The Good News Keeps On Coming

[River Don]

Er yes, did you read the 2nd part of that story? The one sub headed 'gloomy reading'?

I'm a glass half full sort of person, you are obviously a glass half empty merchant.

Probably, I believe the economy is an energy construct and the globe is now facing an energy crisis. I don't see things improving very much for anyone for very long.

[IC1967]

UK to be biggest economy in Europe. Great, but it will only happen if the electorate cop themselves on and stop voting Labour.

http://www.bbc.co.uk/news/business-25519110

[River Don]

UK to be biggest economy in Europe. Great, but it will only happen if the electorate cop themselves on and stop voting Labour.

http://www.bbc.co.uk/news/business-25519110

So the UK is to become the largest economy, measured by GDP?

That will be a good thing if it means we are all going to become much more productive and living standards are destined to improve...

I suspect it means we're destined to become a far more overcrowded little island with a lot more people in low paid work, in which case it's not such great news.

[Dagenham Rover]

UK to be biggest economy in Europe. Great, but it will only happen if the electorate cop themselves on and stop voting Labour.

http://www.bbc.co.uk/news/business-25519110

Would you like to copy and paste that article and highlight the part  I have highlighted in your post.

Oh yes it dosn't  exist

[IC1967]

So the UK is to become the largest economy, measured by GDP?

That will be a good thing if it means we are all going to become much more productive and living standards are destined to improve...

I suspect it means we're destined to become a far more overcrowded little island with a lot more people in low paid work, in which case it's not such great news.

You could well be right. We will become more overcrowded but that could be perceived by some as a good thing as we need more young people from other countries to pay the benefits of our ageing population. If we stop immigration then the old will have to get used to a much reduced standard of living. I'd be all for stopping immigration and would be prepared to let the old pay the price. They've had it far too good for too long at the expense of our youngsters. We should be all in it together.

[IC1967]

Would you like to copy and paste that article and highlight the part  I have highlighted in your post.

I can't. The part you highlight is my own personal view (I would have thought that was obvious).

[Dagenham Rover]

Would you like to copy and paste that article and highlight the part  I have highlighted in your post.

I can't. The part you highlight is my own personal view (I would have thought that was obvious).

So you "accidentally"  forgot the  quotation marks   

[IC1967]

So you "accidentally"  forgot the  quotation marks

I wont take grammer lessons from someone who forgets to put a full stop at the end of a sentance

[River Don]

So the UK is to become the largest economy, measured by GDP?

That will be a good thing if it means we are all going to become much more productive and living standards are destined to improve...

I suspect it means we're destined to become a far more overcrowded little island with a lot more people in low paid work, in which case it's not such great news.

You could well be right. We will become more overcrowded but that could be perceived by some as a good thing as we need more young people from other countries to pay the benefits of our ageing population. If we stop immigration then the old will have to get used to a much reduced standard of living. I'd be all for stopping immigration and would be prepared to let the old pay the price. They've had it far too good for too long at the expense of our youngsters. We should be all in it together.

I wouldn't advocate stopping immigration at all. I just think we should be discriminating towards people with the skills we need. We do have plenty of skill shortages in this country.

What we aren't in desperate need of are lots more baristas and bar staff.

[Dagenham Rover]

So you "accidentally"  forgot the  quotation marks

I wont take grammer lessons from someone who forgets to put a full stop at the end of a sentance

You better start using your spellchecker as well  as learn where the full stop  is on the keyboard. (the . is just for you)

[IC1967]

I wouldn't advocate stopping immigration at all. I just think we should be discriminating towards people with the skills we need. We do have plenty of skill shortages in this country.

What we aren't in desperate need of are lots more baristas and bar staff.

I can see your point. I wouldn't be totally against very limited immigration for say 10 years until we train the people in this country to do the jobs where we currently have skills shortages. Then I would put the shutters up.

[IC1967]

Good old George. He's planning to cut another £25bn from the welfare budget if the tories win the next election. About time we had a party that's prepared to cut back the state to a more realistic level.

http://www.bbc.co.uk/news/politics/

[River Don]

Good old George. He's planning to cut another £25bn from the welfare budget if the tories win the next election. About time we had a party that's prepared to cut back the state to a more realistic level.

http://www.bbc.co.uk/news/politics/

Interesting that Cameron is making promises about protecting pensions in future, what with pensions being by far the biggest part of the welfare budget.

[IC1967]

Interesting that Cameron is making promises about protecting pensions in future, what with pensions being by far the biggest part of the welfare budget.

He's being very cynical (as are all the parties). He knows pensioners are the most likely to vote so he doesn't want to alienate them. They should have their pensions and freebies cut. It's not fair for the younger generation to have to pay the bill, especially as when they retire they won't get anywhere near what current pensioners get.

