Burning our money - the return

The most excellent Mike Denham - he of the Taxpayer's alliance YouTube videos of yesteryear ( well about two years ago really ) - has written a book and is returning to blogging.

This is good news all round - especially if you have any Lib Dem or socialist relatives etc you're obliged to purchase Christmas presents for .. see here.

Christmas has come early in my Shed as I'm downloading the kindle version.

It also means Burning our money blog is back !

A message many should hear

The only question is what is he doing in the party of David Cameron and George Osborne ?

Also you have to wonder if we aren't going to end up looking at Russia Today for our news - given the virtual domination of the BBC over hear.

H/T To The Devil's Knife

Continunity Brown

Well those figures on debt were bad. Being delivered by a supposed Conservative chancellor they were a disgrace.

Spending goes up, the economy goes down. The parasitic state wastes more and more as its eats our very economic soul, egged on by the vampires of the public sector Unions and the BBC.

But Osborne isn't bothered. Why not ? Because he's playing one of Gordon Brown's very own tricks against Labour.

By spending like a drunken sailor he's forcing Labour to say binging even more on borrowed cash is the answer. ( A point his own failure to control spending proves to be false ).

Labour are politically trapped, much as the Conservatives were when Brown spent more money than the country could afford to dare the Conservatives to talk of cuts and taking things away...

The irony would be amusing if it wasn't all being played out over the soon to be corpse of our country's economy.

The problem is a real patriot ( which means a real Conservative ) would rather lose an election than betray hos country.

Not so the professional PPE born to politics brigade who are just in it for the personal glory.

What has our country done to deserve two Gordon Browns putting politics before country ?

Incredulity on the rise

I was just starting to read a post by Alice over at UK Bubble ( the hints in the name ) on house prices where she talks about how much faith people used to have in house prices. I can remember telling my own neighbour in 2007 that things were heading for a crunch - but no one wanted to listen in those days. Things would carry on as they had before.

But now the crowd knows better.

The blog post I'm referring to is about Bond prices heading for a reality based correction, but there are plenty of other normal assumptions that the crowd has that are vulnerable. They are all heading for a crunch with reality soon:

• the Euro can continue;
• immigration can be accommodated in the UK at the current rate;
• life can just continue as normal as the new emerging powers take more and more of the resources that used to go to the west;
• all three traditional main parties can continue to treat there members with utter disdain;
• austerity in the Euro-region can just be enforced by EU appointed technocrats;
• Taiwan can continue independent of China, guaranteed by the US;
• the Arab world can feed and employ its rapidly exploding population;
• the US will be able to afford all its carrier battle groups and massive military whilst having its debt funded by China, and;
• the UK can continue on its current debt fuelled decline, pursued by continuity Brown (Osborne) just as firmly as by Darling, without a crisis.

Can you think of any others ?

In short credit is down, incredulity is up - dangerously so as West Bradford has given us a glimpse of. But is it up enough to help us be motivated enough to defused the UXBs ( Unexploed Bubble's - my redef ) lying around our world.

Ed Miliband's debt denying luddites are getting a bad press

Labour's flat-earthers demand the cuts go away - Bagehot, the Economist
Miliband faces protest backlash: Unease as Labour leader ranks marchers alongside suffragettes James Chapman Daily Mail
(both HT Conservative Home - Tim Montgomerie ).

And that's before we get onto the thuggery a general leftwing hypocrisy and crime wave that we all knew would accompany such a childish demonstration.

No doubt there's more ...

And there is


HT Guido

Collapse

In Man in a Shed's working world there are banks of lights in control rooms, or at least there used to be before visual displays took over.

It was not usual to see flashing yellow and red lights as alarms went of around a plant. It took a skilled operator to know what to worry about, and what was of secondary importance.

Well right now more and more financial lights are flashing in the news. The Euro, our national debt ( still climbing and with no reduction in national spending planned - despite what a bunch of middle class students think ), even China.

