Meanwhile Labour see no urgency whatsoever to reduce the deficit, and think it's fine to rack up the national debt even further so they can balance the books "as soon as possible".
What we should do right now is to stop borrowing from the banks and starting borrowing from the Bank Of England at 0% interest. We are just giving free money to the executive class and that is probably the reason why there is no urgency from any of the three major parties to get the debt down.
What we should do right now is to stop borrowing from the banks and starting borrowing from the Bank Of England at 0% interest. We are just giving free money to the executive class and that is probably the reason why there is no urgency from any of the three major parties to get the debt down.
Probably because they realise that the deficit needs to be eliminated before they can start thinking about getting the debt down.
The interest rate is much lower (2%) now than in those years, 85..90 it was at 12%, so your numbers are irrelevant.
If the interest rate was at its more normal rate, (which it will eventually have to revert to) we are looking at a complete meltdown of government finances.
Probably because they realise that the deficit needs to be eliminated before they can start thinking about getting the debt down.
Deficit/debt. They have no real interest in eliminating either.
The Tories are only making the right noises to appease to right-wing press and voters and I have no clue what Labour are doing.
They could cut out down those interest payments tomorrow if they started borrowing anything else they needed from the BOE at 0%. But then their paymasters in the City wouldn't let them.
Deficit/debt. They have no real interest in eliminating either.
The Tories are only making the right noises to appease to right-wing press and voters and I have no clue what Labour are doing.
They could cut out down those interest payments tomorrow if they started borrowing anything else they needed from the BOE at 0%. But then their paymasters in the City wouldn't let them.
It doesn't work like that, there is no free lunch.
The interest rate is much lower (2%) now than in those years, 85..90 it was at 12%, so your numbers are irrelevant.
If the interest rate was at its more normal rate, (which it will eventually have to revert to) we are looking at a complete meltdown of government finances.
UK government debt is mostly long dated and fixed interest and mostly not inflation linked. And inflation is at historically low levels anyway and below increasing GDP and we are owed a lot of money by foreign nations at higher interest and shorter dated than our own debt. So are current debt is in no danger of becoming unaffordable
We also have demonstrated that we are willing to use QE a side effect of which is that it drives down interest rate for new government borrowing. We have also demonstarted that we are willing to have the Bank of England forgive interest payments on the UK government gilts it holds making those goverment debts interest free. We have also cut government spending and lowered the tax gap between what tax we expect to collect and what we actually collect, and we now have a growing economy and the deficit has fallen, and inflation is low. We are in no danger of being unable to find people willing to take our new borrowing and in no danger or paying even historic average interest rates on new borrowing.
While we still need going forward to eliminate the structrual deficit which will require more cuts in public spending, we are in no danger of economic collapse in the foreseeable future.
In historical context as a perentage of GDP we are only paying as much or less in interest per year than we have paid in 36 of the last 58 years.
Helped by low interest rates. Which in turn have been assisted by £375 billion of newly printed money. The Bank of England now holds a third of all UK government debt.
Maybe I'm cynic, but now both Alistair Darling and George Osborne have had a taster for printing new money, it might give future chancellors some ideas.
It doesn't work like that, there is no free lunch.
But why doesn't it?
Techinically you can have the entirety of the national debt held by the BOE and none by commercial banks. And it could sit there at 0% interest rather than what we are borrowing. If we are paying £50 billion/year in interest payment then it seems an easy way to cut the deficit by paying off due loans and not renewing them in the commercial sector.
It is going to get increasingly difficult to balance the budget as the population grows and gets older.
It is going to get increasingly difficult to balance the budget as the population grows and gets older.
Which is why the next chancellor of the exchequer will be only to happy to pass the problem on to the one after that.
I do not know why Labour in general and Ed Balls in particular want to have a go at sorting out the mess of public finances. Winning the May 2015 general election is a poisoned chalice. We are not even half way through the austerity programme. The worse is still yet to come.
