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#G375* – A Completely Unsustainable National Debt = YOU ARE £121,500 IN DEBT + YOUR BORROWINGS!

Posted by Greg Lance - Watkins (Greg_L-W) on 14/11/2010

#G375* – A Completely Unsustainable National Debt = YOU ARE £121,500 IN DEBT + YOUR BORROWINGS! Sealing of the Bank of England Charter (1694)Image via Wikipedia

From: Greg Lance-Watkins
eMail: Greg_L-W (Greg_L-W@BTconnect.com)
Tel: UK: 01291 – 62 65 62

http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od#3139408   
An excellent documentary & you have 27 days to watch it in so do NOT miss the chance.

Having watched the documentary with little surprise but considerable horror it seemed apposite to use some of the facts therein to start to build on information from other sources – not least of which was the work of Simon Muir – The figures I have used have all been sourced or checked against The Office of National Statistics, The Tax Payers Alliance and for basic info Wikipedia!


UPDATE AS AT MID DAY Monday 15-Nov-2010:

This morning, official UK national debt will exceed:

EIGHT HUNDRED AND SEVENTY-THREE BILLION,
SIX HUNDRED MILLION POUNDS

£873,600,000,000

see <
http://www.taxpayersalliance.com/debtclock/about.html>

Note: including off balance sheet debt, the real figure is approximately
£8tn (million-million), equivalent to about £122,000 per UK Subject.

Dear Editor,
 

I read with sadness, after 13 unlucky years of Labour, the further irresponsible claims by MPs Primarolo and McCarthy and others regarding public sector spending cuts and benefits changes in the media (Bristol Evening Post – Friday 13-Nov-2010 [I note again 13!] 
http://www.thisisbristol.co.uk/news/Benefit-changes-affect-88-000-people-Bristol/article-2882849-detail/article.html ).
 
I would remind your readers that Ms. Dawn Primarolo used to be Paymaster General – her irresponsible profligacy with other peoples’ money led largely to her nick name of ‘Red Dawn’. Not only has her publicly-funded career made her rich beyond the dreams of most of her constituents, indeed most of the electorate, one would have hoped she might, by now, know a little about the state of the public finances!
It seems not in keeping with her economically illiterate associates.
Labour’s legacy is nothing short of fiscal ruin.
Here are the real figures we ALL have to address after the 13 unlucky years of Labour profligacy redolent of Lady Thatcher’s claim: “The problem with Socialism is that it very soon runs out of other peoples’ money”.
By midnight on Saturday, 13th November 2010, the OFFICIAL national debt will be more than:

EIGHT HUNDRED AND SEVENTY-TWO BILLION,
SEVEN HUNDRED AND FIFTY-THREE MILLION POUNDS
£872,753,000,000


The rate at which it is GROWING is roughly the same as:


* the total cost of BOTH Afghanistan and Iraq conflicts,
every forty days,

* the Bank of England‘s gold reserves, in 49 days,


* the budget of the Welsh Assembly, in 35 days,


* the entire Defence budget, in just over 60 days.


or Bristol Council’s annual budget every twenty hours.


The UK has run a budget deficit (i.e. increased our debt level)

every year for the last 13 unlucky years.

This debt currently is well over than THREE TIMES more than it was at the start of those 13 unlucky years.
Even duplicitously trying to buy popularity for 13 unlucky years, by increasing the Kleptocratic QUANGOcracy to create a ‘Salary Vote’, the public resoundingly rejected Labour
I am sure you will have found the numbers above to be enormous however even so they do not include:
* unfunded public sector pensions (including Wales’s & its EU Assembly),

* unfunded state pensions for the whole population,


* Private Finance Initiative (PFI) schemes, which in the 13 unlucky years transferred almost every aspect of State ownership into Private hands that it could,


* Network Rail,


* nuclear decommissioning,


and other ongoing & future commitments.


When these are added-in, the true figure is an unimaginable:

EIGHT TRILLION POUNDS
(£7,900,000,000,000)


This is more than five and a half times our annual National turnover (GDP: Gross Domestic Product).


