Saturday, January 24, 2009

How much worse can it get?

How much worse can it get?

"The risk is that we, and in particular our children, get saddled with well over £1 trillion of national debt without any real benefit to show for it – unless of course, so much new money is printed that we end up with inflation making a comeback in a few years time."

Posted by damien @ 12:23 PM (1005 views)
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5 thoughts on “How much worse can it get?

  • Well as a foreigner I been moving my savings out of the UK over the past couple of weeks, it nearly all out and in 2 months time I will be out of the UK. I feel sad for the UK folks who lives are built here and there history. It is going to be a really really tough time for many and I am not sure that the level of the boom will be felt again for many decades to come. The amount of money the government is borrowing is beyond belief. In my own view I think the UK could end up with an economy that represents or is similar to some of the eastern block states.

    I think the more important question for the UK and it citizens is that they need to ask themselves what type of society do they want. I’m afraid though that when you look back in history the UK has always been a boom and bust society. It has also had some important aspects to it history because boom and bust also does go hand in hand with entrepreneur culture. It is this culture that has contributed a lot not only to this country but else where as well.

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  • stillthinking says:

    The government is going into debt to make good the losses of the banks, why would there be any benefit? Should they invest more than the capital losses then they would be pouring money into UK PLC, which as everybody knows has been running at a loss for years. However, they haven’t even invested in UK PLC, I can see the point in fingers crossed on your own country, thus far all they have done is make good the banks losses. So no benefits for people in the UK.
    Hence the reasoning by so many that the UK is a busted flush, and will be so for a decade.

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  • I don’t think they’ve made good the losses have they? – my impression is still no one is sure how big they are. All the govt has done has given them enough money to keep them afloat, for the time being. But as we’ve seen, that is not the end of it. Should any of the main clearing banks fail I would guess it could mean economic curtains for us.

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  • How much worse? – A lot, we ain’t seen nothing yet.

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  • Ask Bob Chapman, and he suggests that we have seen deflation of asset prices, in real terms, for well over 5yrs now (In my opinion, since 2000, priced in gold). This, offset, on the face of it, only by printing of money the past few years. Well, US treasury money growth, and UK money growth went up a cliff this Autumn. Bob reckons we will see hyperinflation begin any time between March and June. That this will last until financial institutions have deleveraged and nobody will borrow anymore money. Then comes the deflationary death spiral as imploding derivative markets destroy all percieved wealth in pensions, savings, everything. The only ones left standing will be those who own gold or other real assets, outright. http://www.theinternationalforecaster.com

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