|
is the British economy strong enough to survive another financial crisis
Last edited by: R.P. on Wed 17 Feb 16 at 18:11
|
I do believe the British economy can survive another banking crisis. We have to rebalance our economy away from financial services towards making things.
The Germans run a massive current account surplus because they sell products all over the world.
We run a huge current account deficit because we do not sell enough to the world.
We have to stop speculating on housing and property and move away from consumption towards manufacturing.
Come on Britain we can do it. We used to have a huge shipbuilding and textile industry. We had also a large a large car and motorbike industry selling all over the world.
|
>>We had also a large a large car and motorbike industry selling all over the world.
All of which were rubbish because they stuck with antiquated ideas, attitudes and processes and so the companies went out of business.
|
Also, read this quote.
"A 2009 report from PricewaterhouseCoopers, citing data from the UK Office for National Statistics, stated that manufacturing output (gross value added at 2007 prices) has increased in 35 of the 50 years between 1958 and 2007, and output in 2007 was at record levels, approximately double that in 1958.[9]"
If you want to read the whole report I've got it somewhere and can look it out and mail it to you.
|
|
I am going to give the UK economy a boast by eating a pizza.
|
|
I spelt boast wrong.It should have been BOOST.
|
|
You spelt Boast correctly.
|
|
Is boost spelt BOOST or BOAST. I would like to know
|
Boost is spelled boost. It is boast that is spelled boast.
Like the silent C in Fluffy.
|
We have had economic growth every year since 2008. That is at least seven years of economic growth. The last growth spell we had was between 1992 to 2008.That is sixteen years of continual growth that occured at that time.
Our trend rate of growth is 2 to 2 and a half.We are growing at trend rate.
I have no doubt that one day we will have a bigger economy than the Germans. Our economy is the second biggest in Europe, bigger than France or Italys.
We have zero interest rates, zero inflation and full employment and what more do we want
|
|
What do you class as full employment and and the correct level of inflation.
|
>> What do you class as full employment and and the correct level of inflation.
There are several different methods of counting employment/unemployment. The claimant count for jobseekers is one measure. There are people though folks who are desperate to work but will not get Job Seekers Allowance or Universal credit because of the contribution condition and/or the means test.
At the other end of the spectrum, how do you treat people, and there are several of us here, who are early retired and not actively seeking employment?
AIUI the most respected measure is the labour market survey which has a methodology for counting all seeking work while eliminating those who are 'economically inactive'. On that measure an unemployment rate of less than 5% is regarded as at or close to full employment. The 5% represents the 'slack' in the system such as those between jobs and also the 2% or so who are in reality too ill to work but are not well enough advised or organised to get a sickness related benefit.
|
What % do you class as full employment. If everbody who wants a job has a job is that full employment. People that have a disability are they considered part of the employed labour force.
I know people that have a severe disability that are in employment. Also these people need transport to get to work. They rely on the Motability component of Disability Living allowance to get to work. Is there anything wrong with paying people to get to work and get about in their car.
As a society how can we be so cruel in stopping peoples disability benefits if they need a car to get about.
|
>> What % do you class as full employment.
As I said above, less than 5% unemployment is, in reality, full employment. The employment market needs a certain level of people free to start, otherwise it will grind to a halt.
Beware of confusing visible disability (unable to walk) etc with incapacity for work. The people I was thinking of in my earlier post are mostly suffering from mental health related problems. They can walk and run but cannot cope with the rigours of employment. A benefit system structured around compliance and sanctions doesn't serve such people at all well.
|
>> We had also a large a large car and motorbike industry selling all
>> over the world.
Here is an interesting statistic
In 1990 the Uk manufactured 1,565,000 cars. In 2014 the UK manufactured 1,597,000 cars.
Over the same period Japanese car manufacturing has dropped by 4 million and France by 1.8 million.
I blame our entry into the EU myself.
Last edited by: Zero on Wed 17 Feb 16 at 17:37
|
Oh and Our highest single annual output of cars since 1950 was 2.3 million.
