'britain Is Totally Insolvent'

[Realistbear]

But Britain is at the nexus of the global banking empire. The recent revelations of Federal Reserve transactions in 2008 ($12.3 trillion) confirms this. American mega-banks see the City as the place to be, for international ponzi operations.

And never have the banks been so awash with liquidity, for free.

In a nutshell. And the new landlord class is fed by the overflow of that cheap money. If we get a real HPC it may be a generation away when the banksters tire of London or we get another Cromwell to shake things up on behalf of the masses who are exploited by foreign overlords.

Am I the only Bear seeing the hopelessness of the HPC cause?

[gimble]

Britain is indeed totally insolvent.

Noth Sea Oil revenue is drying up and, apart from importing parts and assembling them with a"Made In Britain" badge slapped on them, we don't have a manufacturing base anymore. In any event, the things we do "manufacture" tend to be the higher-end items as the essential consumer items can be assembled much cheaper elsewhere (Chindia et al). As things stand in the world economy, the only things that the rest the world's consumers are going to be wanting in the coming period are essentials anyway.

I'm sick of hearing this. It is just plain wrong. Just because all the cheap tat in Argos is made in China and you car is German doesn't mean nothing is made here. And yes, we do still have a worryingly big trade deficit. But open your eyes. One Rolls Royce jet engine is worth a hundred BMWs. The UK's absolute real value manufacturing output is close to the highest its ever been. The main thing holding back making stuff in the UK was an overvalued currency - that problem is fixed and guess what, manufacturing is now growing at its fastest rate in 16 years.

We can't go it alone. We don't have anything to sell and we owe far more than we are owed.

In addition to all of the above, we are so overcrowded we couldn't even feed ourselves anymore if push came to shove.

Singapore, Hong Kong, Japan - none of these places can 'feed themselves'. For that matter London, Coventry, Glasgow any town or city you care to mention can't 'feed itself' - the way we get around this problem is something called trade. It's been going on for 1000s of years. If the British population find themselves short of food at any time in my lifetime I will eat my hat. ARF

[The Eagle]

But if we accept this country has weathered the storm BETTER than any of our peers I don't think a knighthood would go amiss.

You are joking, right?

If not, then you are blinded by propaganda, the UK is still in much deeper shit than most european countries, even Italy is better of than the UK, not to mention Germany, the Netherlands, Svizerland where the economy is booming again (Switzerland is back down to 3.5% unemployment...).

Don't believe all the crap you read in the UK/US news, look across the border, travel more (not just to Spain).

[long time lurking]

Not true, we're flogging a couple of old aircraft carriers. They'll be on UKPLCs ebay account soon - maybe they'll give us a 'Gold Seller' rating. :lo

[url=http://*******.com/37vkqo4'>My link

Edited December 8, 2010 by long time lurking

[tallguy]

I'm sick of hearing this. It is just plain wrong. Just because all the cheap tat in Argos is made in China and you car is German doesn't mean nothing is made here. And yes, we do still have a worryingly big trade deficit. But open your eyes. One Rolls Royce jet engine is worth a hundred BMWs. The UK's absolute real value manufacturing output is close to the highest its ever been. The main thing holding back making stuff in the UK was an overvalued currency - that problem is fixed and guess what, manufacturing is now growing at its fastest rate in 16 years.

Singapore, Hong Kong, Japan - none of these places can 'feed themselves'. For that matter London, Coventry, Glasgow any town or city you care to mention can't 'feed itself' - the way we get around this problem is something called trade. It's been going on for 1000s of years. If the British population find themselves short of food at any time in my lifetime I will eat my hat. ARF

Show me the total contribution to UK GDP for manufacturing that is not based on merely assembling components produced elsewhere, is not based on service-sector "production" that merely redistributes existing wealth within the system and is not based on finance but is, in fact based on primary production.

You know...the stuff that generates real wealth....

Edited December 8, 2010 by tallguy

[DungBeetle]

Britain is indeed totally insolvent.

Noth Sea Oil revenue is drying up and, apart from importing parts and assembling them with a "Made In Britain" badge slapped on them, we don't have a manufacturing base anymore. In any event, the things we do "manufacture" tend to be the higher-end items as the essential consumer items can be assembled much cheaper elsewhere (Chindia et al). As things stand in the world economy, the only things that the rest the world's consumers are going to be wanting in the coming period are essentials anyway.

