Our Economy: Will the UK be downgraded? Why it matters..

[toppstuff]

Watching Newsnight tonight - and I have to say it is pretty worrying.

The UK economy is in a completely false place, it seems to me.

There is NO real recovery.

Stockmarkets are at an ARTIFICIAL level, not reflecting true value.

The vast amounts of money being printed by the Gov are having the impact of simply pushing up asset prices ( stocks and gold mainly). In other words, a lot of the free money being printed by Darling and Brown is simply pushing these assets up and creating a false sense of recovery.

This must end soon.

The problem is that too many senior economists around the world are worried about what Darling and Brown are doing. They do not believe their estimates. There is a real possibility that Britains credit rating could be at best, put on a watch-list of countries with precarious finances, or , at worst, have its credit rating downgraded.

Either of these measures would be disastrous. Sterling would crash and interest rates would have to rise considerably to counter the effects. Pretty soon it could like Argentina or Zimbabwe.

It makes me mad. Once again, Labour are lying through their teeth - refusing to face up the truth in the next 4 months because they want, above all, to keep power - even if it means that the country is ruined.

Too many voters do not properly understand what all the above actually means. Too many voters will believe the lies coming from Brown, Darling and co.

Things are far more delicately balanced than people seem to realise.

I think we may be staring down into an abyss if this country makes a wrong turn in the next few months..

It is a worry. It really is.

I don't think my TV is going to survive the next 3-4 months. I am certain to throw something heavy at it soon if Brown, Balls or Darling or any other fkwit labour apologist talks bks on the Tv anytime soon...

[Spiritual_Beggar]

Was watching that as well.

Very depressing to listen to.


It just shows how out of touch Brown & Labour (and to some lesser extent, the tories) are to the whole situation.


They keep saying we won't get downgraded, but voices on the continent and overseas are mumbling otherwise. If we do.....we'll find ourselves on a very slippery, and steep, downward slope.

Edited by Spiritual_Beggar on Tuesday 5th January 23:24

[ShadownINja]

Mandelson was warning banks not to leave London (to avoid the 50% tax) as they would harm the recovering economy. What a .

[toppstuff]

Spiritual_Beggar said:

Was watching that as well.

Very depressing to listen to.


It just shows how out of touch Brown & Labour (and to some lesser extent, the tories) are to the whole situation.


They keep saying we won't get downgraded, but voices on the continent and overseas are mumbling otherwise. If we do.....we'll find ourselves on a very slippery, and steep, downward slope.

Edited by Spiritual_Beggar on Tuesday 5th January 23:24

Yes - the Tories are in a fix over this. They know as well as anyone what the true situation is, but the problem is that they are scared to tell the truth because a lefty, populist media will tear them to pieces and they will be labelled as the "nasty party" again and could throw away the election..

I am reminded of that film " A few good men"...

" You want the truth ? You can't handle the truth !"..... this could be directed to many of the Labour voting electorate. They make up some 30% plus of the vote..

In any event , whatever the election result, it is going to be a tough couple of years IMO.

[TonyToniTone]

FT today said:

Alistair Darling laid bare tensions with Gordon Brown over the £178bn deficit amid moves by global investors to cut exposure to UK government bonds because of worries about public finances.

The chancellor argued on Monday that revenue from stronger-than-expected growth should be used to cut borrowing – not increase spending – a pledge that could reassure bond market investors.

But his comments jarred with suggestions by the prime minister on Sunday that any extra revenues from stronger growth or lower unemployment might be used to boost spending and reduce the pain of looming cuts

http://www.ft.com/cms/s/0/bd30ceac-f97b-11de-8085-...

Winky just want to keep spending and avoid cuts to save as many votes as possible.

[Badgerboy]

The question is would a new forecast be delivered before the election? That would certainly impact things I would think. Secondly, a degrade as such really has to come from one of the main rating agencies. How much swing/pressure do you think the Government could bring to bear on this decision?

[_James]

We aren't the only economy in the world indulging in a bit of the good old QE panacea though are we? And nor are we the only one who's asset prices have rebounded spectacularly.

In fact you mention gold, but bear in mind that is a global market, priced internationally. Our pathetic (relative) amount fo QE would not be sufficient to sustain such a massive gold rally.

If the end of QE does create an asset price collapse, we will not be isolated in its effects. And a currency pair cannot decline simultaneously.

