BBC BLOGS - Stephanomics
« Previous | Main | Next »

The most important question

Stephanie Flanders | 10:10 UK time, Friday, 1 October 2010

Economists have drawn such contrasting conclusions about the future of the recovery this week, you'd be forgiven for giving up on the lot of them.

Pound notes

 

First, we had the IMF giving Britain's economy a big thumbs up. It said the government's deficit plans had done wonders for our standing in global markets, and the recovery would be strong enough to withstand the cuts.

As Martin Wolf says this morning in the FT [registration required] - theirs was more a love letter than a sober report. George Osborne couldn't believe his luck.

Yet barely 24 hours later, a leading member of the committee that sets Britain's monetary policy offered a much darker view. Adam Posen said the Bank of England should rush to inject more cash into the economy, or else risk a long period of high unemployment and low growth. As I discussed in my post on Tuesday, he's an expert on what happened in Japan in the 1990s - and he sees a real possibility that we will have our own lost decade now in the UK.

So - you might say - economists can't agree. What a shock. Posen has one vote on the committee, out of nine. Another member, Andrew Sentance, is worried about inflation. He has already voted to put base rates up.

But there is a larger lesson here: that the most important question mark hanging over Britain's economy is not whether we suffer a double dip. The recovery will probably bounce around a lot in the next year - but none of these economists expects it seriously to go into reverse.

In fact, they all think we're looking at a slow and painful road out of recession - because slow and painful recoveries are what countries coming out of financial crises usually get.

The difference is that the IMF thinks that's the best we can get. Whereas Adam Posen thinks we could do better - and the Bank should try. I went into his reasoning in that earlier post, but the basic idea is that by pumping more money into the economy, the Bank could not just raise demand in the economy - but also the long run supply.

I described Posen's view as "subversive". In central bank circles, some of them are. This week,  two members of the Federal Reserve's policy committee also gave  contrasting speeches on the case for doing more. This stuff is hard: if the answer were obvious they would all agree.

But in both countries, you have to say the wind is blowing in Dr Posen's direction. Right now, inflation is much higher here than it is in the US, but the recovery in the UK, if anything, is a little bit weaker.

With the possible - very limited - exception of inflation expectations, it is hard to identify a single indicator suggesting inflation is about to pick up. And many on the MPC accept the point that under-estimating potential growth could carry a long-term cost.

Given the relative balance of risks, I think it's quite likely that the MPC will opt to do more QE by the end of the year - albeit less enthusiastically than Posen would like.

In normal times, pumping even more money into the economy would be a disaster. "This time is different" is the mantra that got us into this mess. Coming out of the crisis, central banks are still deciding whether this time, it's really true.

Comments

Page 1 of 3

  • Comment number 1.

    Simply ignore economists for a year......

  • Comment number 2.

    `...it's hard to identify a single indicator suggesting inflation is about to pick up..'

    Try the price of wheat.

    Inflation is running 50% up on expectations and plans. The Governor of the Bank of England is scribbling away his little notes each month to the Chancellor saying he has failed in his key measure.

    Yet a member of the monetary committee he chairs runs about the country demanding that the printing presses be set rolling. Another tells savers to spend all their money. What is wrong with these people? Have they been reading too much?

    These days even sex workers have the moral decency not to run naked through the streets. So why do central bankers think they can be different?

  • Comment number 3.

    Those in power will do all they can to prevent capital devaluation - their own personal fortunes are involved.

    But they can't continue this forever.

    Currencies will be debased & output will collapse.

  • Comment number 4.

    What are economists for? Lets face it, they are borderline useless. In fact they are widely guilty of creating much of the market hysteria. Journalists drool over their every word and predictions, whilst trying to grab headlines, which always err on the negative and are often inaccurate!

    We all read the papers or turn on the news and simply panic at what we are seeing. We rely on these numpty's to get it right and actually, we want to hear what the positives are, not get drowned in the downward spiral of negativity.

    As a starting point, get rid of economists, gag economic journalists that report irresposnibly and give us something positive to pore over for once.



    Blind leading the blind leading the rest of us.

  • Comment number 5.

    As one blogger once said:
    ‘ECONOMISTS’, is there any other profession where you can be wrong most of the time but still be considered an expert?

    Year 2007 – 2008 Tax receipts £549bn; Gov’t expenditure = £583bn
    Year 2008 – 2009 Tax receipts £534bn; Gov’t expenditure = £621bn
    Year 2009 – 2010 Tax receipts £508bn; Gov’t expenditure = £674bn

    Interesting trend isn’t it. Does it suggest that the recessions over?

    In May this year:
    Gov’t debt = £777bn (excl financial sector intervention)
    Gov’t debt = £1004bn (incl financial sector intervention)

    And at the moment:
    RPI all items including housing August 2010 = +4.7% p.a.
    RPI all items excluding housing August 2010 = +5.0% p.a.
    Annual wage increase (all sectors)to July 2010 = +1.5% p.a.

    I reckon, the BOE will print more money, and they’ll buy gilts with it, and they’ll do it to prevent the Government falling into a compound debt trap.

  • Comment number 6.

    How much profit can be made out of the partial state owned banks?I have heard figures of between £15-20 billion is this figure realistic? when would any profit be seen by the taxpayer? Furthermore could this be used in future budgets as a stimulus to speed economic activity up or is the amount just too small?

  • Comment number 7.

    It may not be wrong to engage upon another round of QE. It would however be strategically incorrect if it were handled in the same way as the last scheme.

    On this blog we have had long discussions on the merits and otherwise of QE. Whichever side you chose, we all experienced considerable difficulty in establishing exactly where that money had gone. We cannot repeat the same mistake again. If stimulous is to work ito the economy then it has to be fed into the economy. We cannot allow self-serving banking iterests to divert that stimulous. We need some other mechanism of direct injection.

    Yes things are different this time and the old strategies aren't working. It's time for the UK to reliase that our economic policies have to be driven by self-preservation rather than the greed of the global markets.

    As for inflation. Let's stop telling each other esoteric lies. Whatever today's preferred indicator you wish to use, the real level is far above whatever you chose. It will increase given the commodity trends and the coming rise in VAT. Where it will end nobody knows but it will have a far more significant effect than this coalition are prepared to admit.

  • Comment number 8.

    Can someone please explain how "This time is different"? I remember the same mantra in the dot bomb years: people explaining how their tech company didn't have to actually make profits so long as their stock price was rising, "This time is different" they said.

    Some specific questions:
    * How is QE money paid back?
    * How come there is, apparently, no dilution of the £ in our pockets?
    * When people mention 'spare capacity' absorbing all this made-up money what is the mechanism? What are the (unintended) consequences?