We can't go it alone. We don't have anything to sell and we owe far more than we are owed.

In addition to all of the above, we are so overcrowded we couldn't even feed ourselves anymore if push came to shove.

High-end items can support an economy (Mercedes, VW, BMW anybody?)

We're not overcrowded, and we have so much unused farm land.

It requires a mindset change, we have the fundamentals available to us - we just have to use them.

[tallguy]

High-end items can support an economy (Mercedes, VW, BMW anybody?)

Provide the contribution to GDP of high end items. Otherwise this is a meaningless assertion

We're not overcrowded, and we have so much unused farm land.

Do you know how many acreas of modern famland it takes to feed a person? You might want to look it up and then look up how much arable farmland there is in this country when compared to the population size.

It requires a mindset change, we have the fundamentals available to us - we just have to use them.

Rhetoric

[MrFlibble]

Do you know how many acreas of modern famland it takes to feed a person? You might want to look it up and then look up how much arable farmland there is in this country when compared to the population size.

Yeah and we haven't even started growing fuel on this land either. Just wait until the oil supplies get too low and we make the tragic choice to keep all the cars running instead of feeding ourselves.

[headrow]

We can't go it alone. We don't have anything to sell

So where are all these chemicals going that we keep putting in these ships that keep returning to our ports?

In fact i'd say we are loading more now than we were pre 2007.

[Harry in Germany]

I'm confused. Is the UK effectively insolvent and in real trouble or are we a shining economic example to the world with a dynamic manufacturing and services industry, lucky enough to have had a genius in charge through the storm?

[tallguy]

So where are all these chemicals going that we keep putting in these ships that keep returning to our ports?

In fact i'd say we are loading more now than we were pre 2007.

Which chemicals and where do those chemical originate?

[Traktion]

I'm sick of hearing this. It is just plain wrong. Just because all the cheap tat in Argos is made in China and you car is German doesn't mean nothing is made here. And yes, we do still have a worryingly big trade deficit. But open your eyes. One Rolls Royce jet engine is worth a hundred BMWs. The UK's absolute real value manufacturing output is close to the highest its ever been. The main thing holding back making stuff in the UK was an overvalued currency - that problem is fixed and guess what, manufacturing is now growing at its fastest rate in 16 years.

Singapore, Hong Kong, Japan - none of these places can 'feed themselves'. For that matter London, Coventry, Glasgow any town or city you care to mention can't 'feed itself' - the way we get around this problem is something called trade. It's been going on for 1000s of years. If the British population find themselves short of food at any time in my lifetime I will eat my hat. ARF

Good post.

Now that interest rates have anchored themselves close to zero and yield is hard to come by, little hot money is going to flow into the UK, forcing up the strength of the pound (remember, you usually need to buy Sterling, in order to buy investments here).

The game has changed and, probably much to the annoyance of the developing world, the developed world is surely going to become increasingly competitive again. If there is (safe) yield to be had in the developing world, no doubt this will put further pressure on Sterling, in turn helping manufacturing here and reducing the trade deficit. If our skills are our main selling point, this should offset the (EDIT: increasing) cost of raw materials.

What can the developing world do to prevent this? Very little, I should imagine - they need to adapt to the new game, whether they like it or not. As more and more yield is squeezed out of the global economy, it is bound to push wealth from the rich and towards the poor... maintaining wealth now seems to be the challenge for the rich in this new game, with the poor nibbling at their heals.

I would have liked to see a more risk exposure to the wealthy during the recent crisis, but in the long run, I think the majority of us will benefit regardless (at the macro level). In the short/medium term, it looks like the middle classes will be paying for the mistakes of the wealthy though.

Edited December 8, 2010 by Traktion

[Scott Sando]

According to this document the UK has a real dept of £10 trillion http://www.hindecapital.com/docs/hil_reports/Debt_No%20Jubilee7.pdf

[wonderpup]

Does manufacturing now = jobs though? I keep seeing footage of factories on TV full of machines and a few guys wondering about inside- not hundreds of people on assembly lines.

I take the point about the value added by an RR jet engine, but this is not the stuff of mass employment. GDP is fine, but that won't tell us how the wealth is being distributed.