It all looks unstable. The problem is we are, as a result of our political system, lead by amateurs, who have short term interests written into their contracts. If you though annual bonuses for bankers encourage reckless speculation, then quintennial elections do the same for politicians ( who live for the next election - not the future ).

So what the rest of us need to start thinking about right now is a broader, and hopefully short lived - collapse.

We know from the weather that there isn't much food in the country any more. Does anyone believe the government could feed the country for 6 months as the world sorted itself out ? Or indeed that what we produce in this country would be worth battering for food afterwards ?

It is time to start considering some of the unpalatable possibilities of collapse facing the world. The warning lights are flashing - the question is what do they mean and is our government making preparations for some of the less electorally fabvourable outcomes that might be life or death issues to us in two years time ?

I'm starting to get worried

Not about the coalition - not yet anyway.

No what worries me is that the wheels may be about to come of the the European experiment and the worlds faith in quantum money.

What do I mean about quantum money ? Well I'm playing on the Heisenberg uncertainty principle as we can't really be sure where a lot of money really is.

I place £100 in the bank, the bank lends say £80 out to some one who spends it and deposits it again - allowing the bank to lend out £64 to someone who spends it with someone who deposits the money etc etc ...

Does my £100 exist ? Well the bank lent it out a few times, and yes as long as I don't look for it by asking for it back I can think of it as existing but I can't have it back as the banks lent it out a few times over.

We get round this by having a lot of people borrowing and lending at the same time - so I can withdraw £100 from the local cash machine- as long as most other people in the same situation don't.

This has all worked well enough for some time. But the problem is that people are about to do a lot of observing where the cash really is if sovereign defaults start - and they might very well soon - and it will then have problems being in many places at the same time.

( On an aside if you were the chancellor of a country about to default do you default before you receive a large rescue package from your neighbours or afterwards ? Its a no brainer really ).

I'm not an economist, just an engineer. But I don't like the look of things right now.

Further ( Stiff drink suggested before reading - in fact buy a crate load just in case the cash stops working ) Is Europe heading for a meltdown - Edmund Conway.

Remember there is a way Brown could be PM for a while longer...

And that's to call another general election straight away, whilst he is still PM.

Labour might fancy its chances on improving its position, and after all what else does Brown have to lose. Though of course Labour is broke.

To justify this he could go if no formal coalition is agreed between the Lib Dems and Conservatives citing a national emergency.

I admit its unlikely - but remember how desperate Labour are to hang onto power ! It may also explain why Brown hasn't resigned as PM. The ability to call a new election may be the key to power in the country for some time to come.

PS This weeks Economist makes a good point. That is that Labour has a smaller amount of the vote in 2005 and gained a comfortable majority. It just shows how two faced Labour really are that they are clinging to power.

The Lib Dems have been wrong on the biggest question of the hour

Those serial chancers the Lib Dems probably thought being anti-Tory and siding with Labour on carrying running of the nations credit card for a few months was a smart move. After all it allowed them to stir endlessly and smear shamelessly.

But now, just one week before polling day, the weak point of that argument becomes clear.

Its always been known about, and it was Labour's chancellor Alistair Darling who put it best when he described the UK skating in thin ice which will suddenly give way. Once the cracks start its just a moment till your under the freezing water. No time to change your mind.

Events in Europe show how real that risk is.

Labour and the Lib Dems want to try our luck on the ice, because it offers themselves the best political returns.

The Conservatives have argued that reductions in over spending need to happen now, not next year. Like the Irish we want to set about safeguarding our country from calamity. The Lib Dems and Labour have chosen the Greek route.

David Cameron must crush Nick Clegg with this tonight. Labour is finished, but the Lib Dems could yet finish the UK with their selfish and ignorant economic policy. This is not a local council election where the traditional shameless Lib Dem stirring and opportunism can be tolerated any longer.

Vote Conservative - whilst there's still time and you've only heard the ice creek, not crack.

The irony of events like #BigotGate and the Euro debt crisis

So some of Brown's personality has leaked out to the outside world, and an unfortunate life long Labour supporter has been humiliated by this weeks prime minister.

