Bob Diamond resigns

[GM-MarkB]

Breaking News....

mjdgreg fails to correct a gramatical error in one his alias' posts......

Filo wins by TKO

You need to concentrate more on my posts. I've been leaving the odd grammatical error on purpose  for Gypsy Rose Stubbs to find not Filo (or you).

So by that statement, are you, in fact, admitting that you and Marydene are, in fact, one and the same

[mjdgreg]

So by that statement, are you, in fact, admitting that you and Marydene are, in fact, one and the same

No we're not. Marydene has joined in with leaving the odd gramatical error that's all.

[Donnywolf]

..... mmmmm what does that remind me of ?

http://www.youtube.com/watch?v=z5effaImHsU

[Marydene Rover]

 I repeat I am not Mad Mick and never have been, my views are my own please treat me with a little more respect.
Also if I have made a spelling or grammatical error please let me know as I can't see it.

Thanks

Marydene Rover

[Filo]

I repeat I am not Mad Mick and never have been, my views are my own please treat me with a little more resepct.
Also if I have made a spelling or grammatical error please let me know as I can't see it.

Thanks

Marydene Rover

I know you`re not Madmick, I also know that you`re not mjdgreg (madmick), and I also know that you know him, despite you denying it, if you want respect then treat the forum with respect! mjdgreg (Mick) knows I know this, that`s why he keeps ignoring my question to confirm this

[mjdgreg]

Next instalment.


Now let's look at the endgame. That debt-to-GDP ratio will rise to at least 150%, while the economy is actually shrinking. If interest rates settle to a mere 7% (hardly likely), it means the people of the country are going to have to pay over 10% of their total production to foreign banks each and every year for decades, never mind paying down the principle.

Let's throw in one more twist. The country has been buying about 10% of GDP more from other countries than it sells to them. That is because the relative wages in the problem country are about 30% higher than in the "good" countries. The good countries get the money from what they sell and have a nice surplus. The problem country soon runs through its savings, trying to buy the goods and service it wants; and the private sector, as well as the government, must cut back.

What happens is that you are locking in what feels like a depression initially, and then you have a slow- or no-growth economy for many years, as so much of your work goes just to pay back that debt to the banks of other countries.

Understand, your government has freely obligated itself to pay that debt. But it means that its citizens in effect become debt slaves for a generation or two to foreign banks. Not a very popular platform for a politician to run on for re-election.

You all know what I think of crank Keynes. People who blindly follow his logic don’t have a proper view of the world. They live in a theoretical world divorced from what really happens. But in this respect they are deadly right. Austerity on the scale needed by many countries will only reduce potential GDP. The Keynesian prescription is to therefore run deficits and borrow money until you get growth again. Unfortunately they ignore the fact that when you have already exhausted your ability to borrow money, it just doesn't work.

More debt makes if far more difficult to grow your way out of the problem. If you are already drunk, you can't get sober by drinking more whiskey. If our problem country cuts its deficit by 15% of GDP, the reality is that GDP over time will be reduced by about 20%, and the debt will grow, both in real terms and as a percentage of GDP.

A 20% decline in GDP is by any standard a depression and makes it even harder to grow. This is because so much of what you produce has to be used to pay basic expenses and is not allocated as productive capital. If you have the burden of massive debt it becomes impossible.

That is why individuals can file for personal bankruptcy. We no longer force people into slavery or debtor's prison to pay their debts, at least in most places.

So our problem country goes to its lenders and says, "We think you should share our pain. We are only going to pay you back 50% of what we owe you, and you must let us pay a 4% interest rate and pay you over a longer period. We think we can do that. Oh, and give us some more money in the meantime. And if you refuse, we won't pay you anything and you will all have a banking crisis. Thanks for everything."

So as I see it there are two ways governments typically try to solve the problem. Default on the debt (which brings its own major problems) or inflate the debt away. Make no mistake the current policy of the UK government is to inflate the problem away. They won’t tell you this, but it is obvious that this is the strategy.

This is going to take many years and will gradually reduce everyone’s standard of living to the point where we are eventually living within our means for a change. It is going to be an extremely painful process and is being implemented because of the wasteful spending and borrowing of the previous Labour government.

My solution would be different and would get things sorted out in about 2 years. There would initially be a lot of pain but then the gain would come around much more quickly. At the moment we are bleeding to death. It’s no good keeping on pumping blood (money) into the body (economy) unless you are going to sew up the wound (cut the Budget Deficit) first.

[Filo]

Time to lock this thread now Mick, it`s run it`s course, it`s obvious now that no one wants to debate it any more, you`re now posting in reply to yourself and attempting to get a bite to continue this charade

END OF THREAD!