  • Comment number 9.

    When are we all going to realise that economists only fully understand economic models? They do not necessarily understand the real world.

    The same argument applies to so-called climate experts.

  • Comment number 10.

    Before they rush off to do QE2 should some of these more numerically minded economists analyse just how effective the QE1 was in stimulating the economy as distinct to helping the cash flow and capital balances of the banking sector. What will get the economy going is money in the pockets of ordinary folks whether through employment (both public and private) and/or transfer payments. Incidently it would also help reduce the deficit.

  • Comment number 11.

    More QE = More Inflation. It just cannot be otherwise. So, the policy (aka the Gov Plan B) is to burn off debt via inflation. Wot if Plan B don't work? More QE?

  • Comment number 12.

    8. At 11:25am on 01 Oct 2010, Richard wrote:
    Can someone please explain how "This time is different"?
    My answer: I can’t

    How is QE money paid back?
    My answer: It won’t be.

    How come there is, apparently, no dilution of the £ in our pockets?
    My answer: There is.

    When people mention 'spare capacity' absorbing all this made-up money what is the mechanism? What are the (unintended) consequences?
    My answer: we’re all getting poorer.

    I reckon that unless there's a significant uplift in tax receipts the BOE has no choice but to print money and buy Government debt. Because if it doesn’t the Government will fall into a compound debt trap.

  • Comment number 13.

    "it's hard to identify a single indicator suggesting inflation is about to pick up"

    That maybe true, but if we look at actual data instead of forecasts I thought it had been consistently the case that inflation has come in at stubbornly higher than forecasts expected almost every time.

    We have CPI just above 3%, RPI almost 5%, at a time of weak economic activity, how much more inflation do we want? And if expert's forecasts consistently under-estimate the scale and persistence of inflation shouldn't they, like good scientists, start to worry about the quality of their projections rather than just breezily insisting reality will fall into line with them eventually?

    I would hope the central bank would at least wait for inflation to actually start to come down significantly before they cheerily pump it up even further, rather than just claiming it will and assuming that is enough.

    The truth is inflation is very useful to them because it cuts the value of private debts, lowers real interest rates even more, and due to the stickiness of wages, cuts real wages, making the labour force more competitive. All mostly without people noticing. And QE itself props up the government's borrowing.

    They are playing a dangerous game though impovrishing us to make us more economically competitive.

  • Comment number 14.

    Someone, it may have been Ronald Reagan, once said 'Economists are people who say: it may work in practice, but does it work in theory'

  • Comment number 15.

    More QE? I'm off to buy a wheelbarrow.

  • Comment number 16.

    5. At 11:18am on 01 Oct 2010, Dempster wrote:
    ......
    Excellent summary as always. Inflating the debt away, and making us all poorer, through what is effectively a tax is, as they see it, is there only option. But it wont promote an export led recovery because everyone else is doing it as well, and there lies the rub. The real solution is to reduce or destroy debt through default or monetary reform. The latter will provide the long term solution, the former a temporary delay.

  • Comment number 17.

    The most important question is none of these things really.

    The important question is will the population on average have more or less money in their pockets next year relative to the inflation on what they buy today.

    It really is that simple.

    Posen simply reflects the concerns that people will have less money to spend therefore they will spend less thereby not soaking up the coming unemployed from the public sector and not growing enough to offset natural efficiency improvements (which means fewer jobs to do the same thing).
    Sentance on the other hand is focussing on inflation as being a problem which will reduce the number of items bought for the same amount thus having a similar effect.

    Both have points but are really trying to address the same question - how can more money be put into peoples pockets to keep them buying more stuff than they did last year and so produce growth.


  • Comment number 18.

    If we do stay out of double dip it will only be courtesy of the ONS.

  • Comment number 19.

    ‘The surest way to destroy a nation is to debauch its currency’ (V.I. Lenin)

    QE - money printing will debauch the pound and lead to more inflation. That is what some members of Bank of England MPC want. It's no coincidence that the BoE is following the US Fed policy. They are 'going for broke'.

    QE money printing is a sign of currency weakness; more printing leads to more weakness. Both UK and US central banks hope to inflate their way out of the monetary and econonic crisis by debauching the currency.

    History teaches us that money printing will lead to hyper inflation: e.g. Germany and Hungary.

    The increase in the gold price is clear sign of inflation in the system and a clear indicator and sign that the US $ dollar is weak.

    CPI inflation 3.1% is still way above the so-called 'target' set by the BoE and has been the past year! The other measure of inflation the RPI indicates even higher inflation of 4.7%.

    Money printing is a reaction to inflation within the system.



  • Comment number 20.

    11. At 11:49am on 01 Oct 2010, MegaBobinski wrote:
    More QE = More Inflation. It just cannot be otherwise. So, the policy (aka the Gov Plan B) is to burn off debt via inflation. Wot if Plan B don't work? More QE?

    .........
    Plan C more QE. They're a one trick pony.

  • Comment number 21.

    6. At 11:19am on 01 Oct 2010, STEP5150 wrote:

    How much profit can be made out of the partial state owned banks?I have heard figures of between £15-20 billion is this figure realistic? when would any profit be seen by the taxpayer? Furthermore could this be used in future budgets as a stimulus to speed economic activity up or is the amount just too small?


    This all depends on when the UKFI decide to see the shares.

    http://www.ukfi.co.uk/

  • Comment number 22.

    The reason why there will not be an answer to the problems in Ireland, UK, EU and mostly the USA is that everybody is focusing upon finance instead of the true problems of the 'real' economies.

    The finance is mere reflection of the instablities and imbalances existing within all of the Western economies. Money is not truly an issue. We have to look far beyond this smokescreen and focus upon the realities of our physical economies. Bankers, financiers and gamblers can continue to play their games but the actually produce no wealth or value themselves. They are indeed parisites. If you wish you can call my ideas Marxist (they are not - they are socialist) but we will not find any solutions without returning to our true economic resources - people, physical elements and intelectual capacity. The rest is mere self-interest from a reducing number of self iterested paties and individuals.

    1932 didn't really jsut happen overnight and this depression didn't either. Unless you want to repeat the same escape route (WW2) then we must push our 'leaders' into using common-sense rather than financial sophistry to cure our ills.

  • Comment number 23.


    #3 duvinrouge wrote:

    "Those in power will do all they can to prevent capital devaluation - their own personal fortunes are involved.

    But they can't continue this forever.

    Currencies will be debased & output will collapse."


    Excellent. You have summed up in three lines what most of us think.

  • Comment number 24.

    'A warning from history':

    Keynes on Lenin, currency, capitalism and inflation:

    "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers," who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery... Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."

