Can the UK escape bankruptcy?

[joe-90]

If so - then how.

We have a ridiculous benefit system we can't afford.

The pensioners are sending the NHS bust.

Our customers in Europe and America are bust.

We can't stop borrowing £10,000,000,000 every month - the Olympics cost 9 billion.

If we can't stop the borrowing - how are we ever going to start paying it back?

We've overcooked the national credit card and lost out AAA rating.

They won't lend us money when they realise they'll never get paid back.

Is bankruptcy our only option?

If not - then what is?

 

[joe-90]

Oh and then there is the Romulans and Bulkgarians who want to join the gravy train with free houses, free health, free dental, free education free.....

 

[Norcon]

That guy "Chris Martenson" is worth watching. ntb linked him last night.
He is so convicted to his belief he left a beautiful home to go live in a slum basically.

After watching his short video clip my conclusion is financial and economic meltdown.
Some scary stuff.
The federal reserve wants more credit released and the graph he displays, shows the debt already peaking as steep as the north face of the eiger.

The last forty years have went out of control basically.
Not sure if europe will go first or america.

The itialians have rejected the latest round of austerity measures and want berlscuni back to turn on the spending taps.
What does that tell you?

 

[sooey]

It tells you we need to start borrowing more before the eyeties get it all.

 

[joinerjohn]

Berlusconi, doesn't want to turn the spending taps on,,, he just wants more "Bunga Bunga" parties (and younger girls)

Dirty Boy...

 

[ntb]

At the risk of looking obsessive the link is here: http://www.peakprosperity.com/crashcourse

It's well worth spending the time to go through it all for anyone that wants to get a better idea of the 5hitstorm we face. I haven't seen anyone pull together the big picture as well as he has.

There's a book I recommend that covers the economics of this mess in plain language for anyone that feels inclined to splash a bit of cash:

http://www.amazon.co.uk/Leverage-Ch...2844/ref=sr_1_1?ie=UTF8&qid=1361909487&sr=8-1

The budget figures for the UK are here: http://www.ukpublicspending.co.uk/budget_ukgs.php

In answer to the question, in my view it would be entirely possible to balance the books. Painful, but doable.

The astute amongst you will note that government spending is actually going up - the talk of austerity is actually a nonsense. It doesn't make any sense until you realise that the money the government is borrowing and spending counts towards GDP. If they balance the books, GDP instantly falls by 8%. Can you imagine the gnashing of teeth that would occur if that were to happen? They are hoping and pretending that growth will restart (it won't) because they either don't have the balls to do the right thing or they want to get to the next election and hand it back to Labour. Which is a shame because it would minimise the impact on us of the next paragraph.

Basically, most of the world is in a similar mess. The longer this state of limbo goes on, the more spectacular the implosion will be. I think the initial spark most likely comes from the Eurozone. But it could be Japan or us. Then everybody blows. Interest rates shoot up and we are forced to live within our means. Defaults, debt restructuring, redundancies, closures and repossessions will happen. Those sucking on the government teat will get angry as the milk dries up and start breaking things. It will be described as unprecedented and unforeseen by the tossers in the media and none of us will enjoy it, But it has to happen. Mathematics will not be denied.

If you are in debt, you don't have much time to get out of debt. Get some spare food and have a bit of cash on hand in case of bank holidays. Good luck.

 

[joe-90]

I've just watched the crash course and it is good.

It actually reinforces what I've been saying for years, but only you, me and Norcon seem able to see it.

I guess that people don't really want to know the truth.

It seems we've reached peak oil so it's all downhill from now.

In ten years we'll think 'now' was the good old days.

In 25 years we'll see today as a 'golden age'.

Thank fook I'll be dead by that time.

 

[Harbourwoodwork]

So is this the end of Capitalism?what's next?Is it time for another Ism?perhaps sensibilism,or is it time to buy a shot gun before the rush?

 

[ellal]

Is bankruptcy our only option?

If not - then what is?

It depends on your definition of bankrupcy, and who owes the money...

Experts continue to praise Iceland’s recovery success after the country’s bank bailouts of 2008.

Unlike the US and several countries in the eurozone, Iceland allowed its banking system to fail in the global economic downturn and put the burden on the industry’s creditors rather than taxpayers.

In the following years, the Icelandic government made drastic cuts that reduced the fiscal deficit from 14 percent of GDP to just two percent. At the same time, unemployment in Iceland has shrunk to less than five percent, while analysts predict the North Atlantic economy to grow some 2.8 percent by the end of 2012, according to recent reports.

The rebound continues to wow officials, including International Monetary Fund chief Christine Lagarde, who recently referred to the Icelandic recovery as “impressive”. And experts continue to reiterate that European officials should look to Iceland for lessons regarding austerity measures and similar issues.