Per person (man woman & child in Britain), this means roughly:

ONE HUNDRED AND TWENTY-ONE THOUSAND, FIVE HUNDRED POUNDS EACH
(£121,500)


Cardiff with a population of 324,800 share of this debt is a ‘mere’ £39,463,200,000


Wales with a population of 3,009,000 share of this debt is a ‘mere’ £365,593,500,000


City of Bristol with a population of 440,000 share of this debt is a ‘mere’ £53,460,000,000.


Manchester with a population of 440,500 share of this debt is a ‘mere’ £53,520,750,000


Birmingham with a population of 1,016,800 share of this debt is a ‘mere’ £123,541,200,000


Glasgow with a population of 588,740 share of this debt is a ‘mere’ £71,531,910,000


Scotland with a population of 5,168,500 share of this debt is a ‘mere’ £627,972,750,000


Labour MUST take the bulk of the blame for this during the 13 unlucky years (the numbers don’t lie, even if the politicians seem habitually to do so), but that’s pretty much irrelevant really. 

Unless this debt is dealt with, our children will almost indubitably ‘enjoy’:

* no pensions at all, of any sort,


* no education funding for their children,


* hyperinflation and monetary collapse,


* no state benefits at all, of any kind,


* no retirement, except for the rich.


I believe this to be an optimistic summary when one considers that not only are these United Kingdoms grossly and obscenely in debt but they are unable to fund the education of their youth, nor feed themselves without import and are unable to fund their own Navy nor provide air cover and further they are committed to paying £48,000,000 per day on a rising and uncontrollable basis to their foreign masters.


In terms of optimism if there is to be any hope and any meaningfull future not just for these United Kingdoms but for our future generations change MUST be radical and hardship will prevail for a generation.


Even so like us, it is probable that our children will die in huge debt. This is through no fault of theirs. It’s a debt that, unless policies change rapidly and radically, might NEVER be paid off.


A debt which will bring misery and hunger into every home in the land as we watch our children suffer with no hope and no future.


It remains an urban myth that countries do not go bankrupt: ask any German about the Weimar Republic.


It would seem the only lesson we ever learn from history is the clear realisation that we learn nothing from history but some may remember that The Weimar republic, crippling inflation led poverty, the anarchic rise of Nazi violence and the inevitability of world war was a product of a system of Quantitative Easing to devalue the Mark to fund the immeasurable debt of Germany!


I believe these numbers are actually so frightening that our political leaders, even if they are not themselves in denial, dare not tell us the truth about the scale of the problem, that they themselves have created and hence the lies and bluster of self serving fools like Dawn Primarolo & Kerry McCarthy.


Seen in their true context of the very real debt, the present pusillanimous ‘austerity measures’ look not just banal but ridiculous. The most urgent and important issue right now is why the inane coalition is not doing more, and faster.


We may not like the truth but we, our peoples and our Country’s only hope is unconditional acceptance of swinging and painful cuts together with an immediate commencement of negotiations for withdrawal from the EU – a luxury for bloated politicians that not only can we no longer support but which it is morally reprehensible that we pretend to.


For greater clarity may I commend Channel Four’s excellent documentary:

http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od#3139408

Additionally you may find this helps to clarify the enormity of our position:
http://www.businessinsider.com/niall-ferguson-sovereign-debt-crisis-2010-11#-1
As may this video:
 

Regards,

Greg_L-W.
Greg Lance-Watkins.

 
Notes to editorial staff:
————————
 

1. “Deficit spending” means spending money we neither have nor earn.
The rest must be covered by MORE unsustainable borrowing.
The ‘budget deficit’ commonly talked about is ONLY this amount.
It is nowhere close to the actual total of government debt irresponsibly incurred in our name.
 

2. We pay compound interest on all ‘on-balance sheet’ debt, however some of the ‘off-balance-sheet’ debt represents
future liabilities, on which we do not pay interest until that spending becomes actual (yet!).
 

3. Figures above derive from the Office of National Statistics the Taxpayers Alliance, and other official statements on expenditure (City Budgets, etc.).
 

4. None of the above includes PRIVATE debt: overdrafts, credit cards, mortgages, loans, etc. That is on top of the £121,500 which is YOUR share of the nation’s current debt.
 