    - John Maynard Keynes, 'The Economic Consequences of the Peace', 1919.

    Link:

    http://www.stockopedia.co.uk/content/money-printing-a-warning-from-history-44665/

  • Comment number 25.

    #5 Dempster wrote:

    "As one blogger once said:
    ‘ECONOMISTS’, is there any other profession where you can be wrong most of the time but still be considered an expert?"

    Yes - Politics.

  • Comment number 26.

    Thanks for the update Stephanie. I am a little confused by your statement
    "its difficulty is that it's hard to identify a single indicator suggesting inflation is about to pick up."

    One might look at commodity prices for such an indicator.According to notayesmanseconomics blog.

    "The Commodity Research Bureau spot index rose to a new high of 487.37 yesterday. This means that it has now risen some 29.8% on a year ago so we are clearly in a phase of commodity price rises. If we look at yesterday’s rise we see that the phenomenon of “agflation” was again at play. For example the fats& oils component rose by 2.6% on the day,the livestock component rose by 1.7% on the day and the foodstuffs component rose by just over 1%."

    It looks like we have commodity price rises to me.

  • Comment number 27.

    Ms Flander: to pose three serious questions to you

    a.Was Posen being too conservative and circumspect in his recent speech ?

    b.I thought on Tuesday you painted him into a somewhat extreme corner. Now your tone seems changed. Why, if you indeed have done, did you shift your ground ?

    c.Have you ever visited Hull ?

  • Comment number 28.

    13. At 12:14pm on 01 Oct 2010, Stephen W wrote:
    ....if we look at actual data instead of forecasts I thought it had been consistently the case that inflation has come in at stubbornly higher than forecasts expected almost every time.
    ...if expert's forecasts consistently under-estimate the scale and persistence of inflation shouldn't they, like good scientists, start to worry about the quality of their projections rather than just breezily insisting reality will fall into line with them eventually?
    -----------------------------------------------

    This is not science. Economists follow various fundamental faiths. Believe and eventually all will be fine.


    19. At 12:37pm on 01 Oct 2010, Maxone wrote:
    ‘The surest way to destroy a nation is to debauch its currency’ (V.I. Lenin)
    ----------------------------------------------
    The question is who is making the most effort to debauch whose currency? The recently "announced" currency wars have been simmering for some years (or even forever) so who are the main protagonists? China, US, ECB (ha ha).

  • Comment number 29.

    I honestly think we will have a 'lost decade' - how can we not since we have a massive overhang of debt (both public and private) along with most of the rest of the world. As an economy we will be doing well if we can just tread water while the value of this debt is eroded by inflation and some more QEing.

  • Comment number 30.

    If:
    money in country = balance of payments + bank loans + gov deficit, then:

    QE should have put more money into the LH term, unless it was:
    a) used to reduce bank loans
    b) used to reduce gov deficit
    c) decreased balance of payments, because it went abroad.

    There is also the matter of how any left was distributed in the country as well..

    Given that people are repaying bank loans ( LHS & RHS going down), the only way that QE will affect us is if it used Keynes style in infrastructure projects to employ and stimulate the enconomy.

    It's like the Gov borrowing a load more money on account to fund the state sector, except that they can't do this anymore. The BoE can do it however, cause it's our money used internally in the UK.

    Fat chance of this happening though, don't you think?

  • Comment number 31.

    The credit crunch delivered a tremendous blow to the World economy and has caused a non linear transition in the system. The banks stopped lending as freely as before, and are most unlikely to do so again in the medium term, if ever.

    The old rules for controlling inflation no longer apply. Raising interest rates was supposed to reduce the demand for credit. Less credit meant less purchasing power and less inflationary pressure. With credit in short supply, it would be overkill to raise interest rates even higher, and high interest rates reduce demand and hinder recovery.

    It is not surprising that those purchasing government bonds would like to receive more interest.

    Coordinated action on monetary policy between monetary authorities, similar to that which Gordon Brown negotiated for fiscal policy, is required to keep interest rates low by means of QE, while avoiding undesirable stresses in the currency markets. With such an agreement in place, governments would be able to use the newly created money to reflate their economies without the fear that increased import prices might trigger inflation.

    In the future, monetary authorities should control inflation by directly regulating the quantity and type of lending by banks and other institutions, rather than by relying on interest rates alone.


  • Comment number 32.

    There are several eminent economists who do not feature in your summary, who think that the £120 Bn spending cuts will have a dramatic deflationary impact and the prospects for unemployment, house prices and GDP are all in danger of taking the UK into a slump that leaves government borrowing going UP, not down, as it has in Eire.

    A serious slump in property prices also risks a second banking crisis which could not be solved through yet more borrowing, spending cuts and/or tax rises. This in turn will drive down our credit rating and drive up the cost of borrowing - and the probable nationalisation of banking - i.e. also what is happening in Eire.

    As we are not in the Euro, this will also precipitate a run on the pound which will be extremely inflationary because we import so much of our basic needs for energy, food and manufactured goods.

    At which point the UK will be in what I am calling the "debt liquidity trap" - i.e. where there is not a policy option available that would get us out of a spiral of rising debt and falling GDP other than by tearing up one or more of our fundamental obligations - imposing trade import restrictions, sovereign debt default, bank failures, etc.

    As Eire is a year ahead of us in the rush to austerity, surely there must be a good econometric case to contrast and compare the UK economic policy with events across the Irish Sea?

    Come on Stephanie - you've added a good pinch of salt to the IMF report - but what about the sterner critics than Mr Posen who subscribe to my analysis above?

    And what of the critics of the QE concept - sure there are those that criticise it for being inflationary, but what of those who think that given the globalisation of capital, if the BoE buys £100 Bn of gilts and bonds with "new" money it has created, this is simply dilluted to the level of a homoepathic medicine in the world's economy.

  • Comment number 33.

    Lesson 1: Back to basics: Marx on ‘money’ and capitalist ‘monetary crises’ – the ‘Credit Crunch’ - some basic economic reading for Dr Posen and the BoE MPC. Read and learn:

    ‘‘The function of money as the means of payment implies a contradiction without a terminus medius. In so far as the payments balance one another, money functions only ideally as money of account, as a measure of value. In so far as actual payments have to be made, money does not serve as a circulating medium, as a mere transient agent in the interchange of products, but as the individual incarnation of social labour, as the independent form of existence of exchange-value, as the universal commodity. This contradiction comes to a head in those phases of industrial and commercial crises which are known as monetary crises.

