Thursday, July 16, 2009

Debt is set to double to 100% of GDP

IMF warns pound could be at risk from uncertainty

The International Monetary Fund (IMF) has warned that Gordon Brown risks a run on the pound if he does not set out a clear path for reducing national debt.

Posted by devo @ 10:59 PM (2122 views)
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14 thoughts on “Debt is set to double to 100% of GDP

  • I have complete confidence in Gordon Brown to make a complete mess of things.

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  • bidin'matime says:

    House prices have to get back to 3.25 x earnings and below – the government is determined to try to stop it – only outside forces can do it, so inevitably the start of ‘phase 2’ of the downturn has got to be a run on the pound.

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  • Not sure about the rest of you guys but I am really sick and tired of constantly having a 50cal pointed at my wealth.

    Part of me tries to ignore the possibility of Sterling going pop, probably because it seems too awful to imagine, but each time I hear of this Muppet Prime Minister trying to sustain the unsustainable the rational turns irrational and I fear the worst.

    The General Election is a long time away and this is the only event I can see changing the UK’s fortunes, as the Gambler at No.10 just seems hell bent on running the country into the ground.

    Can we avoid a run of the Pound before the Election? I really don’t know – we have a lot of debt to sell between now and then and who in their right mind would want to buy it?

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  • Part of me tries to ignore the possibility of Sterling going pop, probably because it seems too awful to imagine
    A lot of people have almost forgotten about the possibility of this, but if it comes it could happen in a single day…….

    The General Election is a long time away and this is the only event I can see changing the UK’s fortunes, as the Gambler at No.10 just seems hell bent on running the country into the ground.
    I am finding it very difficult to find the words to express the contempt I have for Gordon Brown, and almost all of the people I know, feel the same about this gross incompetent.

    Can we avoid a run of the Pound before the Election? I really don’t know – we have a lot of debt to sell between now and then and who in their right mind would want to buy it?
    If you are so worried, then diversify your money. Put some into Gold, Platinum, Euros even some dollars maybe (note the small ‘d’ on dollars!).

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  • I am a little surprised that Sterling has not already been thrown to the wolves.

    There are many economic similarities between the US and the UK, but also one big difference – I can see a way forward for the Americans, an exit route from the recession. They have the space, the resources and the skills to rebuild their manufacturing base, and to move their economy back into some sort of balance.

    But I just can’t see that here – we are too hung up about using what space we have, we have blown the North Sea revenues supporting multi-generational benefit dependants, and we have allowed the educational establishment to teach what it wants to teach, and not what needs to be taught. We have a bloated and over cushioned public sector that stifles every entrepreurial effort.

    And we don’t have politicians – on either side – who are ready to grasp the nettle of real change..

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  • “IMF warns pound could be at risk from uncertainty”

    Et voila, the pound further exposed by uncertainty.

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  • we have blown the North Sea revenues supporting multi-generational benefit dependants, and we have allowed the educational establishment to teach what it wants to teach, and not what needs to be taught

    Sounds like socialism…….

    So UT what currencies are you currently holding? Did you buy any Platinum in the end?

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  • A Dollar is defined in the Federal Reserve Act 1913 as a Federal Reserve Accounting Unit Dollar. Take the first letters? It spells FRAUD!!

    Is a pound, a pound of flesh?!

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  • @UncleT
    “we have blown the North Sea revenues supporting multi-generational benefit dependants, ”

    Is that really your analysis? Do you think we’d be some kind of Norway if we had a harsher welfare regime than the already hatred and suspicion based, miserly system we already have in place? Do you have much personal experience of this system (it doesn’t accord with mine) or on what evidence do you base this view?

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  • “IMF warns pound could be at risk from uncertainty”

    I am certain thats right.

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  • stillthinking says:

    If you accept that cuts today avoid harsher cuts tomorrow, then the only reason Brown won’t announce cuts is that he has no intention of ever doing so, and has an active intention to allow the pain to fall on sterling. He has renounced sound money already by rejecting responsibility for the exchange value of sterling.

    I think the only uncertainty is whether the existing 20-25% fall is appropriate. Sterling has actually already collapsed, and in the end being in an open global economy we will see a major loss of purchasing power. This is the weird way the economy is reported, kind of “if” sterling will collapse when it obviously has, it happened already, go to France and buy a ham butter sandwich if you don’t believe.

    The uncertainty is more about -when- we see the real consequences of the (already happened) collapse, and that is whenever, if ever, they manage to reflate the economy. To be fair, it isn’t much of a secret, King has made it very clear he wants to move to inflationary problems as they are preferable.

    25% devaluation is rather neatly 30% up on external prices. Which is a hell of a lot to deal with, but I think the key uncertainty is -not- further sterling devaluation, but when we get our noses rubbed in the existing devaluation. Which is very different.

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  • If you accept that cuts today avoid harsher cuts tomorrow, then the only reason Brown won’t announce cuts is that he has no intention of ever doing so, and has an active intention to allow the pain to fall on sterling. He has renounced sound money already by rejecting responsibility for the exchange value of sterling.

    I think Brown won’t admit to the economy needing cuts, because he has an election to win. Sure, sterling has devalued..but it has yet to collapse….

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  • Typical IMF: “Watch your expenditure but keep giving money to UK banks”.

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  • [email protected] – “I can see a way forward for the Americans, an exit route from the recession. They have the space, the resources and the skills to rebuild their manufacturing base, and to move their economy back into some sort of balance.”

    Previously the US economy has always appeared to me to be amazingly entrepreneurial and responsive, growth gets a little sluggish no problem – take income tax down a notch, light the blue touch paper and stand well back. Back on track within months.

    This time the problems appear to be different altogether . . . and it simply isn’t happening. US economy is looking more like the proverbial supertanker and, so far, showing no signs of being able to get back on course.

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