Gideon's Sum Book - Nought out of Ten!

Why was the figure of seven billion pounds significant last month, figures released yesterday showed the UK deficit for last month as £23.3 billion pounds, truly awful and around seven billion pounds higher than the generally agreed expectations, read here. Seven billion pounds was also the amount that Chancellor Gideon George Osborne loaned to Ireland to help our close neighbours in that sticken country the bankers facing ruin given the doomed state of the euro. Seven billion was also the rough estimate of the increased contibutions Blair gifted the EU for zero return in his doomed attempt to be EU Council President.

So much for the Coalition Government's accomplishments in spending, what about the much talked about, but never seen, cuts? Well on the first shopping day of the New Year VAT will rise by 2.5% estimated on Gideon's slate to bring in £13 billion in a full year, read here. Harriers and HMS Ark Royal are going, presumably to the huge satisfaction of all Liberal Democrats, but little else.

What should have been accomplished by the end of the Coalition's first months in power should have been something along the lines of what I spelt out at the time of the budget in April 2009, linked here, which I repeat in full as it is so basic and obvious it should not need repeating, but with the mind-boggling deficit announced yesterday perhaps its plain common sense will now be seen even by our kindergarten poltical dimwits. (Note some links may no longer work):

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Britain's Debts of Trillions requires ACTION Now!
By the time one strips out the ridiculous optimism of Demented Darling's economic growth projections, add in the IMF identified missing 140 billion pound bank bail out costs and recall that the City of London bears a large part of responsibility for the Global Recession making decent tax revenues from that source unlikely over the coming years any idiot should be able to see that action on public spending is needed TODAY.

The Times has a good budget summary linked here.

Instead of rushing to meet Brown to discuss Daily Allowances for our maggot Members of Parliament (oh what a typical move was that) the Leaders of the two opposition parties should have been demanding early action on the rising debt IMMEDIATELY.

First should come a ceiling on all salaries paid by the taxpayers from 1st May for 2 years at the national average income for the last financial year. This would of course apply across the board, Judges, Civil Servants, Ministers, MP, Doctors the whole kit and caboodle of those who feed off the corpse of a bankrupt state.

Second, as finally voiced in the Chamber of the House of Commons yesterday by John Redwood MP, the Europe Minister should be immediately sent to inform the EU Commission that the raised contributions agreed by Blair, a principal perpetrator of this disaster, can no longer be afforded by the country BUT with the added advice that Great Britain cannot afford to participate in the farce of the June EU elections to the EU Parliament, nor send any MEP to Strasbourg for the next five years at an annual cost of well over one million pounds per head for absolutely zero return.

Third, read my posts from the start of this year, linked here and here.
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Higher payments to the EU help send UK deficit sky-rocketing.

The best report on the horrifying new UK debt figures that I have read is linked here, typically higher contributions all to be wasted by the EU, are reported as part of the problem.

The crisis deepens on every front, can the markets continue to be anaesthetised through the end year holiday season?

The 'Cloud Cuckoo Land' of the UK Property Market and NHS

The Daily Telegraph's Personal Finance Correspondent writes this week that UK property prices return to 2007 levels until 2014. Read the entirely incredible article from here. Elsewhere the same paper reports that the IMF predicts Britain's gross debt to GDP ratio will reach 109.7% by 2015 (Le Figaro reports the IMF predicts 115% by the same year for France, our supposed ideal partner for future aircract carriers on which more tomorrow). The Telegraph this morning quotes a second month of property price falls, read here and concludes: The average home currently costs £169,347, according to Nationwide. Yet Myra Butterworth, Personal Finance Correspondent of the Daily Telegraph, informs us that homeowners "will have to wait until 2014 for a recovery, when average prices will reach £226,900" We recall that Ambrose Evans-Pritchard, astute finance commentator on the same newspaper, last November reported Société Générale advising its clients of potentiel global collapse and suggesting they buy "sovereign bonds (to) "generate turbo-charged returns" mimicking the secular slide in yields seen in Japan as the slump ground on. At one point Japan's 10-year yield dropped to 0.40pc" What else was forecast in that perceptive report: "Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

(UK figures look low because debt started from a low base. Mr Ferman said the UK would converge with Europe at 130pc of GDP by 2015 under the bear case).

The underlying debt burden is greater than it was after the Second World War, when nominal levels looked similar. Ageing populations will make it harder to erode debt through growth. "High public debt looks entirely unsustainable in the long run. We have almost reached a point of no return for government debt," it said."

And the crowning UK National disaster that is the NHS, read this gob-smacking nonsense from the Daily Mail this morning:

£130,000 to quit now for NHS bosses facing axe as plans are drawn up to sack up to 20,000 managers

Does Lansley not know the nation is bust. Cash from public employees and those sitting on large unearned house equity are the only future source for repaying the debts if private enterprise is to be allowed to play its historical role of wealth creation. Cap public pensions at three times the OAP as a maximum, recoup the wealth with a five year reducing property tax as earlier proposed on this blog (read the Brown Levy from here). In reality there are no other choices!