But in some ways Brown can count himself lucky. Focusing on what happening to countries with massive debts and structural deficits in Europe would have been perhaps even worse news for Labour.

But there is an underlying irony here also.

The idea that concern about levels immigration was being bigoted was the main theme the BBC/Guardian/Labour party used to smear the Conservative party with in 2005.

The other was the idea of savage cuts in public spending - remember Blair just managing to say that the slightly lower levels of planned Conservative spending were like sacking every teacher nurse and doctor in the country ( even he almost couldn't keep a straight face for it ).

Where are we today ? Having lost all control of the mass migration into our country and with debts that could at any minute sink us beneath the waves.

The irony today is as bad as the headlines are, they have made it a good day to bury bad economic news.

Looking to Greece, Portugal and now Spain its quite clear that the Irish did the right thing and faced up to their financial disaster, in the way the Conservatives are most likely to. The Labour approach is that of the Greek governments - lie to the people and the world. The Lib Dems are a mixture of the two - as always.

Coming one day before the economic debate between the leaders Brown will have been desperate to keep that news low down the running order. ( Along with the failure of the UK economy to grow and the record unemployment figures. )

But in many ways this is a day of what goes around comes around as chickens come home to roost after 5 years.

Lib Dems reverse course on fiscal responsibility to use debt to buy votes

You knew it was unlikely to last. Nick Clegg has just performed a humiliating U turn as the Lib Dems back using debt on future generations to pay for votes for themselves and Labour.

Typical Lib Dems ! ( Perhaps the letter to the Guardian by his MPs to disassociate themselves from his policies won't be needed this time. )

Remember there is no substantial recovery - and the signs are that a second dip of the recession and a credit crisis in private industry are very likely. There is very unlikely to be a recovery strong enough to give a good time to stop mainlining on debt. All the while debt floods the compartments of the ship of state, which shortly may sink suddenly in a financial crisis.

Vote Lib Dem - get Gordon Brown's economic destruction of the country continued !

No Change at all with the Lib Dems then !

See also Do the LibDems want to cut spending or not? Daniel Hannan.
Vacuity That Works For You Burning Our Money
Vince wants it both ways Iain Dale

Trouble ahead ?

This article by Robert Peston made the running on Radio 4 this week, but were so tied up with the attempts to dominate the media by party spin merchants that reporting gets drowned out by the noise. I bet most people didn't internalise the implications.

Its worth reading what Mr Peston has to say - on this occasion about Bank Funding.

Gordon Brown will want to show the bailout of the Scottish Banks as going well for the tax payer - so expect no honesty there.

Again, as I've asked, the question is "what if things don't pick up" ?

All the scenarios getting aired in politics right now are sunny day scenarios where we argue with Labour over when to stop over-spending money we don't have and must borrow. ( With the Lib Dems doing their usual in-between act ).

But the case for immediate action becomes overwhelming when you consider what happens if the rain keeps falling.

This is a point Conservative politicians could do with making.

A future enslaved to debt for all !

Labour again misleads with its new campaign slogan.

The truth is that they have sent the 4th biggest economy in thwe world with a pension system that was funded and the envy of Europe into a basket case dropping through the world rankings in every measure that matters.

No wonder Labour is ordering their canvassers not to dwell on their record !

Labour are using the bankers as a smoke screen to escape their responsibilities

Its good politics bashing bankers. Its probably even a reasonable thing to d, since they are now trading on sovereign guarantees actual and implied.

But its not responsible.

Its not sincere either, as Labour control half of the banks and have the ability to enforce their edicts if the chose. But that would mean taking responsibility for the outcome and they are very keen on avoiding any of that.

Unfortunately its a side show in the economic sense of the spectacular disaster Labour have prepared for us all. We are broke, very broke. Its just we don't realise it yet, and they are keen that we don't before the next election.

So a good staged fight against Gordon Brown's until very recently best friends that he destroyed effective regulation to support is just what the Labour spin doctor ordered.

But its killing the country.

