come on: "bash it!"

telegraph: Taxpayers-face-2-trillion-unfunded-pensions-liability

source

I'd understand if we had a wide and strong export industry to then trash the Sterling obviously would make sense (for the Export lobby and foreign tourists) just as China and the US (and others) are doing it at the moment (to the extreme).

But to bash one's own currency in times where we are depending on imports, should avoid (importing) inflation and rather strengthen our purchase power comes very close to acting suicidal.

The entire bill of around £2.2 trillion would more than triple the size of the national debt overnight. It is entirely unfunded, so will have to be paid directly by future generations of taxpayers, rather than out of a pot contributed to by the pensioners themselves.

Well, how new is that?

Between you and me and the gate post: at least one of the economies that make the EURO is insolvent, officially; it's called Greece! Others, in fact the majority, are close to being insolvent and are definitely over indebted! And close to all of them face the same downturn, the same deflationary scenario and, believe it or not, very similar liabilities when it comes to public sector pensions etc.

They just don't talk about it!

Why do we?

Is there a specific hidden agenda we should get prepared for?

Carpe diem!

Budget 2009

A miracle: £606bn and it all fits in the Gladstone Box.

Joking aside, it is one thing to comment and tear apart the dice thrown projections but it is quite another to make suggestions, let alone present real solution(s). As much as we are all sceptical and critical of what the Chancellor had jump out of his box, what would you do if you occupied Number 11 or were asked by he who does how to bail this country out of what it is (free) falling into? And I mean “do” as in “action” referring to the big and important measures – not collecting peanuts while spending coconuts (I know: this allegory could do with even smaller but then also bigger nuts).

David Cameron will need a clear, clean and logical concept to make the difference; just talking and criticising – as much as it is necessary – will not solve anything. It is a global crisis and needs appropriate responses.

This global aspect has not really been taken in: one example is the worries over Sterling weakening because of UK’s disastrous debt levels; this has to be put into context; in this case it is an artificial currency called the Euro, a sleeper, just about to explode facing enormous “debts” and – worse – the suicidal imbalance between Euro Zone countries; that taken into account it should force us to do our homework and prepare for the explosion to come. While Nobody(’s) Darling speaks about a negative growth of -3.5%, Germany, the strongest part of the Euro Zone, officially discusses -6% and is afraid of social turmoil.

I personally believe to cure a disease you have to address the problem, the cause, its origin; then deal with it fast and furious, target-oriented; this is not done by presenting a carte blanche, call it “a bail out” and then watch a bank crunch mutate into a global economic disaster.

Carpe diem!

Tories to Break up Banks?

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/04/tories_to_break_up_banks.html

Breaking up, but afore…?

Dismantling a bank is the privilege of the owner; no doubt and it will be necessary.

Prior to that however, the new owner’s accountancy has the responsibility to take provisions for any risks of the new asset(s). It will be interesting to see what kind of provisions Alistair Darling will have foreseen in the budget on the 22nd of April for all of our new shareholdings in the likes of RBS. Knowing that 70% ownership and rising, does indeed result in full responsibility for any kind of risk within the balance sheet he should by now be in a position to declare and define such risks and take provisions:

“The background … is that Royal Bank's balance sheet is considerably bigger than the total output of the British economy and it liabilities are considerably great (sic) than the entire public-sector debt of the UK.”

(Peston Picks bbc.co.uk 9th April 2009)

It is a qualified assumption that realistic provisions would be the overkill for any budget, hence, it is likely those provisions will undoubtedly not be seen as a breach of any basic accounting rules; in return this will again and even more spectacularly demonstrate how artificial the system – for financial institutions among others – has become where budgets are based on arbitrarily bendable balancing rules, shadow budgets and resourceful loop holing.

Equality of opportunities?


Carpe diem!