The Financial Times outlined a number of important points for countries in the eurozone to consider in an article published on Monday. These include Iceland’s tactic of pursing “politics of social and economic inclusion”. This includes heavier taxes on the higher brackets while cutting welfare schemes less than other areas of the budget to retain the purchasing power of lower income groups.

Guess which way their deficit/unemployment rate is going...

And guess also which way their trade surplus/credit rating is going too...

Compare and contrast with the UK...

Even the International Mother F*ckers agree that their approach is working, although they call the Icelandic solution 'unusual'...

Probably because they didn't decide to bend over and ask how deep to take it!

 

[chapeau]

We are stuffed, the numbers say we are and the numbers don't lie.

Most financial bubbles end with a blow out party and the previous government held a ten year blockbuster. Current lot in government have their hands tied and the governments which follow them will have theirs tied too.

 

[noseall]

The meek will inherit the Earth.

 

[joe-90]

The meek don't want it.

 

[bhm1712]

Its time to get rid of Osbourne for a start.

Knock VAT down to 15% again.
Cut fuel duty by at least 20 pence.

These 2 measures alone will encourage spending to start up again. Haulage costs will go down and the price of food and other goods will also. People will travel more and this will encourage spending in touristic areas again on a larger scale.

Stop the war on cigarettes and alcohol, and cut duty on these products as well.

This will mean people can go out more regularly to the local pub etc and also people will smoke legitimate cigarettes instead of countefeit - this will add about £3 billion into the chancellors purse, and due to the cheaper price of cigarettes and the cancellation of the war on cigs, more people will be dying at an earlier age again, and this means not becoming a burden on the NHS in ancient age. ( Dont forget that the cost of cancer to the NHS - smoking related or none smoking related is less than the revenue gained from tobacco duty in its entirity)

Stop giving free dental care and prescriptions to pregnant women - they are pregnant not dying....

Nationalise the energy companies and create a maximum price for units of energy. Invest more money back into coal fired power stations and coal mining. We have enough coal to last hundreds of years. Forget carbon emissions - all other Nations seem to not bother so why should we? 2% of total carbon emissions come from the UK. We will not make a difference so may as well use our own resources instead of relying on others.

Ban councils from spending thousands of pounds on useless monthly or three monthly publications which have to be designed, printed and posted out to residents. Force them to put the info online. If peopke dont have the web, then they can view the publication at the library.

Cancel all R&D into HS2. Its a waste of money and will not add any real value to the economy.

Ban local government from investing money into tram systems. They are costly and have a huge impact on the economy in a negative way whilst being built and installed. If local government want to create green transport, they should be forced to install trolleybus systems such as found in switzerland, new zealand, russia and poland plus many more. Installtion of a T-bus system does not require any major road works and lengthy,costly ground works. There is no track, only overhead wires. It has been proven an entire 20 miles T-bus route can be completed in less than 12 months for less than 1/4 the cost of a tram system. T-buses are also not limited to purely where the tracks are. In times of breakdown or other issues, modern trolleybuses have backup engines to power them out of the way. No brainer.

Close the borders to all none EU nationals and cancel all benefits and other handouts to people who are not British. Make it only viable to come here if you have or are getting a job here.

Just a few ideas to save money and help

 

[chapeau]

Just a few ideas to save money and help

Drop in the ocean

You need to think radical!

1) Means test the state pension to an extent when few people would qualify.
2) Nobody in public sector gets paid more than twice average salary in private sector.
3) Public sector pensions to be based upon how much the employee actually contributed, backdated to when they started work, and including those already retired.
4) NHS moved towards an emergency/urgent care only service. Other services privatised and funded by insurance.
5) Capital gains tax to be extended to your main property when you die.
6) Care when old to be based upon ability to pay, state provided care would be basic and probably not particularly pleasant.

Should save a load of cash. But still not enough.

 

[ntb]

Laudable ideas for balancing the books but they won't restart growth.

We have reached debt saturation. All those willing and credit worthy to take on debt binged on it to their fill in the last decade. Interest rates got lower and lower to keep the credit bubble growing.This boosted the economy at the time but it pulled forward demand from the future. We now have millions of zombie households that will not cope with even minor increases in rates, let alone historical norms.

There are some debt free credit worthy people left but they are the ones that think it's dumb to get into debt and have no intention of borrowing. Hence real interest rates are negative (savings are reducing in value) in a vain attempt to force them to borrow and spend.

The only way out is to have a proper recession to flush out the malinvestment and allow capital to be reallocated. This will hurt much more now because of the repeated attempts to not have a recession in the past.

Politicians are idiots.