And here's the thing, many Labour MP and supporters must be smart enough to know that's true also. But they reckon they will do better personally in power than queuing up at Job Centre-plus's with their former constituents wondering where all the Diversity Officer non-jobs on £70k+ went.

In my view it socially and morally unacceptable to be a member of a party that betrays its people so blatantly and with such callous self interest.

The age of pussyfoot

This is the title of a science fiction novel by Fredrick Pohl that foresees a lot about our current culture and even technologies, written in 1969.

I read it as a teenager and I can see certain aspects that are key to our current predicament.

Fear and cowardice are becoming our greatest enemies and are becoming toxic when combined with the loss of a moral basis for society provided by the UK's Christian heritage.

Today many on the left don't believe the catastrophic financial position Brown and Labour have placed us in, and are happy to continue the political tactic of the narrative, spin lies and deceit ( witness Ed Balls). A few more on the left know full well, but are plotting the downfall of our society and this is all very good for them.

Labour are lying directly and mercilessly to peoples faces about our current state, and many of the people believe them because they are scared or ignorant ( ignorance is always Labour's best seam to mine for support ).

The question is what will the response be ? There are broadly two options (as shown on last night's Newsnight), the Danny Finkelstein (aka Ted Heath) approach which appeals to our inner coward or the John Redwood (think Thatcherite) approach which we know may lose us the election and requires bravery. If we go with Danny and the SDP then we are doomed, because our fears will overcome us. Winning the election will be a Pyrrhic victory.

In "The age of pussyfoot" due to the threat of war many people chose to put themselves into suspended animation to hide from the threat, they have too much to lose and a sort of combination of a tragedy of the commons and cowardice nearly leads to defeat.

Today people grasp at Red Toryism and the fact that every key budget that people might be frightened of a change in can be ring fenced whilst magic pixie dust of future growth will save the day. I don't believe it will.

If we are over whelmed by this crisis is will be because people are not yet brave enough to listen to what they don't want to hear. The grimmer worm-tongues of the left whisper in people ears messages about "vital services", neglecting to tell the nation how truly weak we have become, so when the real crisis arrives they can deliver us to their masters.

It might even be better to lose the next election than to win it without a clear plan and mandate to save our country.

We may not have until the next election....

There's a sort of phony war going on. Cuts have been declared - and everyone assumes we can wait six months for a change of national leadership before the blood shed has to start. ( Indeed many Labour and Lib Dem career politicians will be happy to see Conservatives throwing away their careers to save the country - so they can bounce back into office once the responsible adult work has been done claiming they opposed it all along ).

Wat Tyler uses the phony war strategy on his blog to describe the current situation.

We assume we have till after the next general election before cuts have to be made - indeed we can keep the current high burn rate of voter bribing going based on rapidly increasing debt and printing money till then.

But there are other dangers lurking out there. Yes the markets may be willing to wait for a sane Conservative government - all other things being equal. However we may be an island but we are not isolated.

A dollar crisis is getting closer every day. And the value of the dollar is very very unstable.

There are a lot of people who would like their money out of the US currency, but fear pulling it out fast would cause a collapse which would destroy their wealth. But if they think someone else is doing it then the queue's outside Northern Rock will look like a metaphorical picnic in comparison.

The US has no - repeat no - chance of honouring its debts with using inflation to effectively default and cheat its creditors.

Guess which financial genius invested large amounts of the UK's money in US debt - think World Statesman of the Year who is very popular in New York right now, but oddly nowhere else.

A US collapse will drag us to the bottom also because of the debt run up over the last year by insanity Brown. You see there is the risk they never mentioned of "investing your way out of the recession" really being tying a millstone around your neck just at the moment a sudden impact holes your ship below the water line.

( Note the US is already pulling back fast. Missile defence cancelled for Europe, NASA shortly to be told to forget its budget, troops out of Iraq and maybe Afghanistan. The US Suez moment may have already started. )

For those of a nervous disposition its time to head for safe assets like gold.