5. For a straightforward explanation of the scale of this, see:
<http://preview.tinyurl.com/2u7asam> (Channel Four’s recent programme on UK public debt). The programme’s numbers do NOT include ‘off-balance-sheet’ debt, hence, although staggering, are about 1/8 of the full figure.
 

6. It is hard to understand in the light of the facts what exactly students are clamouring about as their education costs as a debt are paltry relative to what they already owe! They will be well advised to seek qualification in something more relevant than Media Studies or European
Studies, psychology or IT (Games Design!).

7. In view of the size of the debt, the cuts on Police budgets and the certainty of a crime wave poverty driven is it any wonder that our Police are merely tax collectors and box tickers failing on all fronts to acquit their duties to the public just as are OUR other public servants
like Politicians.


Regards,
Greg L-W.

PLEASE ADVERTISE US ON YOUR WEB SITE
LET THE PEOPLE DECIDE

http://www.Leave-the-EU.org.UK

With a FORUM:
http://leave-the-eu.org.uk/forum/index.php
 

My Full CONTACT DETAILS
http://GregLanceWatkins.blogspot.com

SOME of my BLOGS
http://StolenKids-Bloggers.blogspot.com
http://StolenChildhood-Bloggers.blogspot.com
http://StolenOyster-Bloggers.blogspot.com
http://StolenTrust-Bloggers.blogspot.com
http://GL-W.blogspot.com

ON POLITICS
http://www.Leave-the-EU.org.UK
http://UKIP-vs-EUkip.blogspot.com
http://TheMidnightGroup.blogspot.com
http://CaterpillarsAndButterflies.blogspot.com
http://JuniusOnUKIP.blogspot.com

EUroRealist
http://www.SilentMajority.co.UK
 

EUroRealist-Subscribe@YahooGroups.com
 

“In politics, stupidity is not a handicap.” Napoleon Bonaparte (1769-1821),
Regards,
Greg L-W.
for all my contact details & Blogs: CLICK HERE  
British Politicians with pens and treachery, in pursuit of their own agenda and greed, have done more damage to the liberty, freedoms, rights and democracy of the British peoples than any army in over 1,000 years.
The disastrous effects of British politicians selling Britain into the thrall of foreign rule by the EU for their own personal rewards has damaged the well-being of Britain more than the armies of Hitler and the Franco – German – Italian axis of 1939 – 1945.

Make your vote count vote:
INDEPENDENT Leave-the-EU Alliance
or Write on YOUR ballot Paper 
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Posted in Bank of England, Borrowing, Dawn Primarolo, Debt, George Osborne, Government debt, Gross domestic product, Labour, National Debt, Office for National Statistics, ONS, PFI, Private finance initiative | Leave a Comment »

#G338* – BankofEnglandAct.co.uk – Call4Reform – Douglas Carsdale MP + THE Petition

Posted by Greg Lance - Watkins (Greg_L-W) on 14/09/2010

#G338* – BankofEnglandAct.co.uk – Call4Reform – Douglas Carsdale MP + THE Petition

BankofEnglandAct.co.uk

Douglas Carswell MP leads the way on monetary reform
Dear Greg,

This Wednesday, Douglas Carswell MP (Conservative, Clacton) will introduce legislation into the UK parliament that takes the first step towards ending fractional reserve banking. As Steve Baker MP describes:

Douglas‘s Bill would assert property rights over demand deposits. Real savings – term deposits – would be loaned to entrepreneurs, delivering an economy built on save and invest.

This would have the effect of making fractional reserve banking impossible, requiring a shift to full-reserve banking (where the bank either lends your money, or keeps it safe, but doesn’t claim to do both at the same time!). In plain English, it would stop private banks being able to create money as debt.

Steve Baker MP explains this in further detail here:

http://conservativehome.blogs.com/centreright/2010/09/carswell-on-bank-reform.html

Once Douglas Carswell has made his presentation in the House of Commons this Wednesday, I’ll send you the full text of the speech, and hopefully the video, along with some ways that we can support this move.

We’ll have further news in the next few days as well.

