Budget 2017 - No spending sprees

[zugzwang]

30 minutes ago, slawek said:

Capital controls don't work, even China has lost 1 trillion (25%) foreign reserved in just 1-2 years.

You need capital to rebuild industrial base. Nobody will invest/lend money to a country like North Korea. 

Even if you manage this who is going to buy overpriced products made in the UK. 

There's plenty of evidence, recent and historical, in support of the idea that capital controls can help countries maintain independent monetary policy and reduce exchange rate volatility. Even the IMF has taken lately to recommending them.

China, on the other hand, is a doomsday machine. Nothing and no-one is going to save it from currency collapse.

 

Edited March 7, 2017 by zugzwang

[slawek]

6 minutes ago, zugzwang said:

There's plenty of evidence, recent and historical, in support of the idea that capital controls can help countries maintain independent monetary policy and reduce exchange rate volatility. Even the IMF has taken lately to recommending them.

China, on the other hand, is a doomsday machine. Nothing and no-one is going to save it from currency collapse.

 

Can you give me an example?

In short term capital controls can help stabilise the situation but in a longer term people will always find ways to get around restrictions and what worse new capital will avoid such countries.  

We agree then that China model with capital controls and cheap labour as a bait for foreign investment hasn't worked.

[spyguy]

2 minutes ago, slawek said:

Can you give me an example?

In short term capital controls can help stabilise the situation but in a longer term people will always find ways to get around restrictions and what worse new capital will avoid such countries.  

We agree then that China model with capital controls and cheap labour as a bait for foreign investment hasn't worked.

Because cash can flow into a economy very quickly, both in and out.

Fast flow in inflates assets as the capital stock does not have time to adjust.

Then it leaves, causing the capital stock to fall/collapse.

The phenomena has be seen for ages. More so now, with fiat money/post Bretton.

Let me think - Asian investment, London flats, etc.

Chinese is wierd. Has been for 5 years. China is generating a *lot* of cash/debt. Most of it seems to fleeing the country. Hard to tell as the Chinese economic figures are a political construct.

 

[slawek]

3 minutes ago, spyguy said:

Because cash can flow into a economy very quickly, both in and out.

Fast flow in inflates assets as the capital stock does not have time to adjust.

Then it leaves, causing the capital stock to fall/collapse.

The phenomena has be seen for ages. More so now, with fiat money/post Bretton.

Let me think - Asian investment, London flats, etc.

Chinese is wierd. Has been for 5 years. China is generating a *lot* of cash/debt. Most of it seems to fleeing the country. Hard to tell as the Chinese economic figures are a political construct.

 

I wasn't clear with my question, I asked for an example of a country where capital controls has worked in a longer term.

The original topic was how to make rich pay more without them leaving.  

[GrizzlyDave]

Rumour on the street is that he's coming after contractors.

rolling out the off-book public sector ir35 check into the private sector.

mmm lovely, full NI and IT like an employee and no employment benefits.

who pays their pension out of their net wages FFS!

[AvoidDebt]

17 minutes ago, GrizzlyDave said:

Rumour on the street is that he's coming after contractors.

rolling out the off-book public sector ir35 check into the private sector.

I mentioned this on another thread recently, didn't realise it would be so soon. Contractor BTL'ers, must be loads, start panicking NOW! 

 

[GrizzlyDave]

7 minutes ago, AvoidDebt said:

I mentioned this on another thread recently, didn't realise it would be so soon. Contractor BTL'ers, must be loads, start panicking NOW! 

 

I think it's unlikely to hit the private sector come April. But you never know.

I would need to put my rates up to compensate the extra tax. And close my Ltd, and we structure all my finances.

Then pay all my benefits (like my pension and private health) out of my NET wages. Nice. Full tax ZERO employment/worker benefits.

might as well go back to being a permie. Oh sh:t that's what they want, workers at the grind stone mortgaged up and silenced through learned helplessness.

[AvoidDebt]

I always thought it would be 2-3 years. Can't see them running a parallel system for long. 

All the recent threats about people leaving the public sector / raising rates might have forced them to act quicker. 

 

[The Knimbies who say No]

1 hour ago, hotairmail said:

The idea that we have a poor housing stock because we don't have enough 'money' is a broadly held fallacy.

It is because we "don't want" to have a premium housing stock. The rules make it so.

 

Keynes

 

In addition to the above, we have the economic madness of extending multiples of credit to price us out of living in decent homes. Take away the issue of credit and crash property to the levels they should be and we could vastly improve the housing stock.

 

Indeed, it is "too much money" that is pricing us out of decent housing....not that there is "not enough".

 

So, it is basically that pernicious combination of there being too much money pushing up house prices COMBINED WITH the fallacy of the accountant's spreadsheet telling us we can't afford to build sufficient decent homes that leave us where we are.

