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Uk Mired In £5 Trillion------- Merged Threads

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This keep on rising,

From £1Trillion it now stand at £5Trillion !

what it be in few days? & how this is going to paid by few cuts here & there, don't think so!

equivalent to £200,000 per household, lovely, I never asked for it.

A Lot Worse: UK Mired In £5 Trillion Of Debt

10:06pm UK, Wednesday July 14, 2010

Ed Merrison, Sky News Online

Britain has sunk into a pit of debt which is five times deeper than previously feared, with the country now owing the equivalent of £200,000 per household.

Instead of the £1 trillion reading normally presented as the nation's debt, the UK is in the red by closer to £5 trillion, figures from the Office for National Statistics reveal.

The oft-quoted £903bn figure for public sector net debt is a borrowing sum calculated by the ONS according to international standards.

But a broader set of ONS figures taking in Government liabilities show unfunded public service pension obligations could add another £1.2 trillion and liabilities in unfunded state pension schemes a further £1.35 trillion.

The Government's stakes in RBS and Lloyds account for an extra £1.5 trillion - leaving a debt mountain of £4.953 trillion once public sector net debt is added in.

The sum is almost four times the size of the UK's total gross domestic product in 2009.

Aileen Simkins, director of economic, labour and social analysis at the ONS, told Jeff Randall Live the data represented a "total balance sheet, looking at a wide range of liabilities".

As such they paint a more realistic - and starker - picture of the UK finances.

Mike Warburton, tax partner at accountants Grant Thornton, told Jeff Randall Live: "If I told you you're mortgage had just gone up by £200,000 you'd have a bit of a shock - but for the average household that is essentially what we're looking at in terms of the overall debt once you've taken it all into account."

Mr Warburton said it was unfair to count the bank stakes as liabilities as the assets could well turn a decent profit for the Government.

But he said the scale of pension liabilities was "the real killer".

"We're telling you the figures as they are at the moment, but.... we have an ageing population and in particular we've got a bulge of people - the so called baby boomers - born after the war and that bulk of the population is moving from the working population progressively into the retired population.

"The so-called dependency ratio... is going to move up over the next 30 years from about 25% to 45%.

"So if you think it's bad now, it is going to get worse. And I think the tragedy is this is a problem that's been known about for a long time."

Mr Warburton hailed the ONS' openness in presenting the data - but hit out at past governments for not facing up to the true scale of the debt problem.

"All governments (massage figures) and I don't want to be too political about it... but I'd have to say Gordon Brown was a past master at it - he was a master in stealth taxation and he was a master in making the numbers look the right way.

"Now you could say that's just clever accounting. On the other hand, I'm a great believer in transparency.

"We need to know what the figures are, and then at least we can tackle it."

http://news.sky.com/skynews/Home/Business/ONS-Total-UK-Balance-Sheet-Lays-Bare-Countrys-5-Trillion-Debt-Finances-Far-Worse-Than-Feared/Article/201007215665355?lpos=Business_First_Home_Article_Teaser_Region_9&lid=ARTICLE_15665355_ONS_Total_UK_Balance_Sheet_Lays_Bare_Countrys_%3F5_Trillion_Debt%3A_Finances_Far_Worse_Than_Feared

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Increased £1,000,000,000,000 since yesterday - that's not bad going.

God this is just like bidding for the Olympics the public get quoted one price and then suddenly security and other costs keep getting added which for some reason where never quoted in the original price.

Thank god this lot weren't builders.

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i aint paying ****** em

they'll find a way to get it out of us, they always do.

Increased £1,000,000,000,000 since yesterday - that's not bad going.

wonder what it would be next week.

but seriously, how its going to be sorted, we're in some serious mess here.

QE nuclear option.

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Yes but we have to continue spending how do you think Local Governments re Rochdale will pay for the for hole in the floor toilets for our Muslim friends and all our outreach diversity officers so needed in todays society.

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But he said the scale of pension liabilities was "the real killer".

That's easily solved :)

..................................

Question:- This mere £5 tril or so, are the LA pension liabilities a part of it??

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That's easily solved :)

..................................