Ben Dyson, on behalf of the Bank of England Act team

However my comment to them is a first stepping stone – without leaving the EU our Government in Brussels will never permit Britain to enact law as the new Constitution Lisbon Treaty states.

Let us hope Call4Reform accept that or they are misleading their supporters.

Here was my comment:

Hi,

on a completely cross party basis founded on irrefutable logic – there is absolutely no reform of any consequence that will materially alterANYTHING of consequence, for as long as Britain is but a vassal region of the supra national EU experiment which has so clearly failed.

80% of all our laws are merely the rubber stamping of the diktat of the malign centralised dictator committee and the balance 20% must be compliant with its aims.

So until Britain is a sovereign nation again with a domestic Government elected by its own people – YOU can leap up and down all you like but you are utterly irrelevant even as an MP – MPs are merely paid a substantial sum to act as super annuated social workers and maintain the pretence of democracy.

Hence though we support your initiatives as individuals your initiative is utterly irrelevant unlessd you support our organisation at:

Although registered with The Electoral Commission as a Party ElCom are entirely in acceptance that we are NOT a party but an Alliance

Without our success you have no role in making law just more hot air – however noble the aim.

Regards,
Greg_L-W.

Towards the end of Leave-The-EU may we commend you keep up to date with our web site at:
Join our Forum

And read my blogs
And Richard North’s at http://EUreferendum.blogspot.com

AND Do All You Can To Help THE PETITION at:

Regards,
Greg L-W.

PLEASE ADVERTISE US ON YOUR WEB SITE
LET THE PEOPLE DECIDE

Copyright (C) 2010 Call4Reform All rights reserved.
You signed up for this newsletter at www.BankofEnglandAct.co.uk
Call4Reform
107 Fleet Street
London, EC4A 2AB

 



“In politics, stupidity is not a handicap.” Napoleon Bonaparte (1769-1821),


Regards,
Greg L-W.


for all my contact details & Blogs: CLICK HERE


British Politicians with pens and treachery, in pursuit of their own agenda and greed, have done more damage to the liberty, freedoms, rights and democracy of the British peoples than any army in over 1,000 years.


The disastrous effects of British politicians selling Britain into the thrall of foreign rule by the EU for their own personal rewards has damaged the well-being of Britain more than the armies of Hitler and the Franco – German – Italian axis of 1939 – 1945.

Make your vote count vote:
INDEPENDENT Leave-the-EU Alliance
or Write on YOUR ballot Paper 

Posted in Bank of England, Call4Reform, Douglas Carswell MP, Fractional Currency, PETITION | Leave a Comment »

UK – 3rd in the Global Millionaire Stakes (G025)

Posted by Greg Lance - Watkins (Greg_L-W) on 09/11/2008

UK – 3rd in the Global Millionaire Stakes (G025)

A study entitled “A Wealth of Opportunities in Turbulent Times” by management consultants the Boston Consultant Group, showed that in 2007 the number of millionaire households grew by 11.2% globally despite the ensuing recession.

The UK was listed as having the 3rd largest number of millionaires (668,000) compared with Japan 2nd (900,000) and the US 1st (4,884,000).The report also predicted that China (5th) would overtake Germany (4th) in 2008.

Patrios is minded that many of the millionaires in the UK have achieved their wealth via property development/ownership and will be intrigued to see the effect that declining property values will have on these figures next year, though we doubt that The President of Kazakhstan will be too concerned about his ‘secret £50m purchase’ of Toprak Mansion in the Bishops Avenue in Hampstead, North London as reported in the Sunday Times today.

From an Associate’s Blog

To try to put a value on Freedom is as futile as floccipaucinihilipilification and the metissage of our societies, as we rummage in the ashes of our dreams, the flotsam of our hopes and the jetsam of our lives.