I must admit to being thoroughly ashamed of the U.K. Housing stock when watching an athletics road race last year. It went via suburbs in Cardiff and while not exactly the time of year to show off things at their best (wet winter) it was full of row after row of grubby shitty poverty-of-ambition hovels. Then I went outside and realised it was more or less replicated everywhere else.

Just no need for it aside Governbankment* keeping the boot on the windpipe of little people.

*h/t you-know-who.

Edited March 7, 2017 by The Knimbies who say No

[GrizzlyDave]

11 minutes ago, AvoidDebt said:

I always thought it would be 2-3 years. Can't see them running a parallel system for long. 

All the recent threats about people leaving the public sector / raising rates might have forced them to act quicker. 

 

If the mechanisms are in place - they could strike out and hit the private sector at the same time.

its the retrospective bit that is super harsh. Even if you put your rates up, if you've been milking a gig for a couple of years already and they stick you inside you could get a big retrospective tax bill.

contracting has been the only way to crawl out of the dog tulip swap of mess the greedy boomer generation have left. Might just leave the UK as permie brexit will suck.

[HairyOb1]

3 hours ago, GrizzlyDave said:

If the mechanisms are in place - they could strike out and hit the private sector at the same time.

its the retrospective bit that is super harsh. Even if you put your rates up, if you've been milking a gig for a couple of years already and they stick you inside you could get a big retrospective tax bill.

contracting has been the only way to crawl out of the dog tulip swap of mess the greedy boomer generation have left. Might just leave the UK as permie brexit will suck.

Rates will rise.  No one is going to be punished by IR35 and not up their rates.  I know of many contractors who have left PS work, and gone back at 30% more.

I also now know many more contractors are able to dictate the working conditions to keep them outside of IR35.  

If they did bring it into the private sector (which I think they'd struggle to), then rates go up, working practices change. When they brought out IR35, I think the industry collectively sh _ t themselves, but that was quickly fudged by clever agencies.  This will be too.  It's just putting up obstructions that you find a way out of.  I also happen to think that big business doesn't want to employ very highly skilled english technical staff full time, as we're too expensive as an employee, but much more affordable as a contractor.

I'm actually fairly relaxed about it.

If not, Germany and France, especially Frankfurt and Paris, will be looking fro an awful lot of IT staff

[GrizzlyDave]

9 minutes ago, HairyOb1 said:

Rates will rise.  No one is going to be punished by IR35 and not up their rates.  I know of many contractors who have left PS work, and gone back at 30% more.

I also now know many more contractors are able to dictate the working conditions to keep them outside of IR35.  

If they did bring it into the private sector (which I think they'd struggle to), then rates go up, working practices change. When they brought out IR35, I think the industry collectively sh _ t themselves, but that was quickly fudged by clever agencies.  This will be too.  It's just putting up obstructions that you find a way out of.  I also happen to think that big business doesn't want to employ very highly skilled english technical staff full time, as we're too expensive as an employee, but much more affordable as a contractor.

I'm actually fairly relaxed about it.

If not, Germany and France, especially Frankfurt and Paris, will be looking fro an awful lot of IT staff

I would go inside IR35, but I think 50% rate uplift would be needed for the extra tulip.

I know there is zero sympathy about for contractors who take every opportunity to minimise their tax liability.

[HairyOb1]

18 minutes ago, GrizzlyDave said:

I would go inside IR35, but I think 50% rate uplift would be needed for the extra tulip.

I know there is zero sympathy about for contractors who take every opportunity to minimise their tax liability.

In all fairness, 30% would be grand as you're pretty much going to be taking home the rest.

As for the zero sympathy, I don't think many of us have either wanted it, or cared about it.  Once the banks started, the politicians started I made a conscious decision (2009) to start playing the game everyone else was.  It's worked well for 8 years, stashed well over 400k in pensions for my wife and I, topped by by 160k of government money and enjoyed it all, always outside of IR35.

If ti changes, I change my model.  If I can't, I'm still going to be enjoying a wage significantly higher than I would have as a permie.

[GrizzlyDave]

3 minutes ago, HairyOb1 said:

In all fairness, 30% would be grand as you're pretty much going to be taking home the rest.

As for the zero sympathy, I don't think many of us have either wanted it, or cared about it.  Once the banks started, the politicians started I made a conscious decision (2009) to start playing the game everyone else was.  It's worked well for 8 years, stashed well over 400k in pensions for my wife and I, topped by by 160k of government money and enjoyed it all, always outside of IR35.

If ti changes, I change my model.  If I can't, I'm still going to be enjoying a wage significantly higher than I would have as a permie.

I'm new to the game, this is my fourth year at contracting. I was in a safe and boring permie role with fantastic pay and benefits (should get £9k a year pension at 60). I walked because I've got more in me than that. I had commitments I needed to see through before I flew the nest, but couldn't take the permie grind a day longer!