    ''Such a crisis occurs only where the ever-lengthening chain of payments, and an artificial system of settling them, has been fully developed. Whenever there is a general and extensive disturbance of this mechanism [the Credit Crunch and Northern Rock bank run], no matter what its cause, money becomes suddenly and immediately transformed, from its merely ideal shape of money of account, into hard cash. Profane commodities can no longer replace it. The use-value of commodities becomes valueless, and their value vanishes in the presence of its own independent form. On the eve of the crisis, the bourgeois, with the self-sufficiency that springs from intoxicating prosperity, declares money to be a vain imagination. Commodities alone are money. But now the cry is everywhere: money alone is a commodity! As the hart pants after fresh water, so pants his soul after money, the only wealth. In a crisis, the antithesis between commodities and their value-form, money, becomes heightened into an absolute contradiction. Hence, in such events, the form under which money appears is of no importance. The money famine continues [so the Fed and BoE print more!], whether payments have to be made in gold or in credit money such as bank-notes.’’

    (Karl Marx, Capital, Vol. 1)


  • Comment number 34.

    A clear indication that that we are going round in circles.

    'I described Posen's view as "subversive". In central bank circles, some of them are. This week, we had two members of the Federal Reserve's policy committee also gave speeches on the pros and cons of doing more. This stuff is hard: if the answer were obvious they would all agree.'

    OK this means putting money into the economy

    Public spending cuts means taking money out of the economy

    So which is it?
    Are you saying:
    it may be the right thing to take money out but not put any in? or
    it may be the right thing to put money in and not take any out?
    it may be the right thing to put money in and take money out?

    because it sounds to me like you are saying all three and what is worse it sounds like the economists and the politicians are saying exactly the same thing.

    Sheer madness !

  • Comment number 35.

    Where has the QE gone people cry. Looks pretty obvious to me that the QE has gone into HMGs kitty. QE appears to be a mechanism to bypass a clause in the Maastrich Treaty which was designed to stop Central Banks providing money direct to Governments, written in the days when high inflation was seen as a major problem. QE appears to simply be a dilution of money so more dilution is likely. A jobless recovery is also likely.

    QE is not the real problem, it is a short term problem. It is a price to pay along with de facto devaluation. The Irish have reluctantly concluded that they have no alternative to bunging more cash into the black hole called banks. They are just going around the loop again. It is worse for them because they are locked into the Euro.

    In answer to the current predicament those in Government, who in the main have not ever been in business it would appear, suggest manufacturing and exports are the answer. The major problem however remains the long term trend on manufacturing which is stubbornly downward however much a recent blip upwards may have occurred due to currency devaluing. This downward trend is forecast to continue. The financial sector is forecast to grow moderately. That leaves the service sector which has limits in growth and is reasonably described as likley to be static.

    Incidentally for all those left wingers who pop up and say protectionism. Tony Blair is the one who finally fully opened the gates on a lack of protectionism. His stance it would possibly seem was to go for the attractions of the financial sector - which had to have an open market - and tough for everything else.

    Consider this scenario - I am expanding a facility and on track to implement another facility in 2011/12 so please tell me - should this be put in place in the UK or placed in another EU country which has a minimum wage half that of the UK. If you cannot come up with a realistic argument as to why the UK is top of the list how do you propose to resolve the likely continued decline implicit in the current economy.

    With persistent high UK unemployment / increasing pressure downwards on UK wages the only outcome can be the dismantling of the welfare state which is highly likely in the major EU countries. Posters who ask who is demanding this dismantling just do not get it. The lack of government revenues, and not just in this country, is demanding it.

    It is highly unlikely far reaching public sector reform can be undertaken is a democracy with an increasingly dominant ageing population who demand services. Action is therefore probably going to be salami slice with every spender of public cash claiming they are absolutely indispensable for human exisitence to continue, all of which ignores the fact HMG revenues are down and could well stay that way.

    Oh yes before I go. John from Hendon - Savers - Nobody in control of policy I would suggest, gives a damn about savers because actually Nobody wants anybody to save. They want Anybody to spend. So if you are Anybody get spending and keep Nobody happy. When dealing with policy words often have too meanings.

    Regards

    Not Buzz Windrip

  • Comment number 36.

    Good afternoon Fanny,

    I see you use a picture of a bunch of fivers. Has it really got that bad?

    Bit more QE should do the trick. Allows our glorious banks to lend a bit more so businesses can grow and people can buy houses (which in turn increase their value so making their owners richer) and people can spend more which increases company profits and encourages them to recruit etc. What's not to like? The only people worse off are the selfish and idiotic savers who think they can take it with them.

  • Comment number 37.

    It’s not a case of whether QE makes sense, it’s a case of how to invest the money into the economy to maximise it’s stimulus effect, and we must not give it to the commercial banks again as we all know we can‘t trust them with our money.

    Perhaps by maintaining a healthy but prudent support for continuing to upgrade our public infrastructure, replacing old crumbling schools, hospitals, building new rail links, and expanding information technology, would be one of best ways of injecting cash into the economy, while at the same time protect some jobs; public and private, investing in the longer term recovery and providing a more efficient platform from which to reap the benefits of any upturn. Everyone benefits from better public services in the long run , even those wealthy enough not to rely upon it, because it perhaps likely that the people who made them rich will have to ride on the public transport, be treated by NHS for their ailments‘, and send their kids to the state schools, so even for the chauffeur-driven breed it’s a ‘no brainer’, that their workers should have a more efficient environment to operate in. It used to be called investment in the state but now it’s frowned upon because banking crisis as made politicians short-sighted.

    Another or alternative way to inject further investment in to the economy would be to establish a state-run bank chain, that could be controlled as a corporation like BBC. Then governments could ensure that money would be lent to SME’s, fair interest paid on savings, a limit placed on bank charges, and that bonuses would only be paid out for well-proven or established results. It would provide a benchmark like the BBC does for media, the NHS for health; (albeit with much under funding), - the state bank would be a model of prudent financial proprietary, and perhaps there would never ever again be the need to bail out another commercial bank , as the could be allowed to fail like any other business, and if we felt concerned by practices or performance of the commercial ones, we could all move our money to the state bank. The positives appear so many that it sounds like another ‘no brainer’, though no doubt the idea wouldn't be received very well in the stock markets, but we need to control them and be controlled by them.

  • Comment number 38.

    I think I need someone to tell me what I am missing here and why there is such optimism about the economy in the above report.

    So far, GO has changed little financially in this country. There have been announcements of intent, yes, and plenty of them with the accompanying rhetoric. However, there have not been the big changes. Cuts in the public sector have yet to be implemented in a significant way; [I do wonder how many they will actually find they can really send to the dole queue.] So, I suspect that the economy is still reflecting the conditions set up by Alistair Darling. It seems as if the economy is growing, but jobs are being lost in the private sector; there is a nervousness out there if you talk to people.