So as you can see, we have maintained a remarkably strong automobile manufacturing base.
|
Something I forgot to mention and which I want with my heart is a strong service sector. This includes our creative industry and our banking industry. I am saying that as a British person we should buy British whether that is a British built car or a financial service such as investing in a investment trust or pension plan.
Can somebody tell me what our surplus is in the service sector of our economy.
|
>we should buy British
Define "buy British".
Something built in the UK?
Something built by a UK based company?
Something built in the UK by a UK based company?
Of course, I assume you realise the potential implications for the exports of those companies? Since others may well do the same.
And why should we buy British? Whatever that is? What about British jobs in companies in the UK selling stuff belonging to foreign companies made outside the UK?
e.g. anybody in the UK who has got a job working for BMW servicing cars.
I think you have an overly simplistic view of international economies.
As for...
>>Can somebody tell me what our surplus is in the service sector of our economy.
Yes, he's called Google.
|
|
Is 0.5 interest rates too high or too low. What do you consider the correct level of interest rate for our economy.
|
|
15.4% interest rates is I believe too high.
|
>> I am saying that as a British person we should buy British whether that is a British built car or a financial service such as investing in a investment trust or pension plan.
>> >>
>>
>>
>>
You mean like Austin Allegros, Rover 200s and BSA Bantams?
Yeah, right.
|
|
Please don't forget the Tiger Cub RoR. I've got a soft spot for those 0:-)
|
You and me both MD, mine had dropped clip on's and a chrome tank!
Pat
|
|
Not sure I could bend that far now Pat!
|
Remember what it is to be English of course.
It's driving in a German car to an Irish pub for a Belgian beer, and then travelling home, grabbing an Indian curry on the way, then sitting on some Swedish furniture and watching American tv shows on a Korean TV which will soon be powered by a Chinese nuclear power station, whilst being suspicious of anything foreign.
|
>> Remember what it is to be English of course.
>>
>> It's driving in a German car to an Irish pub for a Belgian beer, and
>> then travelling home, grabbing an Indian curry on the way, then sitting on some Swedish
>> furniture and watching American tv shows on a Korean TV which will soon be powered
>> by a Chinese nuclear power station, whilst being suspicious of anything foreign.
Ironically, the Indian curry is pretty much a British developed dish.
|
Swap Indian curry for Turkish kebab?
|
|
The one made from a Norwich donkey that went AWOL last night?
|
|
My favourite takeaway is good old fashioned fish and chips. Even cod is going on the menu now .However my favourite takeaway is large battered sausage , spam fritter and chips.
|
|
Give me something that the UK is globally best at at in what we make.
|
>>Give me something that the UK is globally best at at in what we make.
Haggis.
I would have said whisky but the Japs appear to be getting the plaudits these days.
|
>> Give me something that the UK is globally best at at in what we make.
Folding bikes.
Dahon and Tern produce some nice machines but none are a patch on the UK's Brompton when it comes to all round use - foldability AND rideability.
|
|
Do you think its cheaper to take out a loan in yen rather than in pounds
|
|
I want the UK to have the best and best quality cars built in our country. I do agree with you on how many cars we build. I want us too build more cars even than the Germans. As you will be aware Nissan in Sunderland build more cars than the whole of Italy.
|
|
I would rather ride a Triumph than a Honda. I would also drive a Rover rather than a Toyota.
|
>> I would rather ride a Triumph than a Honda. I would also drive a Rover
>> rather than a Toyota.
Would that be a proper Rover? What about a Rover 100?
|
|
Remind me again how many trillions the national debt is. Still living beyond our means we don't have a viable economy.
|
Can't be that bad if that many people want to live here and make a living.
|
|
I agree, Dutchie, but our economy is a giant Ponzi scheme which will eventually end in tears.
Last edited by: Old Navy on Thu 18 Feb 16 at 13:24
|
>> I agree, Dutchie, but our economy is a giant Ponzi scheme which will eventually end
>> in tears.
your pension is part of the Ponzi scheme. You best hope the end is not too quick.
|
|
The employed participation rate for 16 to 64 years old is at an all time high of 74.1% Our unemployment rate is at the lowest in a decade at 5.1%.
|
>> The employed participation rate for 16 to 64 years old is at an all time
>> high of 74.1% Our unemployment rate is at the lowest in a decade at 5.1%.
