It is Obvious

Chris Rick has got altogether too much to say

My word is my bond – update

Posted by chrisrick13 on December 21, 2010

It is obvious: there is a lot of information comes at us.

Since my last entry I have read that the government borrowed £23.3bn last month.  Did you realise that is £466 on your behalf.  That is up on last year and it seems that the borrowing target of £148bn (have you got your £3,000 ready) is going to be exceeded.

This is by a government that is being pilloried for the cuts it is making.  Cuts I see no cuts.

As our national debt is at 65% that 10% extra borrowing takes us perilously close to 85% of GDP.  Indeed GDP is not galloping ahead and might even start to come back to meet the borrowing.

Why is 85% important?  That is the level at which the consensus is that the country is now in a trap and cannot avoid default on its debts.  It varies from country to country.  For example Japan can easily manage 3 times that because of its national savings rates.  Alas we can’t.

The whole point about cuts is that if we don’t then what will be done to us is a lot worse.  If we do cut and still default then we have the worst of both worlds.

My only hope is that the cuts have not really started and take a while to have an effect.

Another update, but not new stuff.  The money lent to the banks in the crunch is £300bn so that’s £6,000 each.  They repay it over the next 3 years which means that we need banks to thrive…but everyone wants to bash the banks.  Perhaps they should be asked if they want their 6000 quid back or not.  By-the-by they won’t have much to spare, as a result, to lend to anyone and that means mortgages, just in case you were daft enough to think about buying a house.

It is obvious: there is a lot of information comes at us and it is tricky knowing what to ignore and what is correct.

2 Responses to “My word is my bond – update”

  1. Cynical Cecil said

    Just out of interest we didn’t all lend the banks £6,000 – it was just the taxpayers. This means for those that pay its a lot more than just £6,000. Some of the people (Majority? Minority?) who want to bash the banks are those who fear that their benefits will be cut and they won’t get their money back ‘cos they didn’t pay it in the first place.

    Mind you – do you really think you will get your money back? I think not! The best you can hope for is that the tax rise on the horizon is delayed for a bit.


    • rick chris said

      I was just providing a ‘put it in perspective’ number not attributing who the money came from. If you start working out who actually pays taxes it gets a bit frightening as you said. Then it gets complicated as well because government money does not only come from personal taxation.

      Your point is very well taken.

      I have been disingenuous by picking out examples in isolation and have entered the world of spin. No matter how you try it is impossible to write purely objective stuff. Even in textbooks and dictionaries there are the author’s own biases. Not that the blog is anything but my own biases!

      I have put together a number of predictions for next year, but they are so obvious I wonder to put them out. My biggest fear is that there will be a collapse. One of my triggers will happen and a country or a company will disappear and that will take down another and another and another. I am also concerned that the Chinese are poised to takeover the world. They really will be running things…unless they have a collapse and that is not impossible either. I just can’t find good news anywhere in my heart and it then comes back eventually to over-population. That will be the driving factor, but as we have discussed, over what time period? Too short a one.

      On that happy note…Merry Christmas.

      Chris Rick

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