Regards,
Greg L-W.
01291 – 62 65 62

I SUGGEST – since there is clearly no political party of repute, advocating or campaigning for withdrawal of these United Kingdoms from the EU and restoration of our independent sovereign, democracy, with Justice & the right to self determination in a free country:

Write Upon Your Ballot Paper:

LEAVE THE EU

Posted in $, £, Bank, Bank of England, British Pound, EUros, Finance, IMF, Interest Rate, Pound, USDollar | Leave a Comment »

Which Direction for the Pound (G024)

Posted by Greg Lance - Watkins (Greg_L-W) on 08/11/2008

Which Direction for the Pound (G024)

Despite last week’s interest rate cut of 1.5% the £ rose slightly against the dollar from $1.57 – $1.58 and similarly against the Euro from 1.23 euros to 1.24 euros. One school of thought is that the reduction may stimulate the economy thereby supporting the pound against other currencies.

Patrios believes however, this is only a temporary rise with a significant fall due shortly. The UK economy (according to the IMF last Thursday) is expected to contract by 1.3% in 2009 suffering the worst recession within the Eurozone.

This prediction is holding back any progress sterling may make and will prove a major force in seeing a reduction of the £ to around $1.40 before Christmas. Also, with the Bank of England likely to reduce interest rates again by January the pound is unlikely to stabilize until at least the middle of next year.

From an Associate’s Blog

To try to put a value on Freedom is as futile as floccipaucinihilipilification and the metissage of our societies, as we rummage in the ashes of our dreams, the flotsam of our hopes and the jetsam of our lives.

Regards,
Greg L-W.
01291 – 62 65 62

I SUGGEST – since there is clearly no political party of repute, advocating or campaigning for withdrawal of these United Kingdoms from the EU and restoration of our independent sovereign, democracy, with Justice & the right to self determination in a free country:

Write Upon Your Ballot Paper:

LEAVE THE EU

Posted in $, £, Bank, Bank of England, British Pound, EUros, Finance, IMF, Interest Rate, Pound, USDollar | Leave a Comment »

Expect a Bank of England Surprise Move next week (G023)

Posted by Greg Lance - Watkins (Greg_L-W) on 02/11/2008

Expect a Bank of England Surprise Move next week (G023)

Last month we predicted that the odds were in favour of an interest rate cut, which actually occurred. However, Patrios believes the MPC have got it wrong – the reduction was totally insufficient and another is required immediately and it needs to be far more substantial.

The price per barrel of oil has halved, unemployment is rising significantly and the banks are not passing on the interest rate reduction, as the LIBOR rate has remained stubbornly high. Whilst future inflation (as a result of an increase in the money supply and public expenditure) is of some concern, the reality of a significant recession/depression weighs far more on the minds of politicians and financiers.

It is our belief that the Bank of England will make a dramatic move next week to correct their error of last month. We would not be surprised to see a rate reduction of at least 1% and possibly (though it would be brave) as much as 1.5%.

However, this will have only limited effect if the LIBOR rate fails to move at a similar rate (there have been some indications in the past 2 weeks of LIBOR rates slowly reducing though banks are still likely to restrict reductions in order to strengthen their own balance sheets). An additional reduction of 0.5% is also possible in December or more likely January 2009.

From an Associate’s Blog

To try to put a value on Freedom is as futile as floccipaucinihilipilification and the metissage of our societies, as we rummage in the ashes of our dreams, the flotsam of our hopes and the jetsam of our lives.

Regards,
Greg L-W.
01291 – 62 65 62

I SUGGEST – since there is clearly no political party of repute, advocating or campaigning for withdrawal of these United Kingdoms from the EU and restoration of our independent sovereign, democracy, with Justice & the right to self determination in a free country:

Write Upon Your Ballot Paper:

LEAVE THE EU

Posted in $, £, Bank, Bank of England, British Pound, EUros, Finance, IMF, Interest Rate, Pound, USDollar | Leave a Comment »

63,000 Years of Brown Debt !!! #A04* (G025)

Posted by Greg Lance - Watkins (Greg_L-W) on 13/10/2008

63,000 Years of Brown Debt !!! #A04* (G025)

The financial crisis could be the euro’s death knell … and even end the shambolic EU

Hi,

Just a bit of a roundup this morning before you dash out and jump from the window, along with thousands of contrite Bankers & honest accountants, who as professional gamblers have clearly backed not just the wrong colour but isolated themselves in playing against the odds in a huge and unsecured gamble on a number, along with the Government that ‘Likes to say YES’ when handing out our money and increasing our taxes.