    Soon GO announces his plans; what happens then?

    From the above article, the economists are not expecting a recession: Stephanie Flanders wrote:
    “But there is a larger lesson here: that the most important question mark hanging over Britain's economy is not whether we suffer a double dip. The recovery will probably bounce around a lot in the next year - but none of these economists expects it seriously to go into reverse.
    In fact, they all think we're looking at a slow and painful road out of recession - because slow and painful recoveries are what countries coming out of financial crises usually get.”

    Good news then that there will be no double dip, [but I don't believe it]. These economists think/expect that the economy can bump along over the next 4 years in which public sector expenditure is massively reduced on a scale that hasn't been seen in this country for many years, if ever.
    I wonder how they think the private sector can invest while a major market sector for them is cutting back so massively? In my humble opinion, they are wrong. Yes, it will be bumpy, there will be good and bad months; but I expect it to be a downward slope. The UK doesn't have to decline very far to hit recession. If its bumpy enough, maybe there will not be the 2 quarters to meet the formal criterion, but real sustained growth, please, can someone tell me where it will come from?

    It will also be interesting to see their predictions for the deficit and how that changes. Hundreds of thousands are required by GO to loose their jobs and will set the automatic stabilisers ring, countering the spending cuts, probably increasing the deficit.

    If I am wrong and the experts [inc those in the Treasury] are correct, it doesn't matter – it just shows I don't understand. Nobody apart from me [and those who have wasted their time reading this – sorry!] will care.

    If they are wrong, on the other hand, all in the country will suffer. We then need to remember their words, hold them to account, [just as doctors are held to account in cases of negligence], and see them sent into retirement and obscurity.

    I would like to see all the experts held to account for their views and the actions that have been derived from them. If a few lost their jobs in a few years time they might, just, realise they don't truly understand how the macro-economy really works. Then they can leave us alone and probably we would be better off for it.

  • Comment number 39.

    22 foredeckdave

    You can call it socialist if you like: I call it plain common sense.

    We have to bring value back into the equation. This includes valuing people as well.

    These fiddlers can carry on scraping at their instruments but the only solution is to rebalance the economy back to value in terms of production whether that be in fields, factories or workshops. This is called earning a living. This is all that I truly know.

    To my mind this is increasingly less about ideology but more about how we will survive and sustain each other as a people.

    The more we get into this the more it becomes apparent that we have to rebuild from the bottom up as the hierarchy is increasingly declaring itself utterly irrelevant.

  • Comment number 40.


    The story of Alice in Wonderland has a lot in common with the economic judgements of the Bank of England

    and the IMF. Denial Denial Denial.. of the REAL world , is the name of the game. The reality is that the levers

    that control our destiny are in the hands of American Government....and that is REALITY.

  • Comment number 41.

    Judge people by their actions NOT their words....

    Bank of England's actions = a catastrophically slow recovery, if any, reading the tea-leaves of this weeks pronouncements.

    The Bank destroyed the economy of the UK during the last decade and it is bound to take several decades to fix.

    Any other view simply is not based on the facts.

    This is why the old guard needs sacking NOW! They are the barrier to recovery.

    We must de-leverage the debt (and rescue the banks again) otherwise this overhang of poor quality debt that quite obviously exists in the banking system (see this weeks bank of England actions) will inevitably crush any recovery.

    We have to force house prices and property prices down to genuinely affordable levels - or we can't recover. We need to head as quickly as possible to 3.5 times income in all areas of the country. Any excess price over this is a dangerous mirage and any bank or lender that loans a higher multiple in any area must already be aware of this.

    Further house prices will additionally fall because of the student loan increase - look at it like this house prices MUST go down by the amount of the increase the student loan. e.g. if student's leave with a 60K overdraft house prices must fall by 60K in the first time buyer's market and all the way up the market anything else represent the same criminally corrupt economic manager of the economy we have seen for the last decade that gave us the crash. (Yes I do blame Mervyn King for all of this!)

    Until we start fixing the poor quality debt problem we can not recover (just like the Japanese). This is not optional and we cannot wait and wait and wait till it happens as there will be no economic activity left or skills base remaining. Mervyn King and the 200 wrong economists at the bank must know this but they haven't the backbone to say so. Give us honesty at the regulator and give it to us NOW.

  • Comment number 42.

    Increasing the money supply does not cause inflation:

    There are no signs of a broadbased rise in inflation. Commodity prices are mostly increasing due to speculation - even wheat is over-priced and will probably come down somewhat. And the high CPI is mostly caused by the VAT hike in January. Either way, QE is only likely to cause asset-price inflation (not general price inflation), as inflation is not caused by an increase in the money supply, it is caused by "too much money chasing too few goods" - therefore price inflation very much depends on what the private sector and government sector actually spend their money on - not how much money there is.

    Sooner-or-later the speculators will realise that their obsession with commodities is misplaced and prices will correct themselves - though wheat and cotton will still be quite high.

  • Comment number 43.

    5. At 11:18am on 01 Oct 2010, Dempster wrote:
    As one blogger once said:
    ‘ECONOMISTS’, is there any other profession where you can be wrong most of the time but still be considered an expert?

    Racing tipsters spring to mind, The question everybody always asks about racing tipsters is 'if they know the winners why are not backing them instead of selling them as tips ?' The answer of course is risk, if the horse loses they still pocket their fee, a bit like the economists, they shrug their shoulders and say 'that's life' when everything goes t*ts up knowing their wages are safely in the bank.... good racket if you can get into it !

  • Comment number 44.

    Is there a God?

    It would seem this could be an easier question to answer?

  • Comment number 45.

    I think we all agree, sooner or later, we must build up the wealth-creating private sector. Exporting is harder than selling into the UK market. Business (rightly) goes for the low-hanging fruit. If government contracts dry up, many businesses will have to export if they are to survive. It won't be easy, and some businesses are not in a position to export. All this talk about QE or not to QE - I'm fearful it will just end up feeding the consumer economy (translate: buy stuff from China). Christmas is coming. Please! Please! - can someone find a mere £80 million for Forgemasters - which seems to be a decent business with huge export potential. That they (apparently) cannot raise this sum, seems to suggest that all the political talk about "boosting manufacturing" is purest hot air.

  • Comment number 46.

    41 JfH

    Okeydoke, tell me how much muney needed to achieve your wish.

  • Comment number 47.

    Surely QE2 is more about devaluing the currency so that the UK is more competitive in export markets (at least until our competitors also devalue).

