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SAN BERNARDINO IS THIRD CALIFORNIAN CITY SEEKING BANKRUPTCY

By Pete Moore On July 11th, 2012 at 8:42 pm

LA TIMES: San Bernardino seeks bankruptcy protection

San Bernardino, facing the possibility of missing payroll, becomes California’s third city in weeks to authorize a bankruptcy filing

First Stockton, then Mammoth Lakes and now San Bernardino discover that you can kick the can only so far down the road. These are just the hors d’oeuvres. The real action begins when cities like Chicago and states like Illinois and California meet reality. It might be one, two or five years away, but they’ll go bankrupt too. When it happens they’ll become extremely unpleasant places to be.

THE DIFFERENCE BETWEEN RHETORIC AND REALITY

By David Vance On May 24th, 2012 at 9:26 am

How does a Govenment help the private sector grow the economy? Well, contrary to what some sirens may tell you, it’s really quite straightforward. Ask any Austrian…

First, you CUT Government borrowing and reduce Government spending. Then, you reduce taxation. Allow people to keep more of THEIR cash is always a good idea. Next, you stop trying to manipulate the free markets, just let them work in the way nature designed to work. Finally, Government has to learn that it’s primary function is to GET OUT OF THE WAY of the wealth creators, let us do what we like doing without bureaucracy strangling us.

Why do I bring this up now? Well….you see…

The UK economy shrank by 0.3% in the first three months of the year, more than previously thought, revised figures have shown. Last month’s initial estimate from the Office for National Statistics (ONS) showed a contraction of 0.2%. The downward revision was due to a bigger contraction in construction output than previously estimated. Over the last year and a half, the economy has fluctuated between quarters of growth and contraction. In the final three months of last year, the economy also shrank by 0.3%, meaning the UK is back in recession.

The UK economy cannot grow unless the steps I outline are taken. Yet despite all the hype and rhetoric, Government is not doing as I suggest. It continues to borrow more and spending cuts have been less than 1%. Taxation is increasing for most people in the middle brackets. Small to Medium sized business is still being strangled in red tape and the decreases in Corporation Tax are all aimed at LARGE companies despite the fact that 95% of us work for smaller businesses. So, to cut to the chase, the economic policy being pursued is based on rhetoric not reality. And THAT is why we are doomed to remain mired in recession.

THE MADNESS OF THE IMF…

By David Vance On May 22nd, 2012 at 2:39 pm

Here’s a good rule of thumb. If the IMF think it’s a good idea – it’s usually not! Get this latest nonsense from Ms LaGarde;

 The International Monetary Fund has said the UK’s continuing economic weakness means authorities should consider more quantitative easing (QE) and even cutting interest rates.

That means Interest Rates go to effectively ZERO and then we print even more money. This is a recipe for disaster. Zero Interest rates punish savers and those on fixed incomes such as Pensioners. To my mind this is morally as well as economically wrong! As for the Keynsian folly of printing money, no sensible economist would suggest that is a good idea. That’s why politicians like it!

THE NON AUSTERE AUSTERITY !

By David Vance On May 15th, 2012 at 8:11 am

Here’s an article which echoes much of what I have been arguing over the past two years since the Coalition came to power. It concerns the gigantic lie about financial austerity being peddled by Cameron and his cronies.

Tullett Prebon, a bond trader, said that “public expenditures have hardly been reduced at all” and that claims of a “big cut in public spending is bare-faced deception”. Figures highlighted by the firm show that public spending actually rose during 2010-11 and fell by just 1.5 percent last year.

Government spending is more than £22 billion higher than it was in 2008 when the financial crisis erupted. The majority of extra money required by ministers to fill the black hole in the finances caused by the recession is being raised from extra taxes rather than cuts in Government spending.

Dr Tim Morgan, the global head of research at Tullett Prebon, said: “It’s high time that this mendacity was exposed for what it is. Government has done very little about its spending, has appropriated three-quarters of all gains in economic output for its own use, has carried on piling up debt – and has tried to pass all this off as ‘responsible austerity’.

THAT is the point, and it is a vital one. The UK is passing off racking up debt as “responsible austerity” and it is doomed to fail. The Government refuses to tackle the central issue of CUTTING it’s borrowing and sooner rather than later this will see it destroyed. There is no benefit of just talking about deficit reduction and the need for fiscal austerity if at the end of the day you do not actually DO IT!

MACAVITY

By David Vance On May 3rd, 2012 at 8:11 am

The Governor of the Bank of England, Sir Meryn King, has given a lengthy speech on what went wrong in the UK economy and WHY it went wrong;

‘So why, you might ask, did the Bank of England not do more to prevent the disaster? We should have. But the power to regulate banks had been taken away from us in 1997. Our power was limited to that of publishing reports and preaching sermons. With the benefit of hindsight, we should have shouted from the rooftops that a system had been built in which banks were too important to fail, that banks had grown too quickly and borrowed too much, and that so-called ‘light-touch’ regulation hadn’t prevented any of this. From the beginning of 2008, we at the Bank of England began to argue that UK banks needed extra capital – a lot of extra capital, possibly £100 billion or more. It wasn’t a popular message.”

