look at such an internal default favourably, since it leaves more UK resources for them.
  17. Food stamps and free laptops are not money, but they're clearly a subsidy in kind. The fact that costs have been sunk makes no difference, it's about privileged access to society's accumulated capital, and allocation of limited resources (or not) to those who really need it, when they need it.
  18. "I'm not subsidised!" "Then will you give up your tenancy, like the nice Mr C is asking, so that someone in greater need can have the shelter?" "NO!!!"
  19. UK peak coal production was in 1913. We have ample coal when set against our current level of use -- but the vast majority of the energy we use comes from other sources. We have around one acre of total land per person, much of which is built up, paved over or otherwise unsuitable for cultivation, e.g. moorland and mountain. In terms of arable land, we have approx 1/4 acre per head. UK farming is highly mechanised and dependent on oil and gas for fuel and fertiliser, which have to be imported and paid for with wealth we somehow create. Ample fish? I'm not so sure. The price changes over recent years certainly seem to indicate otherwise. I suspect we could feed ourselves on 1/4 acre each, but without being able to trade for the inputs needed by industrial agriculture, it would be a shocking change to our way of life. Out of the office, back to the fields ... and hope you don't have a bad year. US figures, I would have thought. The beef production I'm familiar with is based on grass (though the land could still be switched to human crops if needed, and the means to cultivate it existed). There is also a large amount of land in the UK that's too marginal for much except for grazing, so I don't think it's necessary for us to stop eating meat from that pov. Less meat, certainly. Cat food is mostly grain, oddly enough (look at the label sometime). What meat there is will probably be crud like MRM, best avoided by sensible humans IMO
  20. On the contrary, there are circumstances where it is both intelligent and humane to limit reproduction. The dumb strategy is to reproduce blindly until all the resources are gone -- any algal bloom is smart enough to manage that, as is your typical human being, apparently
  21. Indeed, their purpose is to serve their members' interests rather than the wider interest. Contrast with: By fighting to keep an incompetent member in-post, the unions and their apologists are clearly not caring about the "people other than themselves" who will end up on the wrong side of that incompetence. This is particularly serious with public-sector unions (and public-sector organisations such as the police, who have a tendency to close ranks to protect one another) because the public has no choice but to deal with them.
  22. It doesn't have to be that way (but it probably will). The real workers could get pay rises, while the fakers have their pay eroded. Just as long as the fakers aren't index-linked...
  23. And how will we pay for the imported raw materials to which we'll add value, if we're unable to re-export part of that value? North Sea oil and gas are on the way out; the coal is mostly gone; our population density means we're short of farm land. So we're not going to pay our way by growing and exporting food, or by digging up bits of our country and selling them. If trade collapses as you predict (and it might), the population will reduce either by emigration or by other means, and those who remain will be looking back to the days of £50 dole as a lost golden age.
  24. Along with the DVD players, you end up denying yourself the best computers, machine tools, etc. meaning that you become less and less competitive as time goes on. Tit-for-tat tariffs also mean that you lose access to export markets/trade, which are needed to pay for vital imports such as oil. If it were possible to run an effective fortress-economy, I suspect that white South Africa would still be toughing it out. There's no comfortable answer to this dilemma, though one possible route to making Taiwanese DVD players less affordable, would be for sterling to fall to a more appropriate level.
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