British Financial Crisis

[TheCountOfNowhere]

We've had the US sub-prime financial crisis.

We've had the Irish crisis, the Greek one, italy are teetering on the brink....however, are we due the British one.

Sure, we had the Northern rock, Halifax collapse etc, but Gordon sorted all that our, was a mere blip.

Will we see a real British financial crisis, IMF forcing cuts, bond prices shooting up, bankers jumping out of windows, that sort of thing ?

Or have we had ours and it cant get much worse ( bar the inflation and austerity ) ?

It looks to me like the spending is continuing. The government give in to every man and his dog that complain about the cuts. Public sector salaries, not dealt with, public sector pensions, not dealt with, public sector, not dealt with. Bankers bonuses, not dealth with, banks debts, not dealt with, Banks, not dealt with.

How long can we go on.

[Maggot_with_halitosis]

The short answer is yes.

[Executive Sadman]

Isnt the maturity date on uk debt something like 5 or 6 years behind greek debt?

So i guess then. I suppose much of it is fixed rate maybe so low interest payments are just about keeping our heads above water.

[scottbeard]

Will we see a real British financial crisis, IMF forcing cuts, bond prices shooting up, bankers jumping out of windows, that sort of thing ?

Or have we had ours and it cant get much worse ( bar the inflation and austerity ) ?

Well, we will have EITHER a crash OR austerity.

Basically, it depends upon whether other countries fall apart before 2015 or not.

If they do, the benefits of austerity will be clear, Conservatives re-elected, welcome to the 1930s deflationary depression

If they don't, Labour will be elected promising the undeliverable, then we get a crash, welcome to the 1970s inflationary depression

[TheCountOfNowhere]

Well, we will have EITHER a crash OR austerity.

Basically, it depends upon whether other countries fall apart before 2015 or not.

If they do, the benefits of austerity will be clear, Conservatives re-elected, welcome to the 1930s deflationary depression

If they don't, Labour will be elected promising the undeliverable, then we get a crash, welcome to the 1970s inflationary depression

And if the euro-zone cracks up before Xmas ?

[bingobob]

Isnt the maturity date on uk debt something like 5 or 6 years behind greek debt?

So i guess then. I suppose much of it is fixed rate maybe so low interest payments are just about keeping our heads above water.

Thinking about it, I assume that steps will need to be taken to strengthen sterling ahead of the debt renewal date? It will be difficult negaotiating new terms on our debt when we've effectively defaulted to the tune of 30% on any intenational loans.

Edited November 8, 2011 by bingobob

[scottbeard]

And if the euro-zone cracks up before Xmas ?

If you mean a few PIIGS defaulting and leaving (which i think is quite likely to happen - but more like next year) then we'll see RBS and LTSB fully nationalised, and austerity life goes on as now.

If you mean the entire break up of the Eurozone, I don't know.

But I think the timescales for all this stuff will be seriously drawn out. After all, we are FOUR YEARS into the credit crunch, and three since Lehman, with no discernible direction or way out yet.

May 2015 election is only three and a half years away. Greece will be gone by then, but we could still be seeing Italy limping on.

[TheCountOfNowhere]

If you mean a few PIIGS defaulting and leaving (which i think is quite likely to happen - but more like next year) then we'll see RBS and LTSB fully nationalised, and austerity life goes on as now.

If you mean the entire break up of the Eurozone, I don't know.

But I think the timescales for all this stuff will be seriously drawn out. After all, we are FOUR YEARS into the credit crunch, and three since Lehman, with no discernible direction or way out yet.

May 2015 election is only three and a half years away. Greece will be gone by then, but we could still be seeing Italy limping on.

i'd tend to agree with that. They will continue to fudge it until...further notice. It is going to take a BIG event to get them to change their ways. That change will involve a MASSIVE DEPRESSION as far as I can see.

[tomandlu]

I'm reminded of the joke about the two hunters running from the lion... basically a depression is unavoidable, but if we can put it off until the wheels fall off the PIIGS, etc. then we may escape an individual crisis.