Can you guess WHO took the power of regulation from the BOE in 1997? That’s right – LABOUR. If you recall, that decision was hailed as a magnificent success at the time.  And in 2008, when the game was more or less up and the BOE was pushing the need to get extra capital into the UK banks, it was unpopular with LABOUR.

In fact, we can be more specific than that. There was ONE man who was at the centre of both catastrophic decisions.

His name is Gordon Brown. The Macavity of British politics.

A REASONABLE PROPOSITION

By David Vance On March 24th, 2012 at 12:45 pm

Owen Paterson's comments were confirmed by the Treasury on Thursday

Northern Ireland Secretary of State Owen Patterson once again shows his superior understanding of economics compared to the Lilliputian Finance Minister Sammy “More Milton Keynes than Milton Friedman” Wilson

“Northern Ireland will be able to keep any cash saved by introducing regional pay rates for civil servants employed by Stormont departments, the Treasury has said. The statement confirms what Owen Paterson said in Thursday’s Belfast Telegraph — but contradicts Finance Minster Sammy Wilson’s claims that all the money saved would be sucked out of Northern Ireland’s economy.

If the proposals — which aim to reflect the different costs of living across the UK — go ahead, it will mean pay freezes for staff in areas where there is a large pay differential with the private sector. With civil servants here paid 12.3% more on average than those in the private sector, Northern Ireland’s pay “premium” is well above the UK average of 8.3%, Treasury documents revealed on Thursday.”

The Secretary of State exhibits superhuman tolerance when dealing with the witterings of Wilson.  Allowing the Executive to retain savings made means this could be reinvested in helping the growth of the private sector – our only source of future prosperity. If private sector salaries then grow, it follows the re-balanced public sector recompense would grow. And THAT is the way it should be.

 

US AIR FARES AND HOTEL RATES SOARING

By Pete Moore On February 27th, 2012 at 6:04 pm

Bernanke’s money printing is affecting more and more parts of the economy. Reports the LA Times:

For the third time this year, several of the nation’s major airlines raised airfares last week, with United and Continental airlines initiating a $4 to $10 increase in round-trip ticket prices.

Virgin America, Delta Air Lines, US Airways and American Airlines have matched the increase, but JetBlue Airways and the nation’s largest domestic passenger carrier, Southwest Airlines, have yet to follow […]

Also, the average hotel room rate in North America climbed 7% in January.

THE ROSE OF ENGLAND…

By David Vance On February 27th, 2012 at 8:58 am

Glad to see someone speak some common sense of the current boiling issue of asking those on Welfare to volunteer for some workplace experience;

The former boss of Marks & Spencer yesterday told firms to show some ‘backbone’ and stand up to anti-capitalist  protests over the Government’s work experience scheme. Sir Stuart Rose, who started out shelf-stacking and sweeping floors 40 years ago, said it was ‘baffling’ that anyone would complain about unemployed youngsters being given similar opportunities. He said parents should tell their jobless children to ‘get stuck in’ and snap up any opportunity at a time of high youth unemployment.

His advice should be taken seriously by anyone wanting to get into the world of work. Of course I recognise it would be preferable to get the ideal job on a decent paid salary. I also recognise that we live in a recession SO the question becomes one of making compromise, seeking out opportunity, and as Sir Stuart puts it, “getting stuck in”. If that means working for Benefit, what is the problem?

The answer is that this is a very big problem since it may well lead to falling unemployment and that is a bad thing – for the Left.

They are calculating that soaring unemployment is one of the key conditions come the next election that will help bring Labour back into power. They also calculate that by 2015 people will have forgotten that it was Labour that presided over the conditions that caused much of the unemployment in the first instance. So, perversely, it suits the hard left to do everything possible to sabotage the restoration of our economic fortunes. That is why they oppose Workfare and trot out their asinine cliches about slavery when in truth they seek to ensure millions remain enslaved to the pernicious drug of Welfare.

FUEL PRICE FAIRY TALES

By Pete Moore On February 21st, 2012 at 9:37 pm

The White House believes, as it always has done, that most people are stupid:

“WHITE HOUSE SAYS RISE IN GASOLINE PRICES CAUSED BY VARIETY OF GLOBAL FACTORS, INCLUDING UNREST IN SOME PARTS OF WORLD, FAST GROWTH IN OTHERS”

If you believe that, you’ll believe it’s why food, land, gold, silver, copper and sugar are moving up too, and that Ben Bernanke’s mad money machine has nothing to do with it.

 

US GAS PRICES SOARING

By Pete Moore On February 15th, 2012 at 4:40 pm

Average gasoline prices climbed up to$3.523 a gallon in the last week. The bow wave of price inflation is coming in, thanks to Ben Bernanke’s money printing. Never before have prices risen so high so early in the year, according to the Energy Department. Even in 2008, when prices went above $4 a gallon, prices rise above $3.50 until near the end of April. So you’re safe and secure from Bernanke if gasoline plays no part in your life.

I see also that the New York Fed reports today on the pick up in manufacturing with expansion in output and employment.

The ‘improving’ economy is becoming apparent even to those who failed to see Bernanke’s manipulation. It’s down the line that the Fed will also have to comment on the general price inflation running across the economy.