Posts Tagged 'Debt Crisis'

The debt crisis Osborne says has been dealt with

It’s high time that this mendacity was exposed for what it is. Government has done very little about its spending, has appropriated three-quarters of all gains in economic output for its own use, has carried on piling up debt – and has tried to pass all this off as ‘responsible austerity’.

Those are the words of Dr Tim Morgan, the global head of research at financial traders Tullett Prebon, as reported in the finance section of the Failygraph. While the UK media prattles on in inane fashion about the ‘cuts’ – and retail the government line that they are addressing the structural deficit – the reality is that public spending is higher than it was when the coagulation formed this God-awful managerialist administration.

Don’t take my word for it, the official figures from the Treasury show the facts:

This is what Ministers have insisted is public spending being cut at a rate not seen since the Second World War.  But the total managed expediture has risen year on year, funded by ever higher taxation and, crucially, continued borrowing increasing the national debt.  This is the fact of the matter. All that has changed is how the money is being spent.

Yet against the backdrop of this reality we see the utter delusion of the political class, as exemplified by George Osborne on the day Britain announced a £10bn guarantee to the International Monetary Fund on 20 April 2012.

Dealt with the debt crisis?

Spending is up. Debt is increasing. Taxes are rising. Borrowing is continuing. Yet the Chancellor of the Exchequer tells the British public that the government has dealt with the debt crisis. This is not even parody, this is a claim that warrants Osborne receiving urgent psychiatric attention.

There was hardly any analysis in the media to get under the veneer of Osborne’s comment and tell the public the facts.  This leaves us with lies compounded by stupidity resulting in mass ignorance.  And it takes a bond trader to speak out before the media will take notice and run a small piece that is barely noticeable compared to commentary about the outfits worn to various events by celebrities.

They treat us with contempt. We should treat them altogether worse.

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From Ireland with grateful thanks?

According to the BBC, the Republic of Ireland’s finances are €3.6bn better off as a result of an accounting error.  That’s the luck of the Irish for you!  But then, when a country as small as Ireland can double count so much money is it any wonder they ended up needing an international bail out?

Given that the UK provided Ireland with a £3.2bn bilateral loan at the end of 2010, and contributed a further £2.6bn through the UK’s participation in the EU’s stability mechanism, surely Dublin will be falling over themselves to reduce their debt and show their good faith by sending this money back to the UK taxpayers who funded it.  After all, friendship goes both ways.

No need for a grand ceremony or giant presentation cheque, a simple transfer of funds and a ‘thanks very much’ will suffice.

Greece prepares to light the blue touch paper

These were the words that reverberated through the Brussels bureaucracy and world financial markets this evening:

“We trust citizens, we believe in their judgment, we believe in their decision.  In a few weeks the (EU) agreement will be a new loan contract… we must spell out if we are accepting it or if we are rejecting it.”

No one saw this coming. As the EU’s elite congratulated themselves on announcing their unfunded €1 trillion voodoo financial package, to shore up Greece and thus keep the Eurozone intact for a while longer, Greek Prime Minister, George Papandreou, was preparing to ask the Greek people if they accept the terms of the deal in a national referendum.

Moves are already afoot in Greece to declare such a referendum unconstitutional.  The political class dare not ask the people what they want.  It is not the EU way.  The Greeks will almost certainly reject the deal, seeing it as an element of the austerity measures that have resulted in strikes and civil disorder.  That will mean a default on their already huge debt, and crucially, despite all the EU’s assurances to the contrary, the likely departure of Greece from the Euro.

If Greece defaults and decouples in such a manner, other indebted Eurozone nations such as Ireland or even struggling Italy, might just consider doing the same thing, leaving a mountain of debt in their wake and taking the opportunity to rebuild their economies with a new currency and manage their own financial affairs in their own interest once again.  The Euro would be in serious trouble.

As Merkel said, if the Euro fails, Europe (EU) fails.

The one-size-fits-all chickens might now be coming home to roost.  We will all feel substantial pain, but it will be pain that had been caused by the vanity, incompetence, mismanagement and anti democratic behaviour of the political class that has treated the people with contempt. People will not forget.

The very foundations of the European Union will be shaken if Greece lights the blue touch paper and presses ahead with a referendum.  This could be the start of a turning point in European history.  We are heading into uncharted territory and the possibility of conflict cannot be ruled out.


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