That said, it's the equivalent of taking comfort in being near ground-zero during a nuclear attack on the basis that it will kill the snipers aiming at you from the surrounding buildings...

[TheCountOfNowhere]

I don't think many would disagree that there will be a crisis of some description.

that begs the question.....if you take out a 25 year mortgage now and stretch yourself to buy ( at these once in a lifetime bargain price ) with interest rates at 0.5%....do you honestly believe you will manage to keep working long enough to pay the mortgage off or stave off repossession during lean times.

[Executive Sadman]

I don't think many would disagree that there will be a crisis of some description.

that begs the question.....if you take out a 25 year mortgage now and stretch yourself to buy ( at these once in a lifetime bargain price ) with interest rates at 0.5%....do you honestly believe you will manage to keep working long enough to pay the mortgage off or stave off repossession during lean times.

I agree its a 'when' not 'if' thing.

My view is will the EU do for us what we have done for them. The billions of support. My guess is no.

The will be an ultimatum. Join the Euro, no referendum, no choice and we'll 'save' you.

I dont believe for one minute these predictions the Euro will be destroyed. The NWO has been building up to it for centuries. Even if half the population of Europe starved because of it, they would still support it. One world currency, one world government is their goal.

[The Masked Tulip]

I don't think I am the only one on here who is seeing no signs of any economic policy by the Govt to encourage business growth and generate jobs.

Judging by the radio phone-ins loads of the general public have come to the same conclusion.

[TheCountOfNowhere]

I don't think I am the only one on here who is seeing no signs of any economic policy by the Govt to encourage business growth and generate jobs.

Judging by the radio phone-ins loads of the general public have come to the same conclusion.

Quite...This week two friends of mine have had bad news work wise:

One, Contract terminated , the other lost biggest customer, bricking it now !!! He's the one I talked about 18 months ago, bought a house for his familly ) after the agent convinced him to rent his flat out ( because he'd never sell it ), mortgage debt standing around £250K ish ( I estimate ), income, 1/8th of that. He a top chap, so I hope he survives but the agent would have been better selling his flat for 50% less and him buying for 50% less.

Still the agent got his fee regardless and their monthly letting fee, so that's okay.

I think this sort of scenario will become more common very very very soon.

[ska_mna]

The first responsibility of government is to release resources to the private sector...money, people etc.

But then they need an effective long term industrial policy. I am less worried about 'growth' than the quality of that growth. How will we pay our way in the world for instance - for therein lies the root causes of our problems.

Applying sticking plasters to Labour's gross mismanagement will make things worse. The best you can say is that you appear to make it all less painful by stringing it all out. I think personally I would prefer a short sharp shock and hey presto we're growing again after the forest fire. I think consumption and gdp is much overrated.

+1

My worst fear is that they'll manage to stabilise things, the problems will be out of the headlines and they'll be able to carry on with economic Plan A from the last 30 years. Just look at the banking reforms being pushed back to 2019.

I'm happy if the plan is to try and stabilise the current broken system so that a transition to a new economic model can be made in a stable environment step by step (it can't happen overnight).

But I fear it's just a game of kick the can at the moment. If that's the case, I'd rather take the shock treatment now.

[TheCountOfNowhere]

The first responsibility of government is to release resources to the private sector...money, people etc.

But then they need an effective long term industrial policy. I am less worried about 'growth' than the quality of that growth. How will we pay our way in the world for instance - for therein lies the root causes of our problems.

Applying sticking plasters to Labour's gross mismanagement will make things worse. The best you can say is that you appear to make it all less painful by stringing it all out. I think personally I would prefer a short sharp shock and hey presto we're growing again after the forest fire. I think consumption and gdp is much overrated.

And the BoE's outdated policy of devaluing to help exports is totally wrong...the things we sell/can sell are not based on cost and it is better for us to be able to import things more cost effectively. The balance of payments has only been helped thus far by impoverishing us and generating inflation- that's not good.

