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http://globaleconomicanalysis.blogspot.com...rs-on-edge.html

'Britain On Edge Of Bankruptcy

Inquiring minds are reading how Gordon Brown brings Britain to the edge of bankruptcy

Iain Martin says the Prime Minister hasn't 'saved the world' and now faces disgrace in the history books.

They don't know what they're doing, do they? With every step taken by the Government as it tries frantically to prop up the British banking system, this central truth becomes ever more obvious.

The Government's bail-out of the banks in October with £37 billion of taxpayers' money was supposed to have "saved the world", according to the PM, but now it is clear that it has not even saved the banks. Our money kept the show on the road for only three months.

It is finally dawning on the Government that the liabilities of the British banks grew to be so vast in the boom years that they now eclipse the entire economy. Unfortunately, the Treasury is pledged to honour those liabilities because it has guaranteed not to let a British bank go down. RBS has liabilities of £1.8 trillion, three times annual UK government spending, against assets of £1.9 trillion. But after the events of the past year, I wager most taxpayers will believe the true picture is worse.

And they come piled on top of the rocketing national debt, charitably put at £630 billion, or 43 per cent of GDP. The true figure is much higher because the Government has used off-balance sheet accounting to hide commitments such as PFI projects.

The PM and the Chancellor , both looking a year older every day, tell us that for their next trick they will buy more bank shares, create a giant insurance scheme for bad debt, pledge to honour liabilities without limit, cross their fingers and hope it all works. The phrase "bottomless pit" springs to mind for a reason: that is what they have designed.

Gordon Brown's nightmare, in which we are all trapped, is going to get much worse.

Iain Martin is thinking clearly. Unfortunately no one in the UK with any authority is. This is a known quirk of the Fiscal Insanity Virus, now rapidly spreading the globe.

FIV always seems to strike those with the power to do the most damage. Prime Minister Gordon Brown, Bank of England Governor Mervyn King, and the Chancellor of the Exchequer Alistair Darling, all seem to be in the late stages of FIV.

Hope of recovery is slim.'

Unlike Jim Rogers who talks his book,Mish tells it as it is.

Edited by the reaper

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This is the bit I don't get though:

<<RBS has liabilities of £1.8 trillion, three times annual UK government spending, against assets of £1.9 trillion.>>

What's the problem? Surely RBS has net assets of a mere £0.1trillion, or £100billion.

I appreciate that the ratio may change as asset values change or due to currency exchange rates. However surely the asset side cannot be wiped out completely. It's misleading to say the £1.8trillion liability could be put on the taxpayer? In the event it will be nowhere near that.

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And they come piled on top of the rocketing national debt, charitably put at £630 billion, or 43 per cent of GDP. The true figure is much higher because the Government has used off-balance sheet accounting to hide commitments such as PFI projects.

I think now is the time for a loud campaign to force the government to come clean about these off-balance sheet liabilities.

Write to your MP.

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"Oh," said Gordon as he sat on a cardboard box next to his kindly friend, Darling, the economy in shreds around them, the banks shuttered and Army vehicles parked at every street corner. "Oh, so that's why The Last Bear and other posters on HPC kept going on and on about interest rates needing to be kept high, that even 7% was low, that we were clueless, that Blair and myself were on a road to trouble. Oh."

"Look, it's an old Northern Rock 110% mortgage leaflet there in the rubble!" exclaimed Darling. "Those were the days eh! We thought we'd cracked it, some kind of magic money tree miracle, the coffee shops full of single mums, the roads full of single mums' VWs and Audis..."

"Yes, a Starbucks on every corner wasn't it. Now it's just turned to dust, Darling."

"No more boom and bust though eh Gordon! Ha ha it's just bust now. Only joking, Gord!"

"Strong fundamentals, strong fundamentals..." murmured Gordon.

Then all the lights went out.

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IMO, as that point approaches, or is passed, Brown et al will simply be removed, and a new regime (whatever that is) will announce that UK promises towards the banks were improper, and those liabilities will be set adrift.

This is what I was thinking of the other day. Shall we team up come the glorious day?

(will this e-mail be snagged as a treasonous plot and the boys sent round to black bag me?)

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"Oh," said Gordon as he sat on a cardboard box next to his kindly friend, Darling, the economy in shreds around them, the banks shuttered and Army vehicles parked at every street corner. "Oh, so that's why The Last Bear and other posters on HPC kept going on and on about interest rates needing to be kept high, that even 7% was low, that we were clueless, that Blair and myself were on a road to trouble. Oh."