[BillyStubbsTears]

I see Osborne's been preening this morning saying how the recent growth shows that his policies have worked.

Brilliant quote this morning. Someone referred to this graph which I've posted a few times before.


Said Osborne claiming that his policies have worked was like a taxi driver taking you on a ten mile trip, getting lost, taking a 50 mile detour, finally finding your house and then claiming that he had The Knowledge.

Remember, every time you hear Osborne claim success: If our economy had grown since 2010 like it was growing IN 2010 when he took over, and like it has done coming out of every other recession in the last century, our GDP would now be about £150bn bigger than it currently is, and the wealth that we have lost since 2010 amounts to well over £300bn. Because we flatlined for 3 years, we are now poorer to the tune of about £5,000 for every man, woman and child in the country.

And now he says that because his policies worked, we need another 5 years of them...

[Glyn_Wigley]

Good old George. He's planning to cut another £25bn from the welfare budget if the tories win the next election. About time we had a party that's prepared to cut back the state to a more realistic level.

http://www.bbc.co.uk/news/politics/

He's not said that at all. But then, we don't expect you to read anything past a headline before incorrectly regurgitating it.

[IC1967]

UK new car sales highest since 2007. We are now second only to Germany in Europe. Keep it up Dave and George.

http://www.bbc.co.uk/news/business-25632668

[IC1967]

Inflation down to 2% is generally regarded as good news. However I disagree. What with all the loose monetary policy and Labour's alleged 'cost of living crisis' you'd think it would be much higher.

Not if you are an economics expert like me. It's all about demographics. Our ageing population will keep inflation low no matter what the politicians and BOE tries to do.

It won't be inflation they need to worry about. It will be deflation. You heard it here first.

http://www.bbc.co.uk/news/business-25726621

[Wiltshire Exile]

And the good news gets even better! I read recently that George Osborne is planning to restrict the subsidised rental of council houses to those earning less than about £70,000 pa. (Don't know if that figure is 100% accurate, so please correct me if not). That means people such as Bob Crowe, Gen. Sec. RMT - salary £145,00 pa - will soon have to start paying the market rent for his north east London property. Living there since 2001 has saved him about £78,000 in rental costs. Earning £145k pa and insists on paying subsidised rent when he could afford to buy. Talk about hypocrisy of the highest order! 

[Glyn_Wigley]

Our ageing population will keep inflation low no matter what the politicians and BOE tries to do.

So they can do as much quantative easing as they like and there's no danger of inflation??

[IC1967]

So they can do as much quantative easing as they like and there's no danger of inflation??

Of course. As long as they don't go totally ridiculous with it. The thing that the likes of you and Billy don't get is that inflation is caused by growing dynamic young populations. We are the opposite of this so inflation is not a danger.

Unfortunately there is only me and a few other proper economists that realise that deflation is the big threat. It will be too late when people come around to my way of thinking.

[IC1967]

And the good news gets even better! I read recently that George Osborne is planning to restrict the subsidised rental of council houses to those earning less than about £70,000 pa. (Don't know if that figure is 100% accurate, so please correct me if not). That means people such as Bob Crowe, Gen. Sec. RMT - salary £145,00 pa - will soon have to start paying the market rent for his north east London property. Living there since 2001 has saved him about £78,000 in rental costs. Earning £145k pa and insists on paying subsidised rent when he could afford to buy. Talk about hypocrisy of the highest order! 

Good news indeed. You don't need to look much further than trade union leaders for incredible hypocrisy. You also wouldn't believe the nice pensions and expense accounts they have as well.

If I were George though I'd go much further. I'd regionalise the limit. For example in Doncaster anyone earning over £20,000 a year shouldn't be living in a council house. They should be made to rent in the private sector or buy their own house.

[turnbull for england]

Buy their own house you say, well the obvious flaw in that  plan is RTB, with discounts the average rtb price in Doncaster is way below comparative homes on the open market, so once youve arbitrarily decided that a working family who have made use of say overtime or had a promotion  at work can no longer rent the home on the estate where they have built up relationships and have kids settled in school, then they just buy it  for probably the same as the rent they were paying and certainly less than you can build / buy an equivalent replacement for.

Possibly an over dramatic term, but what your proposing is basically a financial cleansing of an area, so that kids who do live in the homes where worklessness is a way of life or who will never earn ( officially) £20k a year, dont get to to live in a settled, sustainable area  as eventually the only people they will see as an example of how to 'succeed' and have a nice car holidays etc will be those who can work off the books or outside the law.   

