John Ward – The Saturday Essay : Why There Is No Recovery, The Debt Has Risen By 40% In Three Years, And The Real Liability Is Three Times Bigger Than You Thought – 14 December 2013

osbornecoopfinal(Well I think he said ‘bird’ anyway)

If every government, bank, civil servant and mainstream medium is mendaciously corrupt, does it make any difference where you live? The Slog offers some startling figures to suggest that, if you live in Britain, it is going to make an enormously negative difference.

Last Thursday, the Berlin government let it be widely known that they are all over Deutsche Bank as regards its long-term involvement in gold price manipulation. That investigation is still in its early stages, but another one to do with Forex exchange rate fiddling is hotting up. Deutsche is forced into pulling this kind of crap for one simple reason: its balance sheet is hugely exposed to attack from the giant moth lepidoptera derivitas. And that isn’t helped by new U.S. regulations forcing foreign lenders to hold more funds….to which DB is, yes, you guessed, the most exposed.

So anyway, we have QE manipulating the stock markets (legal), Zirp depressing interest rates (legal), the world and his mother directionalising the gold price (illegal but we don’t want to talk about it), Barclays and the Libor scam (illegal but nobody in the slammer) and now Deutsche and its Forex fiddling (illegal, and for entirely venal reasons Berlin is taking it seriously at last – ditto gold).

Not forgetting, of course, Goldman Sachs and its seminars for Greece, How to lie to Brussels so you can borrow even more money off us, RBS the SME impaler and its myriad glitches, Italy’s statistics authority inventing the recovery that never was, Cameron lying about degrees of UK employment, Osborne inventing his own cpi measure while ignoring OBR/ONS numbers, Merkel lying to the Germans about her Grexit intentions, Obama lying about the US unemployment figures, Draghi subordinating bondholders at Greekbailout2, and the EC removing the entire contents of Cypriot Banks.

I have drawn a discreet veil over empty Spanish banks (and politicians conspiring there to get Party debts written off), Britain’s Shadow Chancellor lying about how he helped f**k up the Coop bank and then gave it to hedgie vultures, and the huge fines (set-asides, sorry) paid out by JP Morgan, HSBC and a host of other firms for variously laundering drugs cash, mis-selling junk, and taking contradictory client positions. There are also various carpets beneath which we have yet to look – and very probably in those instances, the past will be a near-perfect guide to the future.

Never in the field of human investment have so many been misled, cheated and then asked to cough up by so few. And never in the field of human justice have so few gone to jail for serial grand larceny inflicted on the many.

But this isn’t enough, oh dear me no. There are two more things we must do in order to prove ourselves worthy of our masters. First, we must rename our savings “risk assets exposed to bank failure” and become creditors not customers. And second, we must stop sniping at all these people who have such a difficult job making ends meet on our money. Criticism and electoral abstention are just plain childish.

We must empty our pockets, and fill our hearts with the love than knows no understanding….or, put another way, makes no sense.

At the moment, the main players in this heist are the American Federal Reserve, the European Union, Wall Street, the City, the Berlin Government, and China. But everyone and his mother, it seems, are lying their heads off while performing three-shell tricks in the street. So does it make any difference where you live now? I think it does….if you live in Britain.

Within our government here in the UK, a man-to-man marking system has been employed since Day One of the post 2008 nonsense. Thus William Hague does anything Washington wants, Theresa May rolls over about everything EU-related, Boris Johnson licks every banker he can find, David Cameron cuddles up to Angela Merkel, and George Osborne says China is a wonderful place, and I’m sorry for being so nasty about you when I was in Opposition.

So to sum up, as all our investment alternatives have either been removed or replaced by Russian Roulette (and our political class zombied into service by the Invasion of the State Snatchers) there’s probably only one decision a Brit has left really: is it worth staying in Britain in the hope that the economy will recover and the next election will clear out the dead woodentops? Or should one leave for other climes…and why might they be better?

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Yet even here – at the last trump – the cards are stacked against us when it comes to amassing kosher information on which to base a decision.

Britain was last April branded a ‘crisis economy’ by incoming Bank of England governor Mark Carney. The Canadian compared the UK with basket case countries in the eurozone in a brutal assessment of the economic outlook. This was shortly after the IMF the same week had slashed its growth forecasts for the UK over the 2013-15 period, and warned that George Osborne was ‘playing with fire’ by sticking to his programme of spending cuts.

The general media view in Britain six months or more on is that Jolly George has proved them all wrong, and Britain is returning to growth. I have demolished this barmy idea enough recently to warrant not doing it again: suffice to record here that this isn’t what the OBR or the ONS data say, and it isn’t what Mark Carney thinks in private. The only thing left to ask ourselves, as men and women of common sense reality, is WTF has changed since April to make such a thing even possible, let alone likely?

The answer is nothing – things are, if anything, looking even worse. Our main trading bloc the EU is slithering back down the slope, starved of capital and torpedoed by austerity. China is slowing down, and our trade deficit with Beijing is as big as ever. And after seven false starts and five goes at QE (2 of which were ‘informal’) the US is steadfastly refusing to live up to the ludicrous term ‘boom’ bestowed upon it by Dan ‘Keeny’ Hannan three months ago.

