It is Obvious

Chris Rick has got altogether too much to say

Archive for March, 2017

Don’t panic

Posted by chrisrick13 on March 30, 2017

It is obvious: the UK will not achieve ‘Brexit’

The nature of those in charge of the EU is exposed yet again.  After the referendum they were calling for immediate action.  Fortunately we are not so stupid or at least, on this occasion, our leaders were not.  Now that we have triggered the exit the EU leaders are dragging their heels.  Why is this?  Because of elections coming up in Germany and other countries.  Can’t blame them for acting in their own interest.  (I am slightly encouraged that Theresa has maybe employed some proper negotiators and is listening to their advice.)

However that is misplaced and shouldn’t they be acting in the interest of the people that voted them into power.  Oooops – none of them were voted in.  Refer here to Tony Benn’s 5 rules for the definitive guide.

So we start the negotiation with the EU delaying.  However the tone is one of stuffing the UK and not looking for a win-win.  The reason for that goes back to the referendum.  Had the remain group been able to name one real benefit of being in the EU they would have won the vote easily.  They could not give a single thing from the past that showed what a benefit there was from membership.  Only nebulous fears that would be alloyed by membership.  There is nothing the EU has done that could not be done just as well without the EU.

Still the debate is wholly economic.  In this area nobody knows on either side just how it will turn out.  My thought is that there will be winners and losers but net there will not be much difference.  What is more important is that we have regained the ability to make our own laws and have them interpreted and executed by our own judiciary.  Everything else is secondary.  You have only to look at the performances of Junker and Tusk yesterday for proof of  that.

That leaves me here to stick my neck out.

It is obvious: the UK will not achieve ‘Brexit’ as there will be no EU to exit from by the end of the negotiation process.

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I’m a broken record

Posted by chrisrick13 on March 29, 2017

It is obvious: I hope…

The Scottish are noisy.  No wonder they needed bagpipes to summon the clans.

The noise though is coming from the SNP this time.

After the referendum it was said that it was the last one for a generation.  We were all too used to the EU where questions were repeated until the ‘right’ answer was given.  Errr, did anyone get that in writing?  Thought not.  Goodness have they got no idea?!

So two years down the line ‘things have changed’ and a new referendum is needed.  That is one prediction even the BoE could get right.  Damn sure something would change over the 20 years of a generation.  Shows how disingenuous the SNP is…or rather the people at the top are.

But it is easy for the SNP.  Lets have a referendum every second Thursday in the month.  It costs the SNP nothing.  But it does cost you and me.

So it is time to up the stakes.

Yes, SNP, you can have a referendum any time you want.  Just drop £30m into the pot to pay for the costs.  You’ll get a lot back but I won’t have to pay.  If you really mean it then put your money…

We need a few more stakes out there.

The day after a referendum vote for independence the Bennett formula payments from the UK to Scotland stop.  £9bn a year less starting now.
You also need, Scotland, to start paying the interest for your part of the national debt and RBS.  Call it £300bn so only another £3bn a year.  You will also undertake to borrow the money from other sources and return it to the UK within 3 months.

What happens if there is a No vote?  Don’t want to be seen to unduly influence things.  If there is a no-vote then most of the devolution powers will be returned to the UK and Westminster.  The Scottish parliament can regulate haggis hunting and bagpipe production.

Not enough…all people with a birth certificate north of the border living and working in the rest of the UK will have their basic tax rate increased by…10%.

Now, SNP, you do have skin in the game and about time to…it’s all gone quiet over there.

(Thankyou Allan for that one.)

It is obvious: I hope…they let the English vote this time

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Posted by chrisrick13 on March 14, 2017

It is obvious: Och aye

The Scots hate the English and even more so after Saturday.  I think they want to leave the UK because of past wrongs and not for current reasons. England stole their oil for one.

The SNP wants an independent Scotland but also wants to subjugate Scotland to the EU. So they have muddled thinking there.

Another problem is that Spain has already said that an independent Scotland cannot join the EU. I don’t think it is much of an issue because unless Scotland is sharp about it there will not be an EU to join.

As far as the English are concerned the £6Bn or so that is the net contribution to Scotland is better spent in England.

Oil is not what it once was. Last year the revenue from oil was £61mn. There is not much money there. Also the big potential for more oil discoveries are all on land and seabed that would be very definitely English.

When Scotland goes it has to take a part the national debt with it. There is no treasury or money in Scotland so the first thing it will have to do is borrow a couple of hundred billion from somewhere. This will be secured against the revenue that Scotland can derive. Most of that will be from trade with another country…England. A country that might not be very well disposed to Scotland. If anyone were to lend the money to Scotland the interest rates would be, to say the least, interesting!

I guess that RBS will go to Scotland as will HBOS. More debt.

I am throwing GBPs about in the conversation. Is that the currency that Scotland will use? This will be a currency whose value is set by the…Bank of ENGLAND! The value and interest rates might not suit Scotland at all.

Scotland changes one master for another and goes to stand outside where an economic gale is blowing.

Does not make any sense. I wonder if the population can see how poor a deal it looks?

No matter. As long as Ms Sturgeon insists that the English get to vote as well, she will get her referendum victory – a big one.
It is obvious: Och aye…I hope

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I’m in a JAM

Posted by chrisrick13 on March 8, 2017

It is obvious: never a lender or a borrower be

The UK economy is in good shape. Manufacturing growing. Unemployment down. Employment up. GDP up. Inflation low. What could be better?