I blame Europe.
|
>> Remind me again how many trillions the national debt is. Still living beyond our means
>> we don't have a viable economy.
>>
It would only be unviable if we were ever silly enough to try to repay it.
Supposing each month I gave you an IOU for a million pounds, and kept a record in my books of how much I owed, and you kept a record in your books of how much this debt was worth to you.
We could go on like that for ever. You couldn't spend your assets, I'd never need to worry about reducing my lifestyle to fund them. We could go on living next door, swapping vegetables and chatting over tea, and you would tell me how rich you were, and I would laugh and say I was millions in debt.You might occasionally ask for some interest, so I'd write out another IOU.
Would it matter? Our real economy would just keep pottering along happily.
|
Isn't any economy based about people being happy.If you are in work and can pay your way have a decent life.Food, a roof over your head and feel safe.
Not working, or working every hr under the sun to survive isn't the way to live.
Our Economy is based on debt and interest that is how banks make their money.You listen to any expert or economist they all have a different opinion how the world should be run.Just a thought.
|
>>I'd never need to worry about reducing my lifestyle to fund them.
We do, because we have to make the interest repayments and that reduces our means - just as a large interest only mortgage would.
>> Would it matter? Our real economy would just keep pottering along happily.
With low interest rates, maybe. The trouble comes when interest rates are higher and the previously issued debt needs rolling over. If that coincides with a loss of confidence in the currency or the government's ability to service the debt and a rise in gilt yields, then the boat well and truly capsizes.
But we know that we can't pay it off. It has been increasing on a scale of £100 billion a year. The net cost of servicing currently is around 5% of government income but that could increase substantially (see above).
The answer as ever will be a very large dose of inflation, which the government (of whatever colour) must hope for. Whether it will be achievable before Armageddon depends on getting some real growth, not the poor excuse for it we had had so far.
When it happens, the feckless with big mortgages and PCPs will rejoice, and those of us living on savings and pensions that can't keep up will just have to turn the heating off.
Last edited by: Manatee on Fri 19 Feb 16 at 11:01
|
>> >
>>
>> We do, because we have to make the interest repayments
>>
Do we? Does the government really take enough money from all of us to service the national debt? I suspect it just goes on borrowing, adding the interest to the outstanding tab.
|
>> >> >
>> >>
>> >> We do, because we have to make the interest repayments
>> >>
>>
>> Do we? Does the government really take enough money from all of us to service
>> the national debt? I suspect it just goes on borrowing, adding the interest to the
>> outstanding tab.
Clearly that is in effect what is happening, since the debt is going up, and has done by around 50% since 2010 under 'austerity'.
Ask an Argentine.
|
I would rather live in the UK than live in Japan. Alright Japan has zero interest rates but there is no spare cash. Japan is going the same way as Argentina. That is heading towards total economic and financial collapse.
At least our welfare state helps millions of people. The money has to be found somewhere. You know the billions come from taxation and Government borrowing. We can almost borrow for free.
Japan has piled up trillions and trillions of pounds in debt.
Roll on summer.
|
Our 10 year gilt yield is at a 300 year low of around 1.5%. In Germany it is at 0.25% whereas in Japan its 10 year gilt is almost at zero.In Switzerland it is minus 0.35%. In other words you have to pay the Government to borrow in Switzerland for 10 years.
What I would like to know is where did the UK Government find 27 billion pounds at the last autumn statement.
If the UK government can borrow for almost free money why will it not borrow to pay for improving our roads or bridges or our motorways. The government could re- mortgage our entire national debt and borrow for 10 years by issuing 10 to 15 tracts of bundles of debt issuing. That would pay off our national debt at much lower interest rates.
With borrowing costs so low I would issue road or motorway or bridge loan at an open ended debt issue. Like a War Loan but for our infrastructure.