EU Commission makes itself target for austerity protests

A good report from Canada linked here, provides the striking image at the top of this post. Do these EU idiots have any idea of the dangerous forces they are now unleashing? In the Telegraph this morning one article is headlined "EU imposes wage cuts on Spanish 'Protectorate,..." linked here, while Reuters openly muses on the obvious likely response of the Spanish Unions. Meantime and concurrently, as I report on my blog The Strasbourg Cesspit, MEPs plan to vote on yet another increase in their obscene expenses. While the trampled former electorates of those in the Eurozone will have the luxury of the EU on which to vent their spleen over their impoverishment in the cause of continuing supplies of bonuses to the banks and their employees and allowances to the MEP troughers, those in Britain will have only the new Conservative/Liberal Democrat Coalition to blame for the pain of redressing the incompetence of the Brown and Blair years! Simple measures available to UK Governments such as VAT rises and public pay cuts should be enacted as soon as possible to ensure thet the later inevitable blame is correctly targeted, an IMF audit of the national accounts should also be a sensible first step!

Britains true debt figure.

This blog frequently queries the real amount of Britain's indebtedness. The following was a contribution quoting some more realistic numbers from Bill Cash in the Emergency Debate on the Budget Report in the House of Commons yesterday according to Hansard, linked here: Mr. Cash: The hon. Gentleman talks about new investment, but that money has to be found. As my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke) has pointed out, there is a vast amount of as yet undisclosed borrowing. Does the hon. Gentleman agree that the contingent liabilities to which I referred in my earlier exchanges with the Chancellor represent a horrendous picture? Not only are we running at £1 trillion, as disclosed by the net public sector borrowing, but when we add in the Maastricht arrangements that my right hon. and learned Friend mentioned, we get up to £1,258 billion. We then have to add public sector pensions, Network Rail, the whole issue of the banking arrangements, including those for Bradford & Bingley, and nuclear decommissioning, so we end up with a figure that is about twice the amount that has been disclosed. In other words, we will not find the investment, because the money simply is not there. We are talking about £2.5 trillion.

OECD predicts UK Growth of only 0.8% in 2010

Only yesterday the Chancellor, A****** Darling, stood in the Commons and forecast 2010 growth of 1.75 per cent for that year - an estimate every commentator I have heard states is "optimistic".... How much more debt compounded to 2015/16 does that incur. Read a summary of the OECD forecast from here. Separately the Taxpayers Alliance has calculated Ex-Chancellor and now PM Brown's debts will be double those it cost Britain to defeat the Kaiser in The Great War from 1914 to 1918.

Will the UK Default?

A Bloomberg chart showing the respective costs of insuring UK debt versus that of the USA and Germany: For more on this topic and an interesting comment thread I suggest you try this link to Guido Fawkes blog who has now taken up my theme for this morning.

What is Britain's debt?

PM Brown in Parliament said Britain's debt was 37.5 per cent according to IMF figures for 2008 and then quoted several other developed countries all with higher percentage figures. But per cent of what, and excluding what - all PFI one assumes. The CIA quoted on the unreliable Wikipedia has a huge total putting Britain only just behind the USA while monthly figures available today were horrendous. The Devil's Kitchen blog, here, has some other figures from the EU but they make little sense either.... so what is the true magnitude.... surely there is an authoriative internet source somewhere?????

Government debt to exceed 60 per cent of GDP

The following analysis is a small part of a very detailed report from The Market Oracle, linked here: ==============================================================

Government Emergency Action, Bank of England Loss of Control

The government, Bank of England and Regulator are in emergency talks aimed towards rescuing the British banking system from collapse. The expectation is that the banks will provide capital injections totaling of as much as £50 billion, that would mean inflating the countries national debt by 10% busting through the 40% debt to GDP rule. This IS an emergency move to prevent an imminent collapse of the UK banking system. This highly inflationary in monetary terms, but deflationary in economic terms i.e. .your money buys less but at the same time you have less money to spend! This is in addition to the estimated losses as a consequence of nationalisation of Northern Rock and Bradford and Bingley of £40 billion, therefore the UK debt has been inflated by £90 billion, with another £150 billion loaned out to the banks with perhaps a default rate of 20% implying another loss of £30 billion. That is a total cost to the UK tax payer to date of some £120 billion with the potential to explode yet higher towards £200 billion plus. The £200 billion figure is not born out of hindsight for in the analysis of 22nd April 2008, I specifically warned that the costs of bailing out the banks by means of nationalisation and exchange of cash for illiquid mortgage back securities would explode to over £200 billion this year . In the analysis of April 08, I voiced the concern that the governments debt ceiling of 40% would soon be busted through onward sand upwards to 60% of GDP by late 2009. Recent events put Britain directly on this path to exceed 60% of GDP with all of the consequences in terms of currency devaluation.

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