Consider the details of Britain’s debt which was somewhere in excess of £1.3 Trillion under the careful and prudent care of Gordon Brown Prudent as ever it had ONLY risen by £1.3Trillion during his tour of duty at a time when there were approximately 100 new stealth taxes to generate income to ensure financial prudence and a move away from ‘boom and bust’ economics he so frequently warned us of.

Then on top of the £1.3Trillion of debt he incurred for us he has had a great giveaway – in fact claimed to be setting the world an example of giving away the money stolen from the tax payers – normally tax is for the good of the society but under Gordon Brown tax has been to buy 3 elections for his old mate Tony!

Anyway to add to the £1.3Trillion we have £100bn.+ handed over to his banking mates in Northern Rock based in Newcastle on which Labour is dependent (one wonders if they were based in Surrey and called The Green Belt Bank whether they would have been bailed out with OUR money!), add to that his giveaway of £500bn. Of OUR money again to bail out his mates the bankers – I wonder what he did with the proceedes of the 600tonnes of OUR gold he sold!

So ignore the gold that is £1.3Trillion+£100bn.+500bn. Basing the figures on a low level of interest that means that you and I owe together with the rest of the population of Britain – except the Somalis, French, Germans, Sudanese, Nigerian, Pakistanis, Indians, Bangladeshis, South Africans, Sri Lankans, Spanish, Ghanaians, Zionists and their ilk will probably leg it a bit quick when they find they owe a lot of money!

Anyway that works out that Labour have Conservatively ie without a bleat from the opposition, have incurred us in £1.9Trillion so to allow for the odd bit I forgot let us call that £2Trillion!!!


A trillion is a one followed by twelve zeros—1,000,000,000,000.

In one year (taking account of leap year) there are 31,600,000 seconds.

1 trillion divided by 31, 600,000 seconds is 31,546 years.

It will take 31,546 years to count the first trillion dollars.

WELL DONE Mr. Brown:with such Prudence in 11 years since you took over managing Britain’s finances you have squandered so much money it will take over 63,000 years to count it!

OK so let’s put it another way since we all know roughly how long ONE Second is and most of us know how long it takes us to earn ourselves (after tax £10,000) – Well wee Prudence has incurred debt since he took over control of our finances in 1997 at the rate of £9,111.00 per SECOND.

Now the truelly staggering thing about all this is that I am NOT an economist, I did NOT get one of the youngest Doctorates from Edinburgh NOR one of the highest marks EVERGordon Brown DID.

Perhaps we should shut Edinburgh University Economics Faculty if this is the product!

I state I was not nor am I an economist but I was writing polemics about the inevitability of a credit collapse and the probability of 200,000,000 deaths across EUrope due to EU policy, EU over regulation and utter incompetence in the EU and its basic principles.

Perhaps Economics is the absolute Science of Being Fiscally Wise AFTER the event.Economists are the specialists who clear up the mess economists make!

There is possibly only one good thing about being Japanese and that is that Bushido dictates that if you are a leader and you screw up this badly you have the honour to commit ‘Sepuko’ – we would at least be rid of Gordon Brown and his immediate supporters & followers and as promised Peter Mandelson is ‘right behind him’.

To try to put a value on Freedom is as futile as floccipaucinihilipilification and the metissage of our societies, as we rummage in the ashes of our dreams, the flotsam of our hopes and the jetsam of our lives.

Regards,

Greg L-W.

01291 – 62 65 62

MAY I SUGGEST – since there is no political party of repute advocating or campaigning for withdrawal of these United Kingdoms from the EU and restoration of our independent sovereign democracy, with Justice & the right to self determination in a free country:

Write Upon Your Ballot Paper:

LEAVE THE EU

Posted in $, £, Bank, Bank of England, British Pound, EUros, Finance, IMF, Interest Rate, Pound, USDollar | Leave a Comment »

Which Direction for the US Dollar? (G022)

Posted by Greg Lance - Watkins (Greg_L-W) on 05/10/2008

Which Direction for the US Dollar? (G022)

Many analysts, politicians and investors are quite rightly asking which direction is the USA Dollar heading and is it sustainable? Since the second half of last year, the direction is unequivocally up.