Question:- This mere £5 tril or so, are the LA pension liabilities a part of it??

SSssshhhh... that's tomorrowss headline.

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SSssshhhh... that's tomorrowss headline.

would it double it ie £10 tril

just a stab in the dark, as trillions have no significance anymore.

we can print our own trillion pound notes like Zimbabwe, problem solved.

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The sum is almost four times the size of the UK's total gross domestic product in 2009.

Such a shocking revelation and virtually no reaction in the key markets: bonds, sterling and the FTSE.

Its one big yawn.

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The sum is almost four times the size of the UK's total gross domestic product in 2009.

Such a shocking revelation and virtually no reaction in the key markets: bonds, sterling and the FTSE.

Its one big yawn.

I suspect it's because they know nothing will be allowed to fail, given previous support. It's all so big that it's safe with the alternative being too dire to contemplate (for) now, so they'll keep trundling along, keeping up the pretence that it's business as usual.

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The sum is almost four times the size of the UK's total gross domestic product in 2009.

Such a shocking revelation and virtually no reaction in the key markets: bonds, sterling and the FTSE.

Its one big yawn.

the whole system is rigged

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http://www.telegraph.co.uk/finance/economics/7890803/Pimco-backs-UK-Government-on-debt-cut-plans.html

Pimco, the world's second largest bond house, has reversed its aggressive stance against the UK gilts, saying: "We do not expect the UK to fail in meeting its commitments". For sophisticated investors, Pimco added: "We believe exposure to the UK in the credit default swap (CDS) market offers a valuable opportunity."
The comments from Mike Amey, an executive vice-president, are in stark contrast to a warning at the start of the year from managing director Bill Gross that UK gilts were "resting on a bed of nitroglycerine" as a result of the nation's high debt levels. In April, Mr Gross reiterated that Britain remained on its list of "must avoid" countries with Greece.

PIMCO* must have written this tripe before the "Great debt revelation?" (GDR).

_______________________

*Mike and "Big" Bill Gross may not necessarily agree.

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http://www.telegraph.co.uk/finance/economics/7890803/Pimco-backs-UK-Government-on-debt-cut-plans.html

Pimco, the world's second largest bond house, has reversed its aggressive stance against the UK gilts, saying: "We do not expect the UK to fail in meeting its commitments". For sophisticated investors, Pimco added: "We believe exposure to the UK in the credit default swap (CDS) market offers a valuable opportunity."
The comments from Mike Amey, an executive vice-president, are in stark contrast to a warning at the start of the year from managing director Bill Gross that UK gilts were "resting on a bed of nitroglycerine" as a result of the nation's high debt levels. In April, Mr Gross reiterated that Britain remained on its list of "must avoid" countries with Greece.

PIMCO* must have written this tripe before the "Great debt revelation?" (GDR).

_______________________

*Mike and "Big" Bill Gross may not necessarily agree.

I am with Bill Gross on this.

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PIMCO* must have written this tripe before the "Great debt revelation?" (GDR).

No, because for PIMCO, and other professional investors, the realisation that the UK (and other leading nations) were carrying large amounts of off-balance sheet debt came sometime in

the last decade. When, you know, we were talking about it here and the MPs were passing the legislation to enable it in parliament. :rolleyes:

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No, because for PIMCO, and other professional investors, the realisation that the UK (and other leading nations) were carrying large amounts of off-balance sheet debt came sometime in

the last decade. When, you know, we were talking about it here and the MPs were passing the legislation to enable it in parliament. :rolleyes:

True, but do you think they were aware of the magnitude of the off-balance sheet debt Gordon was creating?

5TR is massive and must surely place us as the number one debt ridden nation on the planet--worse than even the previous record holders, Japan?

Is this why the BoE warned this week of credit tightening and harder to get loans?

The news must be hugely lagging as there has been no impact on key markets--if anything GILTS are dong better and the pound is rising strongly. The FTSE looks like it is at last starting to wobble.

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Guest Steve Cook

True, but do you think they were aware of the magnitude of the off-balance sheet debt Gordon was creating?

