“Would you like a double dip discombobulation Sir?”
“Oh yes please, er … does that come with ice cream?”
Oh if only it did!
I have seen so much about the chances, possibilities and effects of a double dip recession that the only way you could get me to read anything else about it now would be with an ice cream bribe.
As a layman I have been interested in and read about the economy now for years and years. The definition of who has more power, the politicians or the bankers, has never been more blurred. Once taken for granted as being the politicians most people are probably not sure these days after the coming of institutions that are too big to be allowed to fail and the realisation that up to seventy five percent of the British economy is financial services based.
Sterling, the humble pound in your pocket, is not the bedrock of respectability that it once was either. The US Dollar is the defacto trade currency in most international reserves and the Euro, love it or loathe it, is the new contender as an international currency of reserve and trade. Certainly the Iranian announcement a few years ago that they were to cease using the Dollar and use the Euro instead for reserve and trade purposes did more to dent their relationship with the US than any technological program ever has. The US economy stands because of its unique global position on the financial stage.
What is next for the UK in the recession. Is it over? Economists stopped talking about green shoots a long time ago but it must end one day. Are asset prices still too high? Will the government be trusted to service its debt obligations and therefore not lose its AAA rating? Will this be a double dip recession?
All interesting questions and all answerable if you bear a couple of things in mind. Firstly that all economies are globally intertwined and especially one such as ours because we have always been a great trading nation. Secondly that repeating recent mistakes for political purposes does not help.
The UK recession is as bad as it is because of vastly over inflated asset prices (houses, offices, retail developments, share prices, bonds, gilts), unregulated financial markets that rewarded short-term greed on an unprecedented scale and thereby led to the creation of the most complicated set of financial instruments that have yet been devised by mankind. The manufacturing sector has been worn away by globalist policies over preceding decades to the point that take away food is now a greater part of the economy of the UK than shipbuilding. Mismanagement of the economy during times of comparative prosperity led to a burgeoning public sector that lived on debt even then and cannot possibly be maintained now.
So back to the questions. Will this be a double dip recession? Yes! Asset prices have been falsely re-inflated by the Bank of England and their gargantuan quantitative easing program which has only recently finished and which may be restarted. Post election the government deficit must be addressed. Don’t talk to me about selling the banking shares because they have gone down in value twenty five percent since we bought them. The public sector spending and the public sector pensions deficit has to be addressed and sharply. Taxes will have to rise one way or another and the European Union is quite happy to be bringing in their own direct taxation sooner or later on carbon trading/energies (all fuels to you and me) which will stifle any recovery when it does come. This will slow down the important retail sector once again and bring back stories of insolvency and personal debt to the front pages.
Will the UK maintain its AAA rating and how will Sterling be affected? The thing to remember here is that we are in a bad way financially as a nation but so are lots of others. Currencies are seen in relation to those around them so though the value of Sterling will continue on its downward trend for a while before bottoming out while we work our way through the debt pile I cannot see it dropping off a cliff as some predict. The UK has a mature and diverse economy which though I as a Nationalist would like to change a few things for the benefit of the people I recognise its longevity. The AAA rating is in little danger unless the next government does little or nothing with our monstrous debt position in which case the International Monetary Fund will be called in a month after the General Election.
So I believe that the double dip is laid out ahead of us and the side dish of discombobulation comes with the roadmap for the way ahead.
How do the Labour and Conservative parties intend to effectively regulate the financial system? It would seem that they don’t which brings us back to the base point for part of the original problem. Talk about recent history repeating itself.
How are they going to deal with the credit system, personal and governmental, and when will they start? Neither party seems to know which should lead many to concern and hopefully lead them to seek an alternative Nationalist viewpoint.
In the mean time, pass me that ice cream!
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