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svrsig

Listed below are comments made by svrsig between Wednesday, 20th May 2009 and Thursday, 5th November 2009.

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Boxed in 7:40pm on 05 Nov 2009 Re: 26

I've got a better idea. Force interest rates up and enforce minimum repayment levels of unsecured debt to ensure repayment within three years. Confiscate and auction all assets where income is insufficient to achieve this. But .. let's be reasonable .. let's give people a year's warning that this will be brought in. And .. ratchet up repayment levels over another year. And .. open soup kitchens.
Is Britain growing yet? 5:21pm on 04 Nov 2009 Few understand statistics.

Inflation over the last 6 months is running at about 4% p.a. but the year on year figure is currently negative. Over the last 6 months therefore constant performance would, in principle, show as a 2% increase in pure money terms. Would this be reported as 2% growth (I think it would but perhaps someone could confirm)? If so then near-zero growth is pretty bad for current conditions. Growth figures are definitely influenced by inflation.
Bank reform: The radical way 4:26pm on 24 Oct 2009 Re 145:

if you want the Q4 2009 figures to show growth, you don't fiddle the Q4 figures - what you do is to fiddle the Q3 figures to suppress growth and then simply 'reveal' the growth later. It is much easier to suppress growth that to create it!
Bank reform: The radical way 3:37pm on 24 Oct 2009 Why does it need to be 'the radical way'?

If Government simply changed the rules about whether banks qualified for (i) government depositor protection and (ii) ability to issue 'fiat' currency from created debt (for which government have to license them) such that banks with 'casino' investment arms would NOT qualify - then the banks would split themselves up quicker than you could say 'integrity' (most bankers have difficulty with this word).
PM: 'We'll cut with Germany, France and the US' 4:27pm on 15 Sep 2009 Inflation may show up as -1.3% RPI at the moment but if you look at the last 6 months it is running at +3.8%pa (both CPI and RPI). So.. if government keeps spending we'll stoke up inflation so that everyone ebds up unhappy.

Cut now!
The real G20 breakthrough 08:34am on 08 Sep 2009 I now understand why there has been so much smoke from the French and the Germans. Hedge funds and bankers bonuses are a nice irrelevance to distract the media. The real issue in a fractional reserve banking system is the ratio of lending to core equity capital. Over ten is reckless. Over thirty is wildly reckless.

If only the money being lent was being invested in global exploration or manufacturing industry where large returns (mixed with risk) were expected as at one time it was then a ratio of ten (or more) could be easily justified. But if it just being used for mortgages or something, then we are doomed. Doomed!
Why banks must be allowed to die 2:16pm on 26 Jun 2009 So the Governor is being severely (and deservedly) critical of the Government. The IMF are saying (not in so many words) let's have a Tory government next as we can trust them to balance the books (again).

Perhaps the IMF will make it clear that if current Labour plans to 'increase spending' are not reversed then our soverign debt should be 'downgraded' - this way they could help get the right result at the next election.

Actually if Gordon is saying that spending will be increase, then this is the first sign that Labour intends to make cuts.

It is a pity: Gordon is so good at announcing impressive-sounding tax reductions and increased spending that are in the future (and when they arrive prove to be something already expected or swallowed up by some other bit of stealth). If only he would trumpet the necessary cutbacks (to happen in the future of course) it would please the IMF and we would all know it would amount to nothing.

It would (unforttunately) mean he would lose the next election as Tories are much better at making cuts intelligently and efficiently (and demanding value for money where extra money is spent).
Going to the country 9:10pm on 23 May 2009 Going to the country?

There seems to be a simple economic consideration for Tory MPs whether to own up and repay their expenses or to 'resign the party whip'. If there's too much money at stake then resign the whip. If you would do better by staying on, then give back some expenses and stay in the party. A more difficult choice for Labour MPs as they also run the risk of not being re-elected. But then they have a middle choice of brazening it out as their standards of integrity are lower.
Fears of deflation are not what they were 07:45am on 20 May 2009 Further to 32 - this means that the historical data of the previous 12 months will introduce a huge spike upwards in the declared inflation figures between September 2009 and December 2009, just when any rise in oil prices will be magnified (again in the published figures, not in reality) by previous falls dropping out of the data. Remember this is a huge spike upwards even if actual inflation is spot on target and no attempt is being made to reverse QE. Or raise interest rates (affecting RPI only).

July/ August 2009 therefore looks a likely date for an election before it all goes horribly wrong. Oh I forgot, this was the case just after GB took over and that opportunity was lost as well. Surely it can't have been planned this way?
Fears of deflation are not what they were 07:30am on 20 May 2009 Let us assume that the Bank of England suddenly pulls a lever and achieves a gentle and constant 2% p.a. inflation from now on and holds interest rates at 0.5%.

What would we see in terms of future inflation figures?

May to September 2009 : annual RPI of between -2% and -2.4% rising steadily to +2% by December 2009. This is therefore their aim.

May to September 2009: annual CPI of about +1% rising to +2% by February 2009, after peaking at +3% in December 2009. Again this is their (implied) aim.

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