It's been a good ride. Delivered work at six different clients so far, with multiple extensions. Made shed loads of contracts (and money), hugely raised my profile. Managed a business from finance to branding and advertising and Tendering/collaborating for work. Gone to conferences of my choice and really worked on brand GrizzlyDave. I've had juicy permie offers but nothing to tempt me back (yet). It's leap frogged me ahead in terms of my career.

I really want to get the mortgage paid off, have a float, and then do something local. A couple more good years that's what I am hoping to get from contracting. Just keep the wheels on until then.

I think brexit combined with the real depression crash we have avoided is going to be calamitous. My bug out bag is ready. Will watch with morbid fascination the disaster unfold.

 

[Democorruptcy]

6 hours ago, The Knimbies who say No said:

I must admit to being thoroughly ashamed of the U.K. Housing stock when watching an athletics road race last year. It went via suburbs in Cardiff and while not exactly the time of year to show off things at their best (wet winter) it was full of row after row of grubby shitty poverty-of-ambition hovels. Then I went outside and realised it was more or less replicated everywhere else.

Just no need for it aside Governbankment* keeping the boot on the windpipe of little people.

*h/t you-know-who.

LOL.

[Bruce Banner]

25% Stamp Duty increase, to start at a future date, to get the housing market moving again. It can always be reversed before it actually comes in.

[rantnrave]

First budget or update for a while I can remember which there isn't rampant speculation about some property market tinkering...

[HairyOb1]

43 minutes ago, rantnrave said:

First budget or update for a while I can remember which there isn't rampant speculation about some property market tinkering...

Funny enough, just read the news which said 'extra help expected for first time buyers, expect tinkering on that policy...

Strangely, according to my accountant, I am now considered a first time buyer, since I sold my house so long ago!

[zugzwang]

1 minute ago, HairyOb1 said:

Funny enough, just read the news which said 'extra help expected for first time buyers, expect tinkering on that policy...

Strangely, according to my accountant, I am now considered a first time buyer, since I sold my house so long ago!

Wouldn't be a Tory budget without some kind of house price ramping inducement. And something 'to help hardworking people do more of the things they enjoy', as Grant Schapps famously described the bingo+beer tax reduction in 2014.

 

[HairyOb1]

1 minute ago, zugzwang said:

Wouldn't be a Tory budget without some kind of house price ramping inducement. And something 'to help hardworking people do more of the things they enjoy', as Grant Schapps famously described the bingo+beer tax reduction in 2014.

 

I can't think what more they can do.

I am close getting to the stage that if they do ramp it more, that when there is a crash, they'd be debt forgiveness of some kind on it all.

Starting to get to the stage of 'if you can't beat them...'.

I think I need a drink and a lie down....

[rollover]

Guardian

[btd1981]

20 minutes ago, HairyOb1 said:

Funny enough, just read the news which said 'extra help expected for first time buyers, expect tinkering on that policy...

Strangely, according to my accountant, I am now considered a first time buyer, since I sold my house so long ago!

How long ago is that? In my adult life the only time I've owned a place is while prices were falling, so being excluded from government incentives even though owning cost me dear has added insult to injury.

[crashmonitor]

23 hours ago, hotairmail said:

The idea that we have a poor housing stock because we don't have enough 'money' is a broadly held fallacy.

It is because we "don't want" to have a premium housing stock. The rules make it so.

 

 

A lot of the Government thinking on home quality seems to centre arrange energy efficiency, major upgrading when actually you could just put a jumper on. A £2,000 energy user with all the installations gets a gold medal and a £500 user with none gets castigated.

Some of the crap they have done to homes is short term with long term consequences. Not least cavity wall insulation put into the wrong type of homes causing major damp issues to at least quarter of the installations.

Another barmy scheme now is spraying the underside of supsended wooden flooring. No real thought to the longterm consequences of not allowing wood to breath, just vandalism imo.

But even if these installations are done to the right house, they will deteriorate after 50-100 years, cavity wall will go to mush. Yet we build houses to last 500 years, so what cost when you have to extract the crap.

As usual short term solutions, like the  social housing built in the 60s and 70s and now being demolished.

The government intervention in housing is usually disastrous.

[The Knimbies who say No]

1 minute ago, zugzwang said:

Wouldn't be a Tory budget without some kind of house price ramping inducement. And something 'to help hardworking people do more of the things they enjoy', as Grant Schapps famously described the bingo+beer tax reduction in 2014.

 

Indeed. I just don't think they can leave HPI ramping alone. 

Well remembered about the bingo and beer too. Patronising so and sos.

 

 

[crashmonitor]

9 minutes ago, The Knimbies who say No said:

Indeed. I just don't think they can leave HPI ramping alone. 

 

 

 

A guy on the BBC yesterday said he was hoping for more incentives so his kids could afford a house. Now is this guy being  stupid, incentives cause house prices to rise, or is he thinking yeah this will inflate the price of my home and sod the kids. I've even heard the same said by would be  ftbs who have fallen for the media and government propaganda.

Edited March 8, 2017 by crashmonitor