    We have a problem with our balance of payments deficit. The real solution is for the economy to be restructured to produce goods and services that other countries actually want. This takes investment, planning, money and time. I'm not convinced I can see this process going on in the UK but, even if it was, it would take years. It is the same problem which Greece, Ireland etc have to varying degrees. We though at least have the ability to devalue our currency in the short terms and, by golly, that is what we are doing and will continue to do. That is what QE2 is all about in my view.

    I don't expect QE2 to provide the type of liquidity which many small and medium size businesses (those which can't access capital markets) require. The risk is that at least some of the increase in liquidity leaks out to foreign countries (see the net inflows of capital in some Asian and latin American countries) where the investors can make greater returns. Now, for the few who can access this liquidity, QE2 can make them very rich from investing overseas but what about the rest who will suffer from the effects of inflation resulting from a devalued currency. Is this reminiscent of a previous period in history?

  • Comment number 48.

    Re: 37.

    I LOVE the idea of a National Banking Service - NBS? - an end to rip offs, speculation, irresponsible lending, support for small businesses, fair charges - no more huge bonuses!

    The other thing that commends it to me is that both the Tories & LibDems will HATE it!

    The NHS used to be the target for libertarians wanting it privatised, but the case for keeping it is now too strong and that argument is lost - yes there are critics of the BBC, but the core principle of public service broadcasting is firmly rooted - Defence is never going to be contracted out - etc.

    The NBS could absorb National Savings, it could offer basic banking to everyone - this could be provided via post offices and online.

    Right - merge the holdings in all the banks, downscale them to what would be required to provide the NBS and fire all those expensive directors and head honchos.

    Impose an insurance scheme on all the other financial insitutions - break up anything deemed to be "to big to fail" and make it crystal clear that there will never be a penny of taxpayers' money for bailouts in the future.

    We then need to take a responsible view on the City of London and make the right investment for the country's future - in one way plane tickets for the speculators to leave and not return - they can squeeze the money for their obscene bonuses out of another country, if one will have them.

    We would then be a country free of the penicous influence of the rentier class - we could get on with making sensible decisions for our future.

  • Comment number 49.

    I agree with 37. Sand_Castles, and 38. SleepyDoremouse,

    QE as currently practiced is not an efficient stimulus. Most of it is being used to inflate commoditiy prices, or fund Mergers and Aquisitions (which cause more unemployment). The QE money needs to be passed to government to spend into the real economy pursuing Public Purpose, and creating aggregate demand.

    In my opinion, whether or not there is a double-dip next year is not as relevant as whether we will have 3 million unemployed - though if that happens it's hard to see how we could avoid a technical recession as a result. I do predict at least 3 million unemployed (about 10%) by the end of next year. The VAT hike, plus the lack of business confidense, by themselves, may be enough to cause this. Though this is offset somewhat by the increase in the tax-free allowance.

  • Comment number 50.

    39 stanilic

    The problem I would suggest is trying to persuade those holding assets gained in the bubblenomics to let go of them and to ask largely the same group to accept fewer benefits and expectations from a welfare society. In particular the problem is those parties are significant in voter swing in a democracy. Its not all going to happen voluntarily is it. End game. This is not exactly new, its in many failed cultures. many where happy when the Roman Empire fell as their solution was ever increasing taxation on the populace. Youth unemployment is 20+ percent in Spain with more not registered. What do you think it is here. Do you think more or less money currently is available to help sort a growing youth unemployment problem and do you think more money will be made available from a shrinking pot when the parties mentioned are not willingly going to be letting go of their expectations. Bonfire of the vanities.

    Regards

    Not Buzz Windrip

  • Comment number 51.

    The item not mentioned in this and many other reprts is the exchange rate. Interestingly the pound has strengthened against the dollar but recently weakened versus the Euro. If the rate vs the dollar continues to rise then this will moderate commodity inflation but hit exports. Given though that many of our exports are to Europe then this should help our competitiveness there. And as I and others have said before the Euro crisis is far from over, just delayed. Wilst Spain( and to some extent Greece and Portugal) spends Germans savings buying German goods and thus boosting German production things will seem better but when the money runs out Spain will be in an even worse position than nine months ago.

    But for the UK perhaps we should both put up interest rates a little, thus strengthening the pound a bit to moderate inflation and at the same time introduce some level of QE2 focussed on capital projects rather than repurchasing government debt. Thus stimulating jobs and production on projects ( eg road rail and energy) which should improve UK long term efficiency and capacity.

  • Comment number 52.

    Economists have drawn such contrasting conclusions about the future of the recovery this week, you'd be forgiven for giving up on the lot of them.

    The good ones can afford larger, less-flawed crystal balls.

  • Comment number 53.

    #39 stanilic,

    We are in complete agrement. It matters not one jot what philisophical desriptor is applied. Unfortunately, it appears that the sophistry will continue until even the blind see that the King has no clothes.

  • Comment number 54.

  • Comment number 55.

    'Recovery' to ... What? ... Is the question.

    Some 'elements' of the economy/population have already recovered and others may not even notice the difference.

    Economics is not just about analysing statistics and data ... it also concerns ideas and concepts.

    My idea of recovery is in regard to the 'personal prosperity or feel good factor' ... the 'PP/FG-F' which may not directly relate to traditional measurement of economic performance.

    If everything or most of what we do is measured by competition in terms of consumerism, material wealth or economic output ... then those not receiving the 'outputs' will never feel better against 'PPFGF'.

    Most of the examples of UK economic recovery are associated with 'credit bubbles/ credit expansion' if we look at the history books ... so the historic perspective is that without another credit bubble/credit expansion ... apart from those elements of the economy that have already recovered ... we are not going to see a 'traditional economic recovery' (for many, many years).

    Some bright spark ... will of course find a traditional economic recovery that was not due to a 'credit bubble/credit expansion' ... but that particular one I would say ... was not 'traditional'.

    The best we can do is work of the 'PP/FG-F' ... and the good news is ... that the 'solutions' are not only much cheaper for the UK ... but are also sustainable.

    Arguably, QE and fiscal stimulus is simply code for a another credit bubble/expansion ... which, invariably, end in a 'crash'.

    The only realistic answer is for our govt's macro economic and other policies to 'engineer' a different kind of recovery in PP/FG-F ... i.e one that is not built on consumerism and a 'credit bubble/expansion' in terms of the endless cycle of 'boom and bust'.

    The current answer is that those who 'have' ... have the PP/FG-F and the 'have nots' ... i.e. somewhere between 60-70% of the UK population ... do not now have the PP/FG-F.

    Which measure do you prefer ... GDP or PP/FG-F?

    I am amazed that so many millions and millions of people are being conned into thinking that a UK 'recovery' is underway in terms of GDP?

