Is There A Chance That All This Bailout And Money-printing Tomfoolery....

[MOP]

The people wont put up with something that is painfull and horrid so Gordon is going to try and put them on methadone.

Gordon is the doctor wether or not he turns out to be Harold Shipman in disguise is another matter.

[aa3]

Since I've been arguing for printing money to help the crisis for 18 months now, well I'm getting some of what I asked for. I would have gone a lot bigger than 150 billion pounds if I was in charge, and not cut interest rates so hard(as I think interest rates so low causes other problems in the economy).

I also view most things in the world, as if its a great idea, then doing it a little should be a good idea. Eg.. a few property rights are better than none. If printing a ton of money like I advocate is great, then printing a little should be good. And I think we saw this week the positive impact printing has in this type of an environment, even though it was only something like 2 billion pounds worth, the market starts factoring in the expected printing.

As I've been saying my first choice was to send most of the printed money directly to all citizens of the country. My second choice was tax cuts and tax rebates and making up the fiscal gap by printing. My third choice was increase government spending made up for by printing. Fourth and imo bad choice, bailing out banks with it(it is better imo to bail out all people allowing those with debts to make their loan payments).

Brown and co seem to be going for a combination of 2 and 3. Basically government revenues are falling, and they are making up the gap with printing. And in addition giving tax cuts which I think is the right thing to do.

[tinker]

Will it `work'

There hasn't been one initiative in GB's response to the recession which has come with measurable objectives against which to judge success. Why don't the journos at the initiative launch press conferences start making an investment in future stories by asking `how will success be measured for this and over what timescale?'

VAT reduction

Base rate reduction

stamp duty holiday

bank recapitalisation

mortgage rollover for `hard working families'

more bank capitalisation and nationalisation

car loans

Pleading with banks to lend more

QE

etc, etc

`We're doing this to try to help families/businesses/the economy/the banks' is criminally vague when throwing these sums of money around.

Correctomundo. There is nothing SMART about these initiatives. You couldn't get away with it in business (banks excepted, well maybe car manufacturers too, well...)

We are being driven by political reactions to events, devoid of proper economic analysis. If the problem is debt, it is not going to be solved by more debt (Sarah's heroin/junkie/dealer/cold turkey analogy). The main problem of course is that it was allowed to happen in the first place.

Any 'success' now will merely push the problem forward but will make things worse. Politically for Brown that would be acceptable - he cares little for the country but more for his reputation.

[gf3]

Since I've been arguing for printing money to help the crisis for 18 months now, well I'm getting some of what I asked for. I would have gone a lot bigger than 150 billion pounds if I was in charge, and not cut interest rates so hard(as I think interest rates so low causes other problems in the economy).

I also view most things in the world, as if its a great idea, then doing it a little should be a good idea. Eg.. a few property rights are better than none. If printing a ton of money like I advocate is great, then printing a little should be good. And I think we saw this week the positive impact printing has in this type of an environment, even though it was only something like 2 billion pounds worth, the market starts factoring in the expected printing.

As I've been saying my first choice was to send most of the printed money directly to all citizens of the country. My second choice was tax cuts and tax rebates and making up the fiscal gap by printing. My third choice was increase government spending made up for by printing. Fourth and imo bad choice, bailing out banks with it(it is better imo to bail out all people allowing those with debts to make their loan payments).

Brown and co seem to be going for a combination of 2 and 3. Basically government revenues are falling, and they are making up the gap with printing. And in addition giving tax cuts which I think is the right thing to do.

+1

[gf3]

it worked in germany didnt it? arent we still paying back our post war debts, theirs was written off?

Income tax was introduced to pay for the Napoleonic Wars we are still paying that back aren’t we.

[Winston Wolf]

As I've been saying my first choice was to send most of the printed money directly to all citizens of the country.

Yes what a great choice not. Give the people money so they can spend it on products imported from other countries.

The whole problem is UK PLC is a big shop which only ever goes to the wholesalers to buy stock and never sells anything to its customers. What I mean is our trade deficit is carp and is the route of the problem. We arent by and large competitive so we have to borrow to keep our standard of living up.

I would spent some of the money somehow supporting exporters. We need exporters.

[gf3]

Yes what a great choice not. Give the people money so they can spend it on products imported from other countries.

The whole problem is UK PLC is a big shop which only ever goes to the wholesalers to buy stock and never sells anything to its customers. What I mean is our trade deficit is carp and is the route of the problem. We arent by and large competitive so we have to borrow to keep our standard of living up.

I would spent some of the money somehow supporting exporters. We need exporters.

Agreed so we need sterling to drop to a level that will make us competitive

[aa3]

Agreed so we need sterling to drop to a level that will make us competitive

Good point, when we print money the value of sterling should drop if we print hard enough. Its a major advantage we have over our European neighbours.