Lets start with national debt. The third biggest expense of the government is interest payments. If we had £51billion to spread about NHS, education, police, etc. how much better things would be. I’ve not mentioned personal debt or hidden debt through promises of future payments particularly pensions.

Other people are prepared to lend to the UK. If we keep on borrowing then at some point they will do one of two things. They will decline to lend more. They will only lend more if the interest rates are high enough. This is not an ‘if’ but a ‘when’. It is a ‘when’ because there is no prospect of us as a nation coming round to the idea of paying some debt off. There are two mechanisms that are employed. Increase GDP so that the debt is kept down as a percentage of that GDP or get inflation up so that the value of the debt is eroded.

Increasing GDP is not easy to do. The Government can encourage it and dropping the value of the pound certainly helps. It depends on other nations being able and wanting to trade with us. It depends on the government being competent.

Getting inflation up is easy. What happens when it rises? By various mechanisms interest rates rise. A lot of people will be unable to afford to pay their mortgages. House prices will fall. Not a bad thing I would say but you might think differently sitting in the middle of your possessions on the pavement.

At the moment it is possible to contain inflation, make a show of austerity, increase GDP or at least increase the numbers, keep interest rates low, keep house prices up.

The problem is that the options to control this situation are gradually disppearing. I still think it will be a trigger event that causes the collapse and by its nature that event is difficult to predict. (How about Le Pen for president? Trump didn’t do it though.) The elephant in the room is the many people, the JAMs, who are still in negative equity or who will be sunk by even small rises in interest rates.

It is obvious: never a lender or a borrower be – spend it

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Labour pains – still

Posted by chrisrick13 on March 7, 2017

It is obvious: I love a good socialist MP

This country owes a lot to Labour and the trades unions.  We would not be where we are without them (sic).  Together they changed the lives of millions of workers.  Safe and better working conditions.  Un-restricted pay.  Holidays!  A lot more.  The socialists running the Labour party took the votes of trades union members and were a force for good.

However the trades unions were vulnerable to takeovers by small numbers of ‘ists’: stalinists, trotskyists, maoists, and the rest.  These individuals did not for one second care about the lives of the people who voted for them.  They just wanted to destroy the British way of life.

It came to an end when, as Gerald Kaufman said, Michael Foot wrote the longest suicide note in history: the Labour party manifesto for the 1983 election.

Along came Saint Thatcher and made the unions much less vulnerable to takeovers by small numbers of ‘ists’.

But the people in charge of Labour were not stupid.  Step forward Tony Blair: 3 election victories and 13 years of power.  During this time I heard analysis that the Conservative party voters where 60+ year olds in the shires and soon the Conservative party would disappear to a rump of MPs in the home counties.  Times were bleak for conservatism.  The Labour party could continue with this formula for as long as they cared to.

However it all changed in 2010.  Blair resigned and the Labour party cared not to continue with something that gave them power and the opportunity to change things slowly over time.  The Labour party wanted to do it all now.  Step forward Jeremy Corbyn.  The Labour party took a step left the Conservatives followed them and UKIP stood up on the right to fill the gap.

The Labour party has a million or so dedicated socialists who are active, organised, dedicated to socialism.  What they have forgotten is that the trades unions members are not socialists.  The people who would have been in a union and voted Labour are not in a union…and they don’t see many reasons to vote Labour.  As was predicted for the Conservative party, much of the Labour voter base from the unions are 60+…and dying.

There are plenty of opportunities for the Conservative party to fail and hand power to some other group.  I see few opportunites for those well-meaning socialists to to stand up and take power.  They are too committed to their ideals to bend a little and take power.

I wonder what will come along and grab the old Labour voter base?  UKIP has more in common with it than Labour.  The Liberals might decide it is time to bend.  Something more extreme or just more bizarre might come along.  Scary times.

It is obvious: I love a good socialist MP – I’ll let you know if I ever see one.

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I’m out

Posted by chrisrick13 on March 6, 2017

It is obvious: nobody moves

The UK has a trade deficit with the rest of the world.  It is not a good state of affairs.  Either the UK will do something about it or the rest of the world will.

Our deficit with the EU is huge.  The leaders of the EU are threatening to, effectviely, stop the UK trading with the EU.  Likely done with trade barriers, tariffs and hidden barriers.  (You might remember that France declared that all Japanese VCR machine had to be inspected on arrival in France.  They set up a warehouse (just one) to recieve the imports and staffed it with a dozen members of staff.  They managed to ‘inspect’ maybe 100 a day.  The French population soon removed that barrier!)

That means that in the EU but in particular in Germany and Italy there are about 3million jobs paid for by the UK.  In return the UK has about 0.5million jobs paid for by the EU.  Put the barriers in place and their will be turmoil in the UK…for a short while until we start to make all that EU stuff in the UK.  We will likely see a jump in employment.  I see a lot of skilled retirees returning to work.

What will the loss of 2.5million jobs do to Germany and Italy?  My favourite scenario, the day after retaliatory trade barriers are created, is to listen in to the phone calls between the CEOs of BMW and Mercedees with Mrs Merkel.

It is a measure of the unsitability of the leaders of the EU for that task that they concentrate on a lose-lose scenario rather than a win-win one.

However for the UK the ‘lose’ part will be painful but short.  The ‘win’ will be big and long.

It is obvious: nobody moves or the EU will shoot itself

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