[Tired of Waiting]

indeed, but it is consumer debt, not corporate or govt debt

individuals have to pay this, I do not (providing I protect myself from inflation)

these people are hamsters on the wheel for the next 20 years working at the companies paying the dividends on my FTSE shares, basically paying off mortgages and credit cards

We were at 500%+ in 1946, so we will cope again with an era of austerity the debt isn't especially high, and of course we are not suffering from a post war Keynsian concensus right now - this time you can side-step the problems by simply not being a debtor,

I remember seeing similar stats in the Economist, and the opinion was more upbeat, over a period of multiple decades - the basic issue is that we have an opportunity to revise our outdated public services and economy, which has a much bigger impact than debt alone

and of course we are devaluing the pound

The link in the OP takes to a news article with this link in it: http://www.economist.com/blogs/buttonwood/2010/06/indebtedness_after_financial_crisis

I think I recognise this "460%". It sounds like the old (published in Jan 2010, with data til 2008, IIRC) Mckinsey total debt. If so, it included the 3 of them: Gov. + Households + Companies.

Edit: If it will impact on those of us who are debt free, I think it depends on how much of that debt is owed to foreign creditors, in case the interests and capital repayment will have to go out of the UK eco. I've seen some numbers suggesting 30% is owed to foreigners. But I don't have data enough (numbers, timing, debt "profile" etc.) or am familiar enough with econometrics to estimate the impact of all this. Besides, the social and political aspects make any maths very unreliable.

http://www.economist.com/blogs/buttonwood/2010/06/indebtedness_after_financial_crisis

Edited December 8, 2010 by Tired of Waiting

[Traktion]

indeed, but it is consumer debt, not corporate or govt debt

individuals have to pay this, I do not (providing I protect myself from inflation)

these people are hamsters on the wheel for the next 20 years working at the companies paying the dividends on my FTSE shares, basically paying off mortgages and credit cards

We were at 500%+ in 1946, so we will cope again with an era of austerity the debt isn't especially high, and of course we are not suffering from a post war Keynsian concensus right now - this time you can side-step the problems by simply not being a debtor,

I remember seeing similar stats in the Economist, and the opinion was more upbeat, over a period of multiple decades - the basic issue is that we have an opportunity to revise our outdated public services and economy, which has a much bigger impact than debt alone

and of course we are devaluing the pound

It seems a rather odd statistic anyway - if there is consumer debt, there is matching consumer credit somewhere. They may as well quote that M4 money being very high is a problem. I rarely here people saying there is 'too much broad money', but often that there is 'too much debt'.

If there is negative demand for our debt, consumer or national, on the international markets, then Sterling will surely weaken as demand (to invest in UK paper) dries up.

Ignoring the international implications, within the national market for debt, high consumer debt isn't necessarily a problem either. If there are few creditors and many over stretched debtors, there is a problem of imbalance (which we should be worried about, IMO), but the headline debt figure is pretty meaningless.

[AThirdWay]

Does manufacturing now = jobs though? I keep seeing footage of factories on TV full of machines and a few guys wondering about inside- not hundreds of people on assembly lines.

I take the point about the value added by an RR jet engine, but this is not the stuff of mass employment. GDP is fine, but that won't tell us how the wealth is being distributed.

The RR manufacturing process is very labour intensive actually, it has to be due to the complexity (and hence, value) of the end product. Even the modern car manufacturing production line employs far more than you see in the footage on TV. They take bodies off the line when cameras are in, trying to prove something or other.

Manufacturing support is also a considerable 'overhead', generating jobs.

There are also the jobs required to feed the manufacturing beast, such as power and water supplies, transportation, (whisper it!) house building etc. These jobs have no effect on the trade gap as such, but they have a massive effect on the local area.

[headrow]

Which chemicals and where do those chemical originate?

Croda.

[babesagainstmachines]

Show me the total contribution to UK GDP for manufacturing that is not based on merely assembling components produced elsewhere, is not based on service-sector "production" that merely redistributes existing wealth within the system and is not based on finance but is, in fact based on primary production.

You know...the stuff that generates real wealth....

I understand where you are coming from now. You think the bigger the telly you have, the better off you are.

[tallguy]

I understand where you are coming from now. You think the bigger the telly you have, the better off you are.

My thinking couldnt be more oposite to your depiction it

[Guest spp]

He sold the $ just before the Euro and £ tanked. He was negative on US bonds while they had their biggest rally in history.

I hold $ and only recently sold a heavy investment in US bonds.

If only Jimbo wasn't such a fool.

Is Gold/Silver call is doing pretty well though!