    Do the majority of people in the UK really and truly believe such nonsense?

  • Comment number 56.

    All these economists should take some advise:

    Even fools are thought wise when they keep silent;
    with their mouths shut, they seem intelligent.
    (Proverbs 17:28)

  • Comment number 57.

    45. At 1:57pm on 01 Oct 2010, Anselm wrote:

    I think we all agree, sooner or later, we must build up the wealth-creating private sector.
    --------------------

    Yes, but remember that in many cases, the public sector enables the private sector to produce and distribute. Roads are a simple example; poor roads, slower journeys, increased costs etc. I see public and private as two parts of the same coin. That is not an excuse for the money wasting in the public sector; certainly that needs to be cut. I just remember the 'law of unintended consequences'. Cutting always needs to be thought through both for its main objective, and also for these unintended effects.

  • Comment number 58.

    48. At 2:05pm on 01 Oct 2010, richard bunning wrote:
    Re: 37.
    I LOVE the idea of a National Banking Service - NBS? - an end to rip offs, speculation, irresponsible lending, support for small businesses, fair charges - no more huge bonuses!

    I believe we used to have one called the National Giro. Did anyone use it?

  • Comment number 59.

    #36 L from H

    What's not to like? The only people worse off are the selfish and idiotic savers who think they can take it with them.
    -----
    It's the savers that help make the lending possible :-)

  • Comment number 60.

    Re: 37, independant state bank.

    Dempster, I and others have been touting for this for a few months, along the same lines as you suggest.

    It's great to see that other folk independently come up with the same idea: harness banking for the good of the country, and become the benchmark, to force the "too large to fail" monolopy banks to alter their ways by hitting them where it hurts - in their pockets.

    The power of blogs, hey? Spread the word.

  • Comment number 61.

    Dr Posen and others talk often about the evils of unemployment, and quite right. What intrigues me is how they reconcile their undoubted worries about the evils of losing permanently economic capacity with their apparent acceptance of a situation where real wages are being severely eroded whilst corporate profits and margins are rising in real terms, particularly in the financial intermediary sector. The response appears to be : throw more money at the financial intermediary sector. The value-system seems a bit awry!It appears to me that these patrician monetary economists are exercising unwarranted control on our lives without a mandate.

  • Comment number 62.

    A banker is a fellow who lends his umbrella when the sun is shining and wants it back the minute it begins to rain.
    Mark Twain (1835-1910) U.S. humorist, writer, and lecturer.

  • Comment number 63.

    It is easier to rob by setting up a bank than by holding up a bank clerk.
    Bertolt Brecht (1898-1956) German writer.

  • Comment number 64.

    Banking establishments are more dangerous than standing armies.
    Thomas Jefferson (1743-1826) Third president of the United States.

  • Comment number 65.

    #35 Not Buzz Windrip,

    Before you actually bring on-stream your new facility perhaps you should ask yourself why you are doing it? perhaps in that analysis you may also be able to recognise the true logic of its/their location. I only ask the question as the follwing statement appears to demonstrate soem major flaws in your understanding of European poltics and culture:

    "With persistent high UK unemployment / increasing pressure downwards on UK wages the only outcome can be the dismantling of the welfare state which is highly likely in the major EU countries. Posters who ask who is demanding this dismantling just do not get it. The lack of government revenues, and not just in this country, is demanding it."

    You obviously have not been tracking unemployment rates in the EU very closely have you. As I write this, the UK still has one of the lowest % rates of unemploment in Western Europe. As for UK wages then forget the propoganda, the statistics show that wages are still increasing in the UK - especially executive pay! But it's not all abou Minimum Wage rates is it? Try looking at the associated costs of firing workers in the Europe - or even putting them on short time. You will find that that the UK has (regretably) the weakest employment legislation.

    As for the dismantaling of welfare states that may be your libaterian desire but it is not borne-out by any major activity within the EU. Perhaps you could show us your evidence?

    Now you may wish to reduce the UK and/or European workers into a parity with Chinese/Indian workers and force them ito buying services purely from the private sector but that again brings into question your strategic analysis. Who is going to buy the output when you have reduced your workforce to pennury?

    As for government revenues, we haven't yet seen the counter-argument of higher taxation being considered by our tardy politicians. Perhaps because they are too influencd by myopic financiers and ill-informed businessmen.

    You can blame Blaire all you want. He was following the call for globalisation so trumpeted by business leaders. That philosophy is now been shown for the fraud it always was. Protectionism will come into effect.

    Are you really Lee Sarason?

  • Comment number 66.

    I am suprised Stephanie has not written about the REAL battle going on here. There is a war going on in the world of economists and the economic camps ca be summarised thus:

    Mainstream (NeoLiberal / NeoClassical economics)
    These are the 'Deficit Hawks' / 'Unemployment Deniers'
    They believe that budget deficits cause bond yields to rise, inflation to increase, force interest rates to rise. They believe in the primacy of the markets and the primacy of Monetary Policy over Fiscal policy. These are the economists who cannot explain why the recession happened or why the models are all wrong.

    Deficit Doves
    They are mostly mainstream neoliberals as above, but recognise that aggregate demand is very important and spending cuts / tax increases must happen very slowly - they are just 'Neoliberal Lite'. They still believe that Monetary Policy is prime, and government deficits can cause inflation.

    Modern Monetary Theory
    These are erroneously called 'deficit deniers' though there is no evidence for this. MMT believes in the primacy of fiscal policy over monetary policy, the importance of aggregate demand and full employment, They believe that sovereign governments do not need to tax, or issue debt in order to spend. They recognise that deficits are not inflationary and have correctly predicted that bond yields would fall during the recession, and have the most complete explanation of what caused the recession - they are in the minority, but that wont last!

  • Comment number 67.

    #46. At 2:02pm on 01 Oct 2010, U14630975 wrote:

    "41 JfH

    Okeydoke, tell me how much muney needed to achieve your wish."

    fr far less than the Bank of England is getting ready to give away year after year after year.

    What a number of people seem unable to understand is that the weight of excess low quality loans inevitably leads to year after year of depression - just read the economic history books - look at the 1870 depression or indeed the 1930s.

    The cost of fixing things quickly is less that letting it drag on and on and what is more the human misery is also reduced.

  • Comment number 68.

    haha - this line made nearly fall off my chair with laughter:

    "its difficulty is that it's hard to identify a single indicator suggesting inflation is about to pick up"

    It's only "hard to identify" if you don't have a basic grasp of simple economics. Which you don't seem to have, i wish you'd please stop referring to yourself as an economist, your giving us a bad name! The moniker of "BBC's Keyensian Editor" would be a much better fit. But please, no more calling yourself an economist, your not.