5TR is massive and must surely place us as the number one debt ridden nation on the planet--worse than even the previous record holders, Japan?

Is this why the BoE warned this week of credit tightening and harder to get loans?

The news must be hugely lagging as there has been no impact on key markets--if anything GILTS are dong better and the pound is rising strongly. The FTSE looks like it is at last starting to wobble.

When you are in the money the bank wants you to get into debt

When you are a bit in the red, the bank will make all kind of threats to get you to pay

When you are a lot in the red, the bank will invite you in for tea and biscuits because you are too big to fail

The monstrous debt that the UK is in is such that it cannot be allowed to fail. If it did the entire, global, debt-ridden house of card would fall with it. They will do anything to stop it.

Don't count on your deflation RB. Or, at least, if we do get a deflationary collapse, it will be far worse than yours or my worst nightmares.

Well, actually, my nightmares are pretty bad, so probably no worse than those....;)

Edited by Steve Cook

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Let's read the article and think about what it says for a change.

True, but do you think they were aware of the magnitude of the off-balance sheet debt Gordon was creating?

5TR is massive and must surely place us as the number one debt ridden nation on the planet--worse than even the previous record holders, Japan?

We'll start by looking at this quote:

"The oft-quoted £903bn figure for public sector net debt is a borrowing sum calculated by the ONS according to international standards. But a broader set of ONS figures taking in Government liabilities show unfunded public service pension obligations could add another £1.2 trillion and liabilities in unfunded state pension schemes a further £1.35 trillion."

So, the £1TR figure is based on using international standards, and by that measure the the UK isn't that bad. I think it's safe to assume that the UK is not the only country with pension commitments, and PFI-style arrangements (invented in the good-ole US of A I seem to remember). So it's doubtful we are another Japan or Greece.

Is this why the BoE warned this week of credit tightening and harder to get loans?

The news must be hugely lagging as there has been no impact on key markets--if anything GILTS are dong better and the pound is rising strongly. The FTSE looks like it is at last starting to wobble.

The news isn't news. Well, not to anyone with half a brain (or less). Let's study this part of the quote:

"But a broader set of ONS figures taking in Government liabilities show unfunded public service pension obligations could add another £1.2 trillion and liabilities in unfunded state pension schemes a further £1.35 trillion."

Now, a man who spends as much time on HPC as you do must surely have been able to spare some away from hysterically reporting on FTSE moves up/down 1% a day, and you would have eventually accidentally stumbled into one of the many threads about unfunded pension liabilities, in both the public and private sector.

At first, to the casual observer, this may seem like a terrible pickle - approximately £2.5TR in pension commitments with no money to meet them. Until you realise that these are the type of commitments that can be dealt with by a stroke of the pen.

Which is quite a coincidence as a stroke of the pen is exactly the way the government has started to deal with the problem, by increasing the age the state pension can be claimed, and by making moves to cut the number of people who will be able to get a public sector pension. If the worst comes to the worst, people like PIMCO know that pensions can be cut - when you are retired, it's rather difficult to withdraw your labour, the only "hard" negotiating tool open to most workers...

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When you are in the money the bank wants you to get into debt

When you are a bit in the red, the bank will make all kind of threats to get you to pay

When you are a lot in the red, the bank will invite you in for tea and biscuits because you are too big to fail

The monstrous debt that the UK is in is such that it cannot be allowed to fail. If it did the entire, global, debt-ridden house of card would fall with it. They will do anything to stop it.

Don't count on your deflation RB. Or, at least, if we do get a deflationary collapse, it will be far worse than yours or my worst nightmares.

Well, actually, my nightmares are pretty bad, so probably no worse than those....;)

good one.

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The sum is almost four times the size of the UK's total gross domestic product in 2009.

Such a shocking revelation and virtually no reaction in the key markets: bonds, sterling and the FTSE.

Traders get rewarded for (usually modest) gains, but don't get punished for catastrophic losses provided they all lose at the same time because thats "the market and there was nothing we could do about it", and ... its not their money they are gambling with. So they have very little to gain from keeping money out of the market since its yours and my money they are gambling with, not their own.

Edited by goldbug9999

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  • 145 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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