"Look, it's an old Northern Rock 110% mortgage leaflet there in the rubble!" exclaimed Darling. "Those were the days eh! We thought we'd cracked it, some kind of magic money tree miracle, the coffee shops full of single mums, the roads full of single mums' VWs and Audis..."

"Yes, a Starbucks on every corner wasn't it. Now it's just turned to dust, Darling."

"No more boom and bust though eh Gordon! Ha ha it's just bust now. Only joking, Gord!"

"Strong fundamentals, strong fundamentals..." murmured Gordon.

Then all the lights went out.

Brilliant post! Scary thing is, in 12-18 months, this may well be the case. Interesting times ahead, thats for sure...

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"Oh," said Gordon as he sat on a cardboard box next to his kindly friend, Darling, the economy in shreds around them, the banks shuttered and Army vehicles parked at every street corner. "Oh, so that's why The Last Bear and other posters on HPC kept going on and on about interest rates needing to be kept high, that even 7% was low, that we were clueless, that Blair and myself were on a road to trouble. Oh."

"Look, it's an old Northern Rock 110% mortgage leaflet there in the rubble!" exclaimed Darling. "Those were the days eh! We thought we'd cracked it, some kind of magic money tree miracle, the coffee shops full of single mums, the roads full of single mums' VWs and Audis..."

"Yes, a Starbucks on every corner wasn't it. Now it's just turned to dust, Darling."

"No more boom and bust though eh Gordon! Ha ha it's just bust now. Only joking, Gord!"

"Strong fundamentals, strong fundamentals..." murmured Gordon.

Then all the lights went out.

sounds like a quote from an Ayn Rand book

Edited by Si1

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Brilliant post! Scary thing is, in 12-18 months, this may well be the case. Interesting times ahead, thats for sure...

thank you kind sir

sounds like a quote from an Ayn Rand book

never 'eard of 'im but will google it

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Brilliant post! Scary thing is, in 12-18 months, this may well be the case. Interesting times ahead, thats for sure...

Very good, but I am surprised that Broon and Captain Darling are aware of the famous "The Last Bear".:rolleyes:

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"Oh," said Gordon as he sat on a cardboard box next to his kindly friend, Darling, the economy in shreds around them, the banks shuttered and Army vehicles parked at every street corner. "Oh, so that's why The Last Bear and other posters on HPC kept going on and on about interest rates needing to be kept high, that even 7% was low, that we were clueless, that Blair and myself were on a road to trouble. Oh."

"Look, it's an old Northern Rock 110% mortgage leaflet there in the rubble!" exclaimed Darling. "Those were the days eh! We thought we'd cracked it, some kind of magic money tree miracle, the coffee shops full of single mums, the roads full of single mums' VWs and Audis..."

"Yes, a Starbucks on every corner wasn't it. Now it's just turned to dust, Darling."

"No more boom and bust though eh Gordon! Ha ha it's just bust now. Only joking, Gord!"

"Strong fundamentals, strong fundamentals..." murmured Gordon.

Then all the lights went out.

Sounds like that scene in 'Coming to America' where the two millionaires from 'Trading Places', now tramps, get given some money by Eddie Murphy. Except this time it would be the IMF giving the handout!

'Randolph...WE'RE BACK IN BUSINESS!'

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Note how the piece ends:

"Notice how the big fear is that inflation will fall below 2 percent. How stupid can you get? The fear ought to have been about asset bubbles, speculation, and inflation, not low prices."

Which is immediately followed by a "how to buy gold and silver online" ad. :lol::lol::lol:

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the Tories after a snap election, or at a push those "grey men" that seem to appear when rigid sensibleness is required and the safety of Albion is at stake.

Did you have anyone in mind, Durch?

Alexander Frederick Douglas-Home, Baron Home of the Hirsel,[1] KT, PC (2 July 1903 – 9 October 1995), 14th Earl of Home from 1951 to 1963, was a British Conservative politician, and served as Prime Minister of the United Kingdom for a year from October 1963 to October 1964 (as Sir Alec Douglas-Home). He held a series of records: he was the last member of the House of Lords to be appointed Prime Minister and the last Prime Minister to be chosen personally by the British monarch. He was also the only Prime Minister to have played first class cricket

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Thanks for that post. I love Mish.