Increasingly I see the only solution is deflation...population deflation, price deflation, continued house price deflation. I am not a hippy and I think the whole "climate change" movement is a politically motivated nonsense for the benefit for some VI or another, however, the sustainability side of t hat coin really is an issue. Limited resources, limited food, limited space, quality of life...we need a balanced sustainable population. Even the most idiotic of farmer knows not to put too many sheep in one field. !!!

Edited November 8, 2011 by TheCountOfNowhere

[Democorruptcy]

And the BoE's outdated policy of devaluing to help exports is totally wrong...the things we sell/can sell are not based on cost and it is better for us to be able to import things more cost effectively. The balance of payments has only been helped thus far by impoverishing us and generating inflation- that's not good.

They are not devaluing to help exports. They are devaluing to help imports, of foreign money to buy London houses, to try protect the wealth of the asset rich and banks. If they were interested in helping exports manufacturng would be doing better than this:

Index of production for manufacturing was 100.5 in Q2 2007, 92.1 in Q2 2011.

Output index for business services & finance was 105.0 in Q2 2007, 104.7 in Q2 2011.

[scottbeard]

I don't think many would disagree that there will be a crisis of some description.

that begs the question.....if you take out a 25 year mortgage now and stretch yourself to buy ( at these once in a lifetime bargain price ) with interest rates at 0.5%....do you honestly believe you will manage to keep working long enough to pay the mortgage off or stave off repossession during lean times.

Even in the Great Depression 75% of people had a job, and it's people nearest retirement in most danger of being laid off.

So no guarantees, but odds seem good.

[Sour Mash]

Increasingly I see the only solution is deflation...population deflation, price deflation, continued house price deflation. I am not a hippy and I think the whole "climate change" movement is a politically motivated nonsense for the benefit for some VI or another, however, the sustainability side of t hat coin really is an issue. Limited resources, limited food, limited space, quality of life...we need a balanced sustainable population. Even the most idiotic of farmer knows not to put too many sheep in one field. !!!

Rampant money printing will ensure that deflation doesn't stick. That's one big reason why the banksters just lurrrrrve unbacked fiat currency.

[TheCountOfNowhere]

Even in the Great Depression 75% of people had a job, and it's people nearest retirement in most danger of being laid off.

So no guarantees, but odds seem good.

Was that 75% of men, or did women suddenly start working to make ends meet ?

Rampant money printing will ensure that deflation doesn't stick. That's one big reason why the banksters just lurrrrrve unbacked fiat currency.

Hyperinflation it is then...that will solve nothing but to get rid of the bankers during the next big war.

Edited November 8, 2011 by TheCountOfNowhere

[scottbeard]

Rampant money printing will ensure that deflation doesn't stick. That's one big reason why the banksters just lurrrrrve unbacked fiat currency.

Surely bankers hate hyperinflation - they lend out money that's worth something and get nothing back in return?

Meanwhile no-one wants to deposit money in a bank, since they want to spend it

[TheCountOfNowhere]

Surely bankers hate hyperinflation - they lend out money that's worth something and get nothing back in return?

I am sure they do.

What happened to the bankers/banks in Germany after the hyper-inflation, does anyone know ?

Edited November 8, 2011 by TheCountOfNowhere

[Bloo Loo]

IIRC , some Government bod said we were well placed to weather the storm, which started in Amerwica, and our hard working families will be rewarded.

[TheCountOfNowhere]

IIRC , some Government bod said we were well placed to weather the storm, which started in Amerwica, and our hard working families will be rewarded.

What...with cheaper houses ?

[LC1]

Even if half the population of Europe starved because of it, they would still support it. One world currency, one world government is their goal.

Sadly I think this is probably true. Whether they will be able to avoid/prevent/supress mass protest & civil disobedience is another matter...

[Gigantic Purple Slug]

IMO the euro sh*tstorm is great political cover.

"It started in Europe" will be the excuse. The public will buy it as well.

George and Dave making a lot of noise about the europeans getting their house in order. But it's obviously all going to go down the pan. That's great for them, because they can blame the ensuing chaos on the rest of Europe without taking the blame themselves.

Smoke and mirrors.

I think it's going to work.