The moral danger of governments effectively printing money is they end up running permanent structrual deficits funded by printing money, which leads long-term to higher inflation or even out of control inflation due to money supply spiralling up and up as the government spends more and more unchecked as it can simply print money. Inflation ideally wants to be low or at least predictable to enable economic planning and investment by private enterprise and foreign investors and in the case of out of control inflation you run the risk of even social instability and collapse.
Government borrowing gilts are also not simply a form of government funding its spending, the selling and buying of the gilts by the goverment is used as a means of indirectly effecting money supply in the economy via using the banks who act as a multiple due to fractional reserve banking. The use of the banks to do this means that money supply in the economy is incresed through borrowing not just by the state but by businesses and the public and it is businesses and the public who are best at determining allocation of resources and investment and what goods and services are desired. We in effect attempt to stimulate economic growth through increasing money supply, if it works the economy grows, if it fails we have inflation but that is kept in check by virtue of the spending being via borrowed money which is paid back reducing money supply.
I gave up noboby was listening theyve bought the FIAT mindset
I bought most of mine between $400-700 my avg is $520
Im still buying when i can I see a dip to $1000 then all the way up to $5000 within 5 yrs
with TOTAL SECURITY
when the bail ins happen evryone will be bitching ill be laughing
as a example of the FIAT ponzi if you were a russian and been buying in roubles youd have seen a 40% rise
In November 1970 gold was $219.76, in Jan 1980 gold hit a high of $2,074.27 this was in a US recession with money fleeing to gold, it then fell over the years down to $354.57 Feb 2001.
Just before the current financial cirisis in November 2007 gold was $913.10. Money has unsurprisingly fled to gold with gold reaching a high of $1,917.53 September 2011 and as the world economies have started to recover it has unsurprisingly fallen $1,202.50 Dec 2014.
What makes you think gold will go up to $5,000 within 5 years? And why do you describe an asset that can go down as well as up in value as TOTAL SECURITY?
Comments
https://politicalmemestoday.files.wordpress.com/2014/11/working-to-pay-off-debt-freedom-meme.jpg?w=680
Maniacs.
What's the worry ?
In this country, we can print new money. Both the current and previous chancellors have done just that.
The annual interest payments on this outstanding debt is £53 billion.
This is 5 times the devolved budget for Northern Ireland.
And nearly twice the devolved budget for Scotland.
2013/14
Public sector net debt 1,402.2 billion 78.8% of GDP
Interest payments on debt 48.7 billion 2.8% of GDP
As a percentage of GDP debt interest was as high or higher in
2012/13 2.9
2011/12 3.1
2010/11 3.0
1997/98 3.3
1996/97 3.3
1995/96 3.3
1994/95 3.0
1993/94 2.8
1990/91 3.1
1989/90 3.4
1988/89 3.6
1987/88 3.9
1986/87 4.1
1985/86 4.3
1984/85 4.2
1983/84 4.0
1982/83 4.0
1981/82 4.1
1980/81 3.7
1979/80 3.5
1978/79 3.2
1977/78 3.1
1976/78 3.0
1968/69 2.8
1967/68 2.9
1966/67 2.8
1964/65 2.9
1963/64 3.1
1962/63 3.2
1961/62 3.4
1960/61 3.3
1959/60 3.3
1958/59 3.4
1957/58 3.4
1956/57 3.4
1955/56 3.8
Unless we ditch the Keynesian ponzi scheme of course.
I note you have stopped telling us to buy physical gold.... you must have lost quite a bit this year.
Probably because they realise that the deficit needs to be eliminated before they can start thinking about getting the debt down.
The interest rate is much lower (2%) now than in those years, 85..90 it was at 12%, so your numbers are irrelevant.
If the interest rate was at its more normal rate, (which it will eventually have to revert to) we are looking at a complete meltdown of government finances.
Deficit/debt. They have no real interest in eliminating either.
