Tuesday, September 22, 2009
“Massive UK public-spending cuts, collapse of sterling or a strike by gilt buyers now inevitable”
William Littlewood, manager of the Artemis Strategic Assets fund, which gathered almost Â£150m during its offer period despite atrocious conditions, said the pound, the gilt market or the public sector "will go" after the government was forced to bail out the flailing capitalist system."The reason I don't like the pound is because of the broken finances in this country," he said. "You can't inflate your way out of Â£1,000bn in index-linked, contractually promised payments [to public sector employees]. Nor can you borrow Â£150bn-230bn without something at some stage giving. "For every Â£3 of revenue raised on taxes, the government is spending Â£4. This is a massive mismatch. The best you can hope for is going down the Japan route - you borrow and borrow, and the debt market doesn't care."