I am not anti anything but trying to fight for Britain. There are too many pessimists that talk our country down.
|
|
Spend your saving and treat yourself.
|
|
Our national debt is about 1.5 trillion pound. About 81% of our national income. It can be paid off by issuing 10 year gilts along the entire yield curve. One bit of financial advice i can give is invest in UK debt but do not lend to the Government for under 10 years.
|
"One bit of financial advice i can give is invest in UK debt but do not lend to the Government for under 10 years."
Why's that, Fluffy? I'm really curious.
|
|
Id lend to the Government between 10 and 30 years rather than under 10 years. I do not trust the UK Government to keep inflation under control.
|
Better buy linkers then, which will still have a negative real yield - in other words, you are pegging to inflation less a bit.
Alternatively, buy conventional gilts on a 1.5% yield and take a capital hit when inflation and interest rates go up.
I'll stick with the short dated.
|
|
Three or six months rather than thirty years. The thirty year yield is about 2.3 %.
|
|
Our credit rating is AAA by the rating agencies. Only one of the three puts us at AA+ Not bad for a country up to its neck in debt.
|
|
As a UK citizen the level of national debt does not fear me. We can pay our way as our economic structure is too strong.
|
>> As a UK citizen the level of national debt does not fear me. We can
>> pay our way as our economic structure is too strong.
As evidenced by the trade deficit, the current account deficit, and rising public and government debt?
The government is flogging off everything in sight, a totally unsustainable approach, and still can't get near balancing the books. We are a basket case.
You are however right to fear inflation. It is the only way to avoid bankruptcy. Unfortunately, what it amounts to is stealing money from savers and giving it to borrowers.
|
When the Germans printed vast amount of money in the 1920s they ended up with hyper inflation. The Germans are fearful of even 5% inflation due to that 1920s fear.
The Bank of England should be in no hurry to raise interest rates as we have zero inflation at the moment. I fear this two year ahead policy In two years time we could be hit by a meoterite.
In other words I do not see any risks to the UK economy. I believe we can have an unemployment rate of 2% before there is any threat of rising inflation.
The Phillips curve has finally been broken. There is no threat from rising wages. Most people are happy to have a job than demand a pay rise.
|
|
Phillips curve was discredited a while back IIRC. But if you're saying "it's different this time" you're probably wrong. Gordon Brown said boom and bust was over, not long before the biggest bust in generations.
|
|
I blame the sub prime housing sector in the United States. There was a huge housing bubble in many parts of the United States. When that bubble burst in 2008 it took the entire financial sector down with it.
|
>> I blame the sub prime housing sector in the United States. There was a huge
>> housing bubble in many parts of the United States. When that bubble burst in 2008
>> it took the entire financial sector down with it.
Sub prime was a symptom or example of a malaise affecting banking in most of the advanced capitalist world. The underlying disease was a belief that n% growth per annum was possible and a remuneration system that incentivised risky behaviour and short term being prioritised over long term.
|
|
In Japan the government debt as a % of GDP is over 250%. In the United States it is over 102%. The UK figure is only 81%.
|
It is very easy for people to get into debt.We want the nice things or parents want their children to have things the others have.
Our big debt was the mortgage.Anyhting else we always have been carefull.There is always payback what people tend to forget.
|
|
If our personal money making was the same as the Government we would have no spare cash. We would have a huge overdraft we could not pay back. Governments are lucky. Sound financies are cheaper to borrow for the Government rather than an ordinary person.
|
"Sound financies are cheaper to borrow for the Government rather than an ordinary person."
Sorry, Fluffy - you're going to have to explain. I don't understand.
|
If we run spending deficits by the Government every year, eventually our entire income will be used to pay interest payments on our debt.
Charles Dickens was right.If we spend a penny above our total income we are bankrtupt. Spend a penny less and we are secure.
|
Do we want an economy like Hong Kong or an economy like the United States.
Or do we want a Wal-Mart Stores that pay minimum wage rates of pay for a wage they try to get away with. As you will be aware even Wal-Mart is closing 150 stores in the United States.
What I am trying to say is that even the most efficient companies can stumble and struggle in the most competative of markets.
|
|
Yes I believe we are strong enough to survive another financial crisis.
|
|
The UK boom begun. Where I live all I see is construction.
|
the British economy - fluffy