In mid-July the dollar stood at a little over $1.60 against the Euro, but with the exception of one or two small set backs has risen since to the current level of $1.38

Last years weakness in the USA dollar may be attributed to a number of factors:
the widespread belief that the USA economy would move headlong into recession as a result of the sub prime mortgage crisis; the financial system would be hit particularly harder than those of other countries because of this crisis; and the Federal Reserve’s rather aggressive monetary policy response may result in systemic deterioration of the currency.

Despite these fears, the underlying USA economy has proven relatively robust compared to its overseas counterparts. In the second quarter, the economies of both Japan and the Euro zone contracted, with the UK remaining stagnant. US growth in the same period saw a rise of 3.3%.

Banks throughout both Europe and the Globe have seen a number of banking failures; nationalisations and mergers occur. The latest movements in the UK being the nationalisation of Northern Rock, the acquiring of Bradford and Bingley assets by Santander and the nearly completed acquisition of HBOS by Lloyds TSB.

The dollar has also been supported by the Federal Reserve Bank acting in such a way to prevent systemic risk – it allowed both Lehman Brothers to go ‘bust’ and Fannie Mae and Freddie Mac to be saved at the same time . Thereby providing confidence that both free market principles plus Central Bank intervention was, and is, possible.Naturally, there is the fear that the dollar’s relative strength may affect the US export competitiveness and weaker demand from Europe and Japan will take its toll.

However, there is some relief from emerging market economies which currently account for over half of US exports.

Michael Woolfolk, senior currency strategist at the Bank of New York Mellon is quoted as saying that the dollar is benefitting not only from weakening growth expectations at home, but also “While the United States has won the battle of the growth expectations for now, opinions in the market are deeply divided over the way in which Central Banks will respond to the continued rise in inflationary pressures”.
“If the US ends up winning the battle of the interest rate differentials, with the Federal Reserve lifting rates sooner than expected, the greenback has far more upside potential than many expect”.

Whilst third quarter growth in the US is likely to drop significantly, it must be borne in mind that a weaker economy is already choking back import demand and this trade deficit impact may prove supportive of the dollar. However, in order to sustain dollar strength the US needs to consume less and emerging markets such as China need to consume more – both of which are occurring.

In addition, the result of earlier dollar weakness has seen the growth in foreign direct investment (FDI) in the US. So a relatively cheaper dollar, gains in productivity and lower labour costs have enabled FDI in the US to rise by nearly two thirds last year to $277 billion. However, whilst FDI inflows would support the dollar, the latest budget forecasts from the US Council of Economic Advisers (CEA) which projects a record high deficit of $482 billion in fiscal 2009 may have an opposing effect.

Higher US interest rates may be required to maintain foreign inflows but if both budget and current account deficits surge and US interest rates remain at current level (or fall further) this would have a profound negative impact for the dollar.

Bearing in mind the current fear of a recession occurring it would be difficult to see the Federal Reserve even contemplating a rise in interest rates for some time yet.

The question as to whether the dollar’s rise is sustainable is difficult to predict at this stage. Too many negative variables may prove destabilising, but the Fed’s action preventing systemic risk as the result of the sub prime market; increasing foreign investment into the US and a relatively robust economy compared with Europe and Japan may enable a slow but gradual strengthening of the dollar to continue.

From an Associate’s Blog

To try to put a value on Freedom is as futile as floccipaucinihilipilification and the metissage of our societies, as we rummage in the ashes of our dreams, the flotsam of our hopes and the jetsam of our lives.

Regards,
Greg L-W.
01291 – 62 65 62

I SUGGEST – since there is clearly no political party of repute, advocating or campaigning for withdrawal of these United Kingdoms from the EU and restoration of our independent sovereign, democracy, with Justice & the right to self determination in a free country:

Write Upon Your Ballot Paper:

LEAVE THE EU

Posted in $, £, Bank, Bank of England, British Pound, EUros, Finance, IMF, Interest Rate, Pound, USDollar | Leave a Comment »

 
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