It is Obvious

Chris Rick has got altogether too much to say

Good news

Posted by chrisrick13 on November 27, 2011

It is obvious: I have a lot of time on my hands

You know me: one for good news.

Belgium is an interesting place.  They have not followed the current model of replacing a democratic government by one appointed by…I’m not sure who.  They don’t have any government!  They seemed to be bumbling along quite reasonably until Dexia.  I say until, but Dexia has been what it is for quite a while.  I can better describe it as until Dexia had to come clean.

Indeed the ‘coming clean’ is what we are all waiting for.  Banks are a big one.  European governments are another one.  The trouble is that once someone does come clean, someone else has to and another and another and very quickly the truth is out.

No matter, Belgium has had its credit rating reduced.

Hungary has just had its debt downgraded to junk levels.

Italy and Spain are paying record rates for their new debt and the price of old debt is forecasting higher levels.

The Irish are feeling aggrieved.  It has gone very quiet over there.  They have taken on all the bank debt and are suffering.  They ‘took one for the team’.  Indeed they did.  Now the population are in no mood to take any more.  Indeed they are starting to mutter about an improvement in their rescue terms given what they see on offer to other nations.  Do not forget that this is the nation that refused to ratify both of the recent European treaties and had to be asked a again so that they could get the right answer.  I wonder how many of the Irish rue the day they were persuaded to vote ‘Yes’ second or even first time round.  I also wonder what chance there is of getting the Irish to vote ‘Yes’ to anything in the future?  Perhaps if it came with a free £100bn gift they might.  Of course if they got that then everyone would demand one…Germany would have to dig deep to find that kind of money.  So you can be sure that there will be no more treaties requiring national ratification for a long time to come.

That is just a sample of the big things that are happening.  It is only a sample – there is much more out there.  The best is last.  Martin Weale has been interviewed.  He is a member of the MPC.  To remind you, this is the bunch of jokers whose sole task in life is to maintain inflation at 2%.  It sits at over 5% at the moment and they are doing nothing about it except QE which is generally accepted to have an inflationary effect.  I will quote him from the BBC interview:

It might be prudent to wait to see that the sharp fall in the inflation rate which we have been forecasting actually happens before making any further decisions

There are two observations I would make.  First: is this just a hope, something you are crossing your fingers and wishing for?  Or is it something you have evidence of and have been working towards.  Second: given the BoE record on forecasting there is a cast iron guarantee that inflation will not fall.

Again, I looked for good news and didn’t find any.

It is obvious: I have a lot of time on my hands.  Maybe I should fill it with a job.

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