Also, these Zimbabwe/Argentina comments. Seriously? Its not gonna happen. Zimbabwean economic policy was, frankly, non-existent. And I don't care what the Daily Mail, Merv the Swerve is mildly more capable and has significantly more at stake than the President of the BoZ ever did.

Edited by _James on Wednesday 6th January 00:14

[Kermit power]

Personally, I think it's ludicrous that the ratings agencies, who were one of the big culprits in the whole banking fiasco in the first place still wield anything like this amount of power.

That's not to say that Labour aren't screwing everything up of course!

As for interest rates rising if our sovereign credit rating falls, why hasn't this happened with Japan?

[Tangent Police]

Rather than asset prices rebounding. Consider they haven't fallen properly yet.

QE has to stop otherwise it will precipitate the same outcome as it is trying to avoid.

Inflation is around the corner, rates will go up and then people will default on mortgages and then the resulting supply and demand will create all sorts of financial stampedes.

The short termers and the irresponsible will get nailed.

Meanwhile, Gordon will get to live out his life in the luxury he's earned.

I'd like to see the public hold these people to account. Preferably with balaclavas and firearms.

Blair first, Brown second, then free fire into the rest of them, from all parties.

[Fittster]

toppstuff said:

Stockmarkets are at an ARTIFICIAL level, not reflecting true value.

Why do you say that? I thought popular economic theory states that the market prices reflects all the information currently available.

[Fittster]

toppstuff said:

The vast amounts of money being printed by the Gov are having the impact of simply pushing up asset prices ( stocks and gold mainly). In other words, a lot of the free money being printed by Darling and Brown is simply pushing these assets up and creating a false sense of recovery.

Are they really printing enough money to push up all global stockmarkets? Or is it simply a case that markets priced in a collapse of the banking sector, Western governments, including ours prevented that a price have risen on the back of renewed confidence in the system?

There is no evidence that QE will lead to high inflation, it certainly hasn't in Japan

[Tangent Police]

.....and the rate of availability has changed (with interweb sources, particularly media -witness the last pound crash thread on here).

Stuff is more volatile than before information wise and considering the government are taking big risks, they are now playing with a more unstable system.

There is only one way it can go.

Parallel to this, we have politicians and parties pandering to the voters in thin and "good for you, but not the country" ways.....

.....whilst they are in luxury themselves.

Entertaining in a kind of sick way that dilute undemocratic socialism is the norm and true to Orwell's pigs, those with the will and ideology have become the new and removed ruling class.

Laissez faire is the only real way you can get proper growth, hence proper taxes..... as far as I can tell

[Fittster]

toppstuff said:

It makes me mad. Once again, Labour are lying through their teeth - refusing to face up the truth in the next 4 months because they want, above all, to keep power - even if it means that the country is ruined.

Are Dave's conservatives being honest? I don't here talk from them about cuts in spending or tax rises. Just yesterday they were saying they were annoucing expensive NHS spending pledges.

[Tangent Police]

Fittster said:

toppstuff said:

It makes me mad. Once again, Labour are lying through their teeth - refusing to face up the truth in the next 4 months because they want, above all, to keep power - even if it means that the country is ruined.

Are Dave's conservatives being honest? I don't here talk from them about cuts in spending or tax rises. Just yesterday they were saying they were annoucing expensive NHS spending pledges.

For the squillionth time, there is nothing libertarian or free-market about the Tories, they are another set of Social Democrats with a particular marketing campaign which is trying to be all things to all men (in order to get elected) whilst the others do likewise.


In the meantime, the ingredients for a fking nightmare are reacting gradually.

But they're ok, so who gives a st?

[Tangent Police]

Fittster said:

There is no evidence that QE will lead to high inflation, it certainly hasn't in Japan

Japan actually do stuff. They have a primary industry. Hence are a total non-comparision.

We have all the ingredients for stagflation.

We also have the choice between imported goods price inflation on one hand, or property default on the other hand and all sorts of hell up.

We have no bridges and are stuck between a rock and a hard place (and joining the PIIGS- as banking will probably bugger off with increased fedEUralisation)

At least all the dole scum will bugger off to Germany though

[Fittster]

Tangent Police said:

Fittster said:

toppstuff said:

It makes me mad. Once again, Labour are lying through their teeth - refusing to face up the truth in the next 4 months because they want, above all, to keep power - even if it means that the country is ruined.