Think about it, youre a married man with two kids earning 19k a year and you get chance of some extra responsibility at work that will push you over the threshold, out of your house  and mean you are no better off if not worse off once youve found and refurnished your new home, of course then the work slows down, the extra work is pulled and you cant afford to pay the new mortgage so you lose everything , and end up back where you started all because you took a 2k rise at work.

I fully accept Council housing is a scarce resource under intense pressure, but to kick people out for trying, seems ridiculous to me               

[IC1967]

We need to get rid of Right To Buy before people realise what a good deal it is at tax payers expense. I can't for the life of me work out why everyone that can afford it (and it is the vast bulk of council house tenants) have not worked out what an incredibly good deal it is. Carrying on paying rent is totally ridiculous.

So we need to stop subsidising rents and we need people to stand on their own two feet and take responsibility for their lives. It should only be the very poor in Doncaster that get help with their housing needs. The vast bulk of council tenants could afford to pay 'market' rent levels or if they don't like the idea of that they should buy their own house.
We are very lucky in this part of the world that house prices are so low. Why people don't take advantage of this is a complete mystery to me.

[IC1967]

IMF raises UK growth figures. Good job George didn't listen to their advice before.

http://www.bbc.co.uk/news/business-25823217

[River Don]

Global unemployment is still rising, despite economic 'recovery'.

http://www.telegraph.co.uk/finance/jobs/10584384/Global-unemployment-on-rise-despite-economic-recovery.html

How long can the UK keep swimming against the tide? Only while Osbourne keeps the sugar rush of debt going for the next election.

Mirage?

[IC1967]

Mirage? I would say more than likely. However this mirage has released 'animal spirits' to use some jargon that economist types like myself tend to use. These animal spirits could conceivably keep things ticking along quite nicely for a while.

Confidence is a huge factor in achieving growth and whilst I agree it is being generated by debt, for the most part it is a good thing in itself. Inflation is not a risk due to our ageing population so lax monetary policy will not have the usual ramifications. Deflation is the threat so we need to keep this recovery going at all costs or we are all doomed.

I still think we are doomed and it will all end in tears. Unfortunately I don't have the ear of George or Mark Carney and fear they are blissfully unaware of the threat of deflation despite it staring them straight in the face. How on earth can they explain a low inflation rate of 2% when they've been doing all they can to keep it well above this rate to inflate away the National Debt?

In 'normal' economic circumstances inflation would now be much higher than it currently is. Mark my words, it will continue to fall and there is nothing they can do about it until we reverse the trend of an ageing population. Unfortunately this is not something that can be done overnight. It takes many years.

Inadvertently, immigration is helping the cause but that brings many drawbacks with it. On balance for the long term good of the country we need much more immigration. Unfortunately it comes with a very high cost in the short term and as we all know, politicians only concern themselves with the short term.

The public are also very anti immigration now as well so it is very difficult for politicians to allow the kind of immigration we will need. If only Labour had introduced 'controlled' immigration we'd have been alright. Unfortunately their incompetence has led to the killing of the goose that laid the golden eggs.

[River Don]

I did not know you're a fully qualified exponent of the dismal science.

Those 'animal spirits' will only remain while the housing Market is being pumped with more debt. So let's keep spending money on foreign tat and putting it on the slate, sounds like a plan!

Personally I doubt inflation is really as low as ONS is telling us, tinkering with statistical tricks like hedonics disguises the true picture.

Inflation has remained high for four years despite the UK staging the weakest recovery of any major economy. And what of all the QE money? At some point that's going to rear its ugly head in the form of inflation.


Anyway, looking further ahead, here's why I think you're wrong about deflation in the longer term. For better or worse we now live in a far more connected, globalised world. It's the rebalancing of the global economy that is currently driving western living standards down. In the wider world we see a growing population, growing more affluent and consuming ever more. However oil supply is under pressure, we aren't able to produce more oil than current levels and as time goes by it only gets ever harder to keep that supply up.

Growing demand and restricted supply can only mean rising prices.

[BillyStubbsTears]

Animal spirits Mick? What was it you said about the man who coined the phrase "Animal spirits" when you were Mick v2.0?

Oh aye. You said he was a "crank".

Pointless as ever Mick. Witless witterings.

[IC1967]

RD you are right to some degree. However what most economists forget about is the power of demographics. It is an all powerful phenomenon. When this part of the equation is against you there is no quick fix and other factors pale into insignificance. Inflation should already be much higher than it currently is according to current economic thinking (which forgets about demographics). It is mainly down to demographics.

It's easy to check my theory. Just do a check of inflation in the world and you will find it is the countries with a young population that has high inflation and countries with an ageing population that have low inflation. Look back over the decades and you will see I'm right.

Until now we have avoided deflation. It is my view that we will not be so lucky this time around.