Today some of the press has picked up on Mervyn King's conference and the BoE's Inflation Report yesterday and totally got the wrong end of the stick! The general headline is brimming with optimism and talks of recovery of the economy to pre-crisis levels by 2011. The slightly better reports add "or beyond".
Front pages today:-
EXPRESS - "Britain on the Mend"
TELEGRAPH "Bank governor hints at rates rise" And (Business News) "Two more years till Britain regains strength"
F.T. "Bank Lifts forecasts for UK growth"
WALL STREET JOURNAL "BoE forecast anticipates slow recovery"
The rest failed to use the front page at all. And The TIMES and THE GUARDIAN did not use the web edition Home page at all
In the Business Sections (or elsewhere) they managed
INDEPENDENT "King : We face a long wait for signs of convincing recovery Bank predicts tough 2010 before improvement in 2011"
These together with the broadcast media might give the impression it's just a question of patience. But alert readers will haqve noticed the crucial thing about all these reports!, namely, they equate resumption of economic activity with solving our crisis. hey totally fail on a number of counts.
== When the stimulus of various forms ends as it must because it is all 'borrowed money', economic progress will take a step backwards:- - -
-- All the scappage car sales will cease and normal replacement will not fully resume because scrappage has brought those sales forward. The car industry's troubles have just been postponed
-- When VAT goes back to 17.5% (if not higher) in the New Year retail sales will suffer
-- When QE ends the Banks' willingness to lend will decline
== Then all lenders are demanding that the budget deficit be eliminated by around 2015. That's going to cause one hell of a squeeze with public sector job losses and pay cuts. Nothing will be exempt and taxes may have also have to rise. Failure will mean a lowering of our debt valuation wilt the concomittant rise in interest rates which would be the inevitable precursor of bankruptcy.
At present the 'fools' paradise' is heavily populated by fools prepared to put at risk the whole future of our people while thy play politics. . Gordon Brown is not a total idiot - he is clevery spinning out the stulis to the economy (while making the mess far worse) until after the election when the whole shaky edifice will collapse.
Christina
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