Are Dave's conservatives being honest? I don't here talk from them about cuts in spending or tax rises. Just yesterday they were saying they were annoucing expensive NHS spending pledges.

For the squillionth time, there is nothing libertarian or free-market about the Tories, they are another set of Social Democrats with a particular marketing campaign which is trying to be all things to all men (in order to get elected) whilst the others do likewise.


In the meantime, the ingredients for a fking nightmare are reacting gradually.

But they're ok, so who gives a st?

Possibly you need the utter failure of the current system before something new and improved can replace it. A nice hung parliament would be an excellent nail in the coffin.

[Tangent Police]

Fittster said:

Tangent Police said:

Fittster said:

toppstuff said:

It makes me mad. Once again, Labour are lying through their teeth - refusing to face up the truth in the next 4 months because they want, above all, to keep power - even if it means that the country is ruined.

Are Dave's conservatives being honest? I don't here talk from them about cuts in spending or tax rises. Just yesterday they were saying they were annoucing expensive NHS spending pledges.

For the squillionth time, there is nothing libertarian or free-market about the Tories, they are another set of Social Democrats with a particular marketing campaign which is trying to be all things to all men (in order to get elected) whilst the others do likewise.


In the meantime, the ingredients for a fking nightmare are reacting gradually.

But they're ok, so who gives a st?

Possibly you need the utter failure of the current system before something new and improved can replace it. A nice hung parliament would be an excellent nail in the coffin.

Taking the romance goggles off for a moment.....

It seems that the media are setting us up for the usual red-blue battle with the yellows at the side. Preaching variations on the big government, welfare state in the EUSSR, wasting money, red taping and doing lots of talking and "getting on with the job".

Meanwhile, the trio and their media drift every further away from what the man in the street experiences and desires. Democracy is dead. We don't have a choice and everything is geared up to see that nothing changes.

So, whilst we may get a hung parliment (I gather the Lib Dem non-entity- fk me, they have the fking nerve to call themselves liberal! has refused to play politics with the other 2....) and I suppose we'll see even fewer people turn out for the polls and meanwhile the gulf between the ruling class (social democrat leaders of various combinations) will feather their nests and push their anti-CO2 and pro-EU agenda, whilst simultaneously jacking up taxes to fund this madness.

In the meantime the black market will flourish and everyone else will just moan.

It's how we do it in the UK and bugger all is going to change.

At least if we get into Europe, we might have a hope of having a similar level of interference-fkwittery as the rest of the Europeans, rather than our nutty Orwellian lot.

We need a fking libertarian party. Sadly anyone who gets involved in politics gets sidetracked by liberal eutopias and socialist bullst (whilst neutralising their own struggle on the gravy train).

We shall see. My bet is on more EU, more taxes, more red tape, more talk and promises, more public apathy and resent, more carbon hysteria, more of the same.

Call me Dave and his bunch of spineless nest-liners are as bad as new-labour. They have all read the prince and they all know what to say and how to play the game against each other. Hence we have the yellow tie prince, the blue tie price and the red tie prince.

How about if you don't want a prince?

The media will do very well to see there is no alternative. So, nothing will change.

[Mclovin]

assuming the government is out in a few months i dont think there will be a gilts strike or credit rating downgraded but at the same time i wouldnt want to be borrowing beyond my means because the rates are definitely going to shoot up.....

[Tadite]

Fittster said:

toppstuff said:

Stockmarkets are at an ARTIFICIAL level, not reflecting true value.

Why do you say that? I thought popular economic theory states that the market prices reflects all the information currently available.

It does. However it also suggests that because of asymmetrical information people simply follow those they think have the real information. and when the leaders are just guessing... Hence "irrational exuberance."

[anonymous-user]

Tadite said:

Fittster said:

toppstuff said:

Stockmarkets are at an ARTIFICIAL level, not reflecting true value.

Why do you say that? I thought popular economic theory states that the market prices reflects all the information currently available.

It does. However it also suggests that because of asymmetrical information people simply follow those they think have the real information. and when the leaders are just guessing... Hence "irrational exuberance."

I don't think the markets have any faith whatsoever in Winky and the badger. Therefore I take solace in the relatively buoyant state of the FTSE. I trust the traders more than I trust Winky & co.