[aa3]

Yes what a great choice not. Give the people money so they can spend it on products imported from other countries.

The whole problem is UK PLC is a big shop which only ever goes to the wholesalers to buy stock and never sells anything to its customers. What I mean is our trade deficit is carp and is the route of the problem. We arent by and large competitive so we have to borrow to keep our standard of living up.

I would spent some of the money somehow supporting exporters. We need exporters.

I agree that we should go all out to build export industry. And real industry where real high paying jobs are. Like refineries, fertilizer plants, steel mills and the like. I wouldn't even support this bs service industries with their low paying jobs and low job security.

And what I'd go in is all super large energy users. So we'd have to drop all this radical green ideology(although I would provide the energy through masses of nuclear power plants which are emission free), and the insane over-regulation of industry. Its these factors which I think discourages heavy industry investment the most. And it is only heavy industry which generates good jobs for thousands in say a town. Things like tourism are imo for loser countries which can't build real industry. The jobs they generate are seasonal low pay ones.

Edited March 13, 2009 by aa3

[GrillsBears]

I agree that we should go all out to build export industry. And real industry where real high paying jobs are. Like refineries, fertilizer plants, steel mills and the like. I wouldn't even support this bs service industries with their low paying jobs and low job security.

And what I'd go in is all super large energy users. So we'd have to drop all this radical green ideology, and the insane over-regulation of industry. Its over-regulation which I think discourages heavy industry investment the most. And it is only heavy industry which generates good jobs for thousands in say a town. Things like tourism are imo for loser countries which can't build real industry. The jobs they generate are seasonal low pay ones.

Yep. We should turn the U.K into a giant ******ing smokestack of a nation. We should dig up every square inch of the countryside in the search for coal and then drill more for oil.

If we can't find anything there we should promise to take on the most polluting industries form countries that don't want them. Asbestos? No problem we'll do it our people are cheap! Dioxins? We'll do it without rubber gloves! PCBs? We ******ing love em. We'll eat em for £7 an hour.

For ******s sake.

Edited March 13, 2009 by GrillsBears

[Timm]

The people wont put up with something that is painfull and horrid so Gordon is going to try and put them on methadone.

Gordon is the doctor wether or not he turns out to be Harold Shipman in disguise is another matter.

Good imagery, but I think you got it mixed up.

It is the methadone the public were hooked on. Now the supply has dried up, Gordon is gifting medical grade heroin to the dealers. He is hoping they will cut it and put it on the streets. He does not realise they always keep the good stuff for themselves.

Correctomundo. There is nothing SMART about these initiatives. You couldn't get away with it in business (. . .)

Bang on. Why has no-one in the MSM* picked up on this? (Link inserted into quote)

*Or the so called "party of business"?

[Timm]

(. . .) And what I'd go in is all super large energy users. So we'd have to drop all this radical green ideology(although I would provide the energy through masses of nuclear power plants which are emission free), and the insane over-regulation of industry. Its these factors which I think discourages heavy industry investment the most. And it is only heavy industry which generates good jobs for thousands in say a town. Things like tourism are imo for loser countries which can't build real industry. The jobs they generate are seasonal low pay ones.

Sorry to be rude, but that is short term, suicidal idiocy.

Look at what Portugal are doing on renewables, not only are they on track for 40% of energy use from renewables, they will also be consultants to the rest of the world when they have to adopt the tech and gear up quick smart. That position should be the natural position of the UK. We are passing up a golden opportunity here.

The fact the snot gobbler is paying the above approach lip service shows that even he is aware that this is what we should be doing.

[Timm]

Yep. We should turn the U.K into a giant ******ing smokestack of a nation. We should dig up every square inch of the countryside in the search for coal and then drill more for oil.

If we can't find anything there we should promise to take on the most polluting industries form countries that don't want them. Asbestos? No problem we'll do it our people are cheap! Dioxins? We'll do it without rubber gloves! PCBs? We ******ing love em. We'll eat em for £7 an hour.

For ******s sake.

I agree.

aa3 made a Bad Post.

Edited March 13, 2009 by Timm

[Winston Wolf]

Good imagery, but I think you got it mixed up.

It is the methadone the public were hooked on. Now the supply has dried up, Gordon is gifting medical grade heroin to the dealers. He is hoping they will cut it and put it on the streets. He does not realise they always keep the good stuff for themselves.

I was looking on the bright side, it tend to mess with peoples heads on here :-)

Anyway the real pushers here are abroad, the suppliers of easy credit, those who play the long game.

[XswampyX]

Things like tourism are imo for loser countries which can't build real industry. The jobs they generate are seasonal low pay ones.