The difference between the national debt, and the newly acquired bank liabilities is that many of them are not sterling denominated. If there is a real sterling crisis the nominal sterling value of those newly acquired liabilities will boom, and no amount of printing can compensate, as sterling will simply be discounted by the same measure.

i dont think they will meet all the liabilities of the banks when it becomes clear that the banks are too big to bail and the gilts market collpses they will think better of it IMHO and go all iceland... e.g 15% interest rates and an IMF loan etc. the banks will go under and the system will collapse...

when Browns gilt edged credit card is declined by the bond vidgilanties.. he will see how powerless he is...

Edited by jonpo

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As Mervyn King said, the assets are a matter of opinion, the liabilities are real.

Mervyn is the King of talk! but nowhere to be seen when the action is needed. Why the hell did he not prevent asset price bubble, as he knew, the assets are a matter of opinion, the liabilities are real?

Instead the muppet kept cutting rates to fuel the house price inflation. I guess we all felt good at the time thanks to low interest rates and ever increasing house prices, happy and rich!

God corrupt politicians and bankers do p*ss me off :lol:

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You'll find he's had a sex change. ;)

Whoops, sorry ma'am! :)

Very good, but I am surprised that Broon and Captain Darling are aware of the famous "The Last Bear".:rolleyes:

Oi you, don't burst me bubble, it's my moment of glory!

Sounds like that scene in 'Coming to America' where the two millionaires from 'Trading Places', now tramps, get given some money by Eddie Murphy. Except this time it would be the IMF giving the handout!

'Randolph...WE'RE BACK IN BUSINESS!'

I vaguely remember that scene. Any similarity between muppets living or dead is purely coincidental, or is it.

Mervyn is the King of talk! but nowhere to be seen when the action is needed. Why the hell did he not prevent asset price bubble, as he knew, the assets are a matter of opinion, the liabilities are real?

Instead the muppet kept cutting rates to fuel the house price inflation. I guess we all felt good at the time thanks to low interest rates and ever increasing house prices, happy and rich!

Mervyn had his brain swapped out, like Reagan in Spitting Image. Either that or they got Derren Brown to put him under some time in 2003. "3,2,1 Mervyn, you're back in the room [snap fingers]."

"Where am I, where's Northern Rock?"

"It's been nationalised, Mr King, and interest rates are now 1 and a half percent, and we're not sure but we think you made love with some American fella who calls himself Danny and sometimes David..."

"Oh my..."[passes out]

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"Oh," said Gordon as he sat on a cardboard box next to his kindly friend, Darling, the economy in shreds around them, the banks shuttered and Army vehicles parked at every street corner. "Oh, so that's why The Last Bear and other posters on HPC kept going on and on about interest rates needing to be kept high, that even 7% was low, that we were clueless, that Blair and myself were on a road to trouble. Oh."

"Look, it's an old Northern Rock 110% mortgage leaflet there in the rubble!" exclaimed Darling. "Those were the days eh! We thought we'd cracked it, some kind of magic money tree miracle, the coffee shops full of single mums, the roads full of single mums' VWs and Audis..."

"Yes, a Starbucks on every corner wasn't it. Now it's just turned to dust, Darling."

"No more boom and bust though eh Gordon! Ha ha it's just bust now. Only joking, Gord!"

"Strong fundamentals, strong fundamentals..." murmured Gordon.

Then all the lights went out.

"How would we have come up with the money to pay higher interest rates, though?" Darling asked.

"We'd have got our creditors to add it to the tab, of course," Gordon replied. "Why change a winning strategy?"

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Did you have anyone in mind, Durch?

Alexander Frederick Douglas-Home, Baron Home of the Hirsel,[1] KT, PC (2 July 1903 – 9 October 1995), 14th Earl of Home from 1951 to 1963, was a British Conservative politician, and served as Prime Minister of the United Kingdom for a year from October 1963 to October 1964 (as Sir Alec Douglas-Home). He held a series of records: he was the last member of the House of Lords to be appointed Prime Minister and the last Prime Minister to be chosen personally by the British monarch. He was also the only Prime Minister to have played first class cricket

Surely not the first corpse to become PM too! :o

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"How would we have come up with the money to pay higher interest rates, though?" Darling asked.

"We'd have got our creditors to add it to the tab, of course," Gordon replied. "Why change a winning strategy?"

I am obviously in the ascendant, I have now been syndicated to Huw International.

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That's not going to happen is it!!!!

So what exactly is hyperinflation in the UK going to do to losses on US and EUR denominated RMBS/CMBS losses on RBS's books?

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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