This is how the Financial Times summed things up recently:

‘The performance since Mr Osborne took office in May 2010 has been dismal. Over three years, the economy has grown by a cumulative total of 2. 2 per cent. In June 2010 the Office for Budget Responsibility forecast that the economy would expand by 8.2 per cent between 2010 and 2013. The real figure may end up being a third of that. In the second quarter of this year, gross domestic product was still 3.3 per cent below the pre-crisis peak and 18 per cent below its 1980-2007 trend – the slowest British recovery on record’.

But that’s just the economic situation. The Tryannosaurus Rex in the room is The Debt. In 2012/13, gross government debt is forecast to be £1,412 bn or 90.3% of GDP [2. HM Treasury Public Finance statistics]. Since Carney’s April outburst it has increased, not reduced.

Georgy Porky says we’re going to undershoot the deficit forecast a bit (and he’s right – by £120bn  – wow, I’ve fainted, it’s a miracle) but a lot of this involves accountancy-pokery to do with Royal Mail and “QE profits”. Even were it remotely real, he would have to find that that sum every year from now on just to service the debt – because each year, it costs us £116.5 billion (7.6% of GDP) just to keep the tug sinking at its current rate.

The fact remains that when Sqeaky took over in May 2010, the gross debt was just under £1000 bn. [It is vitally important here to ensure one is comparing like with like: the confusion between national debt, government debt, net debt, gross debt, public sector debt, total liabilities, deficit and trade deficit is widespread among even the well-informed…and one with which all Chancellors play fast and free.]

I have compared Treasury gross government debt with its exact equivalent just over three years ago. Since then the UK government debt has risen by 38%.  If however you compare gross national with gross national, the result – 40% – is almost exactly the same. In other words, every which way you cut it, we are sinking deeper into the quicksand at an astonishing rate. There is no escaping this reality, no matter how you try: it is indeed a damning verdict on the Labour Opposition, and Balls in particular, that they have utterly failed to register this.

That fiscal outlook, of course, assumes no further banking problems here. Hahahahahahaahhaaaa. Osborne’s running total of austerity savings thus far is £20bn, including £5bn on cutting civil service costs. Now put that against the red column: £8.5bn of increased EU ‘subs’, £120bn in debt management, and a staggering £397bn chucked at QE. That last was aimed at sorting out the banking problem; we’d have been far better off using it to pay off debt. The banks are as unattractive and shaky as ever (the Coop proved it, and everything about RBS smells) and the idea that British banking – including Barclays, frankly – could survive even two bank collapses elsewhere is, well – barking.

Finally – fear not, this is the end of the doom – we cannot forget that a commitment is still a debt, it’s just in the future. I’ve boffed on about this for years, but nobody wants to listen. One huge problem is the Sir Humphreys and their illegal self-voting of increased pensions. For if economic failure, fiscal incompetence, and banking madness is the T-Rex in the room, then the pension liabilities are Godzilla in the downstairs lav.

Everything the bureaucrats do costs. For example, the Cabinet Office’s Efficiency and Reform Group costs £72 million a year to run. Since May 2010, to send the children of diplomats and military officers to public schools has cost the taxpayer a disgraceful £500m. Civil servants are almost all still retiring at 60, and the pay bill rose from £165 billion in 2009/10 to £171 billion last year. However, it’s their illegal pension entitlements that condemn Britain to death.

Perhaps the best calculation of this I’ve yet seen was the one put forward by the Taxpayers’ Alliance just as Camerlot-sur-Clegg gained power. It looked like this:

The official public sector debt quoted in the budget – £890 billion (Remember, my figure was gross)

Unfunded public sector pensions – estimated at £1,283 billion
Unfunded state pensions – estimated at £2,717 billion
Other – including the Local Government Pension deficit, PFI, and nuclear
decommissioning – £398 billion
This total – which doesn’t include bank debt – shows the real future costs we have to afford – a form of words which I think should now be adopted at all times: I suggest this to stop the playing about with the truth, it is the reality rather then the spin, and because it is my idea and there might be money in it. [I left out the bank debt included by the TPA because the lies told about what they still owe us are so obfuscated as to present a task similar to lassoing ghosts].

Even without that friends, the grand total is £4.6 trillion. Today, it’d be close to £5.4 trillion.

So the next time Nobsore crows about an undershoot of £120bn, you can waft away most of the smoke, and see where the mirrors have been strategically placed.

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My own decision to leave the UK was based on factors that go beyond these. But for those who are interested, I  can lay out the main ones in no particular order as:

* The rising cost of living in Southern England

* Having had my net worth halved following the end of a marriage

* The feeling (shared by many) that things are going to get a lot nastier in the UK for those engaged in the job I do

* A dislike of and general distaste for contemporary English culture, and the gangsters making it steadily worse

* The silly valuations put on housing in the UK

* The economic and fiscal mountain Britain must climb – but obviously cannot with the population level it now has

* The lack of farming land exacerbated by a foolhardy building boom in those areas where the climate most favours agriculture

* The destruction of the Rule of Law by the Conservative Party, and the inability to grasp real Equality before the Law in the Labour Party

* The weather’s better down here

* The wine’s better and cheaper down here

* The air’s cleaner down here

* There are no traffic jams down here

* There’s 64% of the UK population on twice the arable land versus the UK here

* The concept of a social weal in which the citizen comes first is still alive.

So yes, I do think it makes a difference where you live. The difference is one of attitude, sense, subsistence discipline, space, and quality of life.

www.hat4uk.wordpress.com / link to original article

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