So true. Just look at Cornwall, no industry just seasonal jobs. Do we want England to be the Cornwall of Europe. I don't it sucks.

[slurms mackenzie]

It might help a little bit, but things are not going to start improving until the American housing market reaches bottom.

Correct, everything and i mean everything is linked to that, it's not about citi returning to profit it's not about what gordo does people, what caused this is what 'cures' this, the US housing market,

It's gonna be another 6 months then it will stay low for around four years, but the fact it's not going down will spur on markets,

[uncle rogi]

4000+ years eh? Didn't think they had printing presses back then

http://en.wikipedia.org/wiki/Commodity_market

Commodity money and commodity markets in a crude early form are believed to have originated in Sumer where small baked clay tokens in the shape of sheep or goats were used in trade

This represented the first system of commodity accounting.

http://en.wikipedia.org/wiki/History_of_Sumer

ending with the downfall of the Third Dynasty of Ur around 2004 BC,

so 4000+ years is correct

clay tablet money is non redeemable today therefore a form of fiat etc, and as any gold and silver coins used then still have value today the point is valid please read about the sumerian (state) system one that is still with us today.

[Super Mario]

please read about the sumerian (state) system one that is still with us today.

Yawn - do I have to?

[aa3]

So true. Just look at Cornwall, no industry just seasonal jobs. Do we want England to be the Cornwall of Europe. I don't it sucks.

Good example. I came to the conclusion through simple observation, then started comparing some of the numbers. Liverpool has gone all out to be a city of culture/tourism center. They said tourism generates 640 million pounds in economic activity for the area. And that is after decades of promoting and building up that business.

Meanwhile a single big aluminum plant can generate like 400 million pounds in economic activity. Which is why they can pay the high salaries and suck up down time periods whlie still paying the wages.

Of course one of the best is oil. A 150,000 barrel per day oil field if it gets say 45 pounds per barrel.. that is about 2.5 billion pounds in revenue.

[uncle rogi]

Yawn - do I have to?

ignorance is strength.

[Bloo Loo]

according to R4 reports this morning, most of the QE money is going overseas... no details yet

[ParticleMan]

As GOM continually needles us all, the problem with QE is that it's a logical solution to an entirely irrational problem; and as ?...! points out, fiscal stimulus must increase waste (hence risk premia) and will thus be deeply pro-cyclical on a system-wide basis.

The only economically effective form of QE available is as compensatory part-payment in default on credit obligation.

In ancient times we called this by its true name - "tribute"; it'd be useful at this juncture if we resumed doing so.

If QE succeeds in lifting price levels to the point that borrowers are no longer in distress, property rights and the rule of law will instead collapse; this is Injin's scenario (of the State buying up everything in sight before ultimate collapse) viewed through different lenses (in an attempt to more correctly distinguish cause and effect and yet set aside the need to personify the dynamic involved which is rooted in the irrational need to assign blame to named actors).

I probably don't have to spell out what the collapse of property rights means in terms of owner-occupier equity.

Edited March 14, 2009 by ParticleMan

[ParticleMan]

As a postscript - there's only one question that needs to be asked about QE.

And that question is "if borrowers can't repay their loans, how can we collectively ever hope to repay the tax?"

Remembering of course that the capital borrowed not been used in productive endeavour - it has been used to speculatively raise broad price levels.

This is why QE will be inneffective - either because prices will drop regardless, or the rule of law will fail under the strain.

Edited March 14, 2009 by ParticleMan

[Bloo Loo]

As a postscript - there's only one question that needs to be asked about QE.

And that question is "if borrowers can't repay their loan, how can we ever hope to repay the tax?"

Rembering of course that the capital borrowed not been used in productive endeavour - it has been used to speculatively raise broad price levels.

This is why QE will be inneffective - either because prices will drop regardless, or the rule of law will fail under the strain.

QE is ineffective because each and every note printed devalues each and every one in existence.

makes not a jot of difference if I earn 20K and coffee costs £2 or If I earn 40K and coffee costs £4 (taxes excluded).

[aa3]

Yep. We should turn the U.K into a giant ******ing smokestack of a nation. We should dig up every square inch of the countryside in the search for coal and then drill more for oil.

If we can't find anything there we should promise to take on the most polluting industries form countries that don't want them. Asbestos? No problem we'll do it our people are cheap! Dioxins? We'll do it without rubber gloves! PCBs? We ******ing love em. We'll eat em for £7 an hour.

For ******s sake.

at your second paragraph.

Main thing is with this service economy we will be working at £7 an hour and seasonally. Like the tourism industry which so many locales have gone into and I see the jobs advertised. In smokestack nation we can have jobs that pay £30 an hour with full benefits, union representation, job security and those jobs available to the average person.

Edited March 14, 2009 by aa3