The Tories are only making the right noises to appease to right-wing press and voters and I have no clue what Labour are doing.
They could cut out down those interest payments tomorrow if they started borrowing anything else they needed from the BOE at 0%. But then their paymasters in the City wouldn't let them.
It doesn't work like that, there is no free lunch.
We also have demonstrated that we are willing to use QE a side effect of which is that it drives down interest rate for new government borrowing. We have also demonstarted that we are willing to have the Bank of England forgive interest payments on the UK government gilts it holds making those goverment debts interest free. We have also cut government spending and lowered the tax gap between what tax we expect to collect and what we actually collect, and we now have a growing economy and the deficit has fallen, and inflation is low. We are in no danger of being unable to find people willing to take our new borrowing and in no danger or paying even historic average interest rates on new borrowing.
While we still need going forward to eliminate the structrual deficit which will require more cuts in public spending, we are in no danger of economic collapse in the foreseeable future.
Helped by low interest rates. Which in turn have been assisted by £375 billion of newly printed money. The Bank of England now holds a third of all UK government debt.
Maybe I'm cynic, but now both Alistair Darling and George Osborne have had a taster for printing new money, it might give future chancellors some ideas.
But why doesn't it?
Techinically you can have the entirety of the national debt held by the BOE and none by commercial banks. And it could sit there at 0% interest rather than what we are borrowing. If we are paying £50 billion/year in interest payment then it seems an easy way to cut the deficit by paying off due loans and not renewing them in the commercial sector.
It is going to get increasingly difficult to balance the budget as the population grows and gets older.
If you look at these figures
http://en.wikipedia.org/wiki/Economy_of_the_European_Union
Out of the 28 member states
UK - 8th highest outstanding government debt (as %age of GDP)
UK - 7th highest annual government deficit (as %age of GDP)
Which is why the next chancellor of the exchequer will be only to happy to pass the problem on to the one after that.
I do not know why Labour in general and Ed Balls in particular want to have a go at sorting out the mess of public finances. Winning the May 2015 general election is a poisoned chalice. We are not even half way through the austerity programme. The worse is still yet to come.
and the UK's ability to print new money.
https://www.youtube.com/watch?v=4l06RhFoLE4
The moral danger of governments effectively printing money is they end up running permanent structrual deficits funded by printing money, which leads long-term to higher inflation or even out of control inflation due to money supply spiralling up and up as the government spends more and more unchecked as it can simply print money. Inflation ideally wants to be low or at least predictable to enable economic planning and investment by private enterprise and foreign investors and in the case of out of control inflation you run the risk of even social instability and collapse.
Government borrowing gilts are also not simply a form of government funding its spending, the selling and buying of the gilts by the goverment is used as a means of indirectly effecting money supply in the economy via using the banks who act as a multiple due to fractional reserve banking. The use of the banks to do this means that money supply in the economy is incresed through borrowing not just by the state but by businesses and the public and it is businesses and the public who are best at determining allocation of resources and investment and what goods and services are desired. We in effect attempt to stimulate economic growth through increasing money supply, if it works the economy grows, if it fails we have inflation but that is kept in check by virtue of the spending being via borrowed money which is paid back reducing money supply.
I gave up noboby was listening theyve bought the FIAT mindset
I bought most of mine between $400-700 my avg is $520
Im still buying when i can I see a dip to $1000 then all the way up to $5000 within 5 yrs
with TOTAL SECURITY
when the bail ins happen evryone will be bitching ill be laughing
as a example of the FIAT ponzi if you were a russian and been buying in roubles youd have seen a 40% rise
Just before the current financial cirisis in November 2007 gold was $913.10. Money has unsurprisingly fled to gold with gold reaching a high of $1,917.53 September 2011 and as the world economies have started to recover it has unsurprisingly fallen $1,202.50 Dec 2014.
What makes you think gold will go up to $5,000 within 5 years? And why do you describe an asset that can go down as well as up in value as TOTAL SECURITY?