Declaration of interest ( no pun intended ) MiaS domestic asset management has already moved a proportion of my assets into a well known shiny metal.

Is Brown planning to boost housing debt just as interest rates may have to rise to save his skin ?

The Telegraph has one of those deeply depressing articles today. They report that Gordon Brown just hasn't listened to anyone, least of all Dan Hannan, over the last week.

He's planning on trying to "get the mortgage market going again". Yes its time for more Debt everyone, because it worked so well last time.

Combine that with the warning yesterday that interest rates will have to rise fast and aggressively if inflation gets worse than it is ( and remember it is still way over target with major inflationary events yet to work their way through - you can't trust what you hear from the Beeb on economic, they are just too desperate to keep Labour in power.)

What should start to worry all of us is the constant talk about the housing market and consumer confidence. When did we ever learn to accept that those where the main indicators of a healthy economy.

What about the balance of trade and the national debt. The Daily Mail yesterday had a truly frightening projection of the national debt under Brown.

I've called for criminal prosecution of key ministers for what they are doing, and I'll do so again. We should try to prove they are acting in personal and party interest and not national interest. And then put them in cells to reflect on the lies they told and mysery they have inflicted.

PS Man in a Shed is reading up on Peter Schiff these days, and is trying to recall his 'O' level economics. I have a fealing that we are being decieeved about the long term consequences of government actions and our current state of true wellbeing again, and I'd like to be able to express it.

Update Or to put it another way see the Cartoon here.

How long before Brown subverts and steals private pension schemes also ?

It can't be long now. It will of course not be described as what its is. Something on the lines of the government has added the innovation for pension scheme to invest of the safe haven of government debt. But it will mean Brown gorging himself on the last remaining supply of cash in the private sector.

The Conservatives need to take radical action now to stop him.

My suggestion is this:

To state that beyond June 09 a future Conservative government will not honour debt taken out by the Labour government, unless a general election is called.

This can be justified as by no stretch of anyone's imagination does Brown have a democratic mandate for the enslavement of the nation that he is busy arranging now.

Brace, brace, brace !

Many years ago I undertook a shortened version of the North Sea offshore survival training, the most pertinent part of which was the helicopter survival training.

We all knew that flying to and from the platform was the highest risk thing we were going to have to do. Helicopter more often than not crash hard and sink fast and you are trained to handle suddenly finding yourself upside down in a cabin filling with freezing water and escaping through the windows. ( The key point here is you have a short period of time to exit a sinking craft before the depth makes escape to the suffice difficult, so if your sitting next to a fat bloke who is next to the window you may never get out. Needless to say everyone rushes for the window seats first and its not to enjoy the view. )

They play a video at the training, and before the flight, which is watched in respectful silence / boredom / and not a little horror by those making infrequent trips.

The key part is when you are warned to prepare for a hard landing with either the hurried words "Brace, brace, brace" or as the video helpful points when it become clear of the need to do so. By the nature of helicopter operations the warning is most likely to be just before the incident, if at all. The idea is that your training kicks in and you do the things you where trained to do without thinking and of course panicking.

Now I have the suspicion that the European economies, including ours could be in for a hard landing that may develop suddenly ( over a weekend is the best amount of warning anyone is likely to get ).

You might get the central bank giving the equivalent of the pilots "Brace, brace, brace" warning, but the first things you notice may be the water moving towards your window at very high speed.

Fanciful ? Well remember the government nearly suspended banking in the UK last year , and was a few hours from doing so. Perhaps some of the surprises ( all nasty ) in the UK are starting to be exposed, but that's not true in some parts of the Euro zone or more apocalyptically Russia and Eastern Europe. The serious press is full of articles pointing this out right now - just look anywhere .

Perhaps all will be well, but some form of wider collapse cannot now be ruled out. Now is perhaps the time to go through in your mind what to do if it does, as when you hear the warning it will already be too late.

"Should the British taxpayers have to lower their standard of living for 20 years to pay off mistakes that benefited a small elite?"

Good question. Why aren't we hearing any more of this from our politicians ?