    Now, back to it being "hard to identify a single indicator of inflation" - first, what is inflation? It ISN'T rising prices, it's the increase in the supply of money (you know, the thing that's being inflated?), rising prices are the SYMPTOM of inflation NOT inflation itself. So using the proper definition of inflation we can see we've already had tons, and are about to have MASSIVE amounts more - so inflation is already primed into the system. And where is it showing up?

    GOLD - (you know, money, not pieces of fiat paper) at another ALL TIME HIGH today $1317 up 31% over the past year - it's trying to tell you something if you care to listen.

    And this has all happened in the past 3 MONTHS!

    Corn: UP 54%
    Wheat: UP 63%
    Soybeans: UP 26%
    Rice: UP 31%
    Oats: UP 83%

    Yep, really hard to see any signs of symptoms of inflation here, move along, move along.

    Inflation is a tax that governments in collusion with central banks love because it hides their profligate way. QE v1 v1.1 or what "v" you wish to give it, is simply currency debasement and cheats the people out of real purchasing power, it has been used by tyrants and kings for millennia, and it's theft pure and simple - it wouldn't hurt to point that out once in while would it??

    Yours

    A.Real Economist

  • Comment number 69.

    #35 and 65
    The government needs taxes to fund its expenditure is a myth. Please may I ask anyone who believes this to read the following:

    Stephanie Bell wrote a paper entitled “Can Taxes and Bonds Finance Government Spending?”
    http://ideas.repec.org/p/wpa/wuwpma/9808008.html to down load it.

    The abstract states:
    “This paper investigates the commonly held belief that government spending is normally financed through a combination of taxes and bond sales. The argument is a technical one and requires a detailed analysis of reserve accounting at the central bank. After carefully considering the complexities of reserve accounting, it is argued that the proceeds from taxation and bond sales are technically incapable of financing government spending and that modern governments actually finance all of their spending through the direct creation of high-powered money. The analysis carries significant implications for fiscal as well as monetary policy.”

    Whilst this is US based, it applies in UK equally well.

    There is also a downloadable book by Warren Mosler:
    The Seven Deadly Innocent Frauds of Economic Policy; this can be found at
    http://www.warrenmosler.com/book
    Click on the book title to download.

    None of the statements below is correct. The frauds he is talking about are: [some are for US readers really, but #1 applies to UK just as much as the USA].
    #1: The government must raise funds through taxing or borrowing in order to spend. In other words, government spending is limited by the government’s ability to tax or borrow.
    #2: With government deficits we are leaving our debt burden to our children.
    #3: Government budget deficits take away savings.
    #4: Social Security is broken.
    #5: The trade deficit is an unsustainable imbalance that takes away jobs and output.
    #6: We need savings to provide the funds for investment.
    #7: It’s a bad thing that higher deficits today mean higher taxes tomorrow.
    The evidence shown here leads me to believe that we are all being subjected to a huge con-trick by those of a neo-liberal tendency. It might seem incredible that economics [theory and practice]could be so wrong, and surely someone would have called foul by now, but I believe that this is truly the state we are in. There are people out there who do say the economic system is being mis-handled and we are all being misled. You don't need to invoke a conspiracy theory, just incompetence.

    Given the above evidence, I am seriously asking the question 'why does the government borrow money and pay interest on it, when it doesn't need to'?
    There will need to be clear and visible controls [different from those we have now in some respects] to ensure that we don't get runaway inflation. Yes, there will be a period of adjustment and imports may well get more expensive, but we could have a much more productive economy than we do now with full employment. Why don't we do that instead of paying interest on debt?

  • Comment number 70.

    Economists have drawn such contrasting conclusions, why not give up on them?
    The IMF is too heavily America- influenced to provide objectivity. As Martin Wolf said - Theirs was more a love letter than a sober report.
    Adam Posen is all over additional Quantitive Easing (QE), with which I most strongly disagree because it will increase the tax burden on the taxpayers.
    Andrew Sentance is worried about inflation, and he should be worried because QE, bail-outs and the like hatch inflation, like a chick from an egg.
    Whose thoughts do these economists reflect? Is it pure economy, or is it economy mixed with politics on behalf of the elite?
    I was pleased to see an August draft paper entitled: Taxing financial transactions: Issues and evidence, which contradicted claims that FTTs are
    - unfeasible or
    - hard to implement.
    It was also found that securities transactions taxes (STTs) on secondary trading in equity shares, the most common form of FTT, have been and continue to be used by numerous developed and developing countries.
    The paper reported little evidence that STTs distort markets, and notes that major financial centers such as the UK, Switzerland, Hong Kong, Singapore, and South Africa all impose some form of STT.
    It adds that STTs might help to contain "herding behaviour" through “decreased short-term trading” (aka speculation, risk-taking). The report also said that “due to the large size of the base, a low-rate STT on stocks, bonds, foreign exchange and their derivatives could raise substantial revenues.”
    HERE I DISAGREE; all we need is a uniform tax on all foreign exchange transactions; I see no need to include stocks & bonds and most certainly NOT derivative bundles. You cannot know what a derivative bundle includes unless you untangle the financial mess and trace back to source. We need to stay away from all derivatives.
    A subsequent September Report, Raising revenue, showed that FTTs have successfully been implemented on a permanent or temporary basis in at least 40 countries over the last few decades, “either as a means of raising revenue or as a way of regulating markets and enhancing financial stability.” Particular positive social and wealth impacts of FTTs were found for DEVELOPING and middle-income countries, where “revenue can be raised from their own financial sectors which can make a significant contribution both to safeguarding and extending public spending on, e.g. health and education.”
    A meeting of European finance ministers in early September failed to reach agreement on EU-wide financial sector taxation, such as a moderate tax on all foreign exhcnage transactions.
    Germany, France, Austria and Belgium supported;
    Sweden, the Netherlands and the UK were less convinced.
    I remain positive that European Governments will formulate a uniform Tobin Tax, a tax on all foreign exchange transactions because I believe in justice: The taxpayer should not be carrying the burden generated by financial institutions.
    Why is there not greater uniform enthusiasm? What is going behind closed doors that continues to favour the financial institutions over the taxpayor.

  • Comment number 71.

    #66. Charles Jurcich wrote: Precis: 3 economist groups

    So where do deficit reducers who want across the board pay cuts rather than increased unemployment and a rapid return to a rational price for money come in your list!

    The problem that this group see is that credit has been expanded far more than there were available assets to purchase or than inflationary wages required. They also see that until this is reversed, and private debt is reduced economies such as the UK's cannot become competitive again. Further that the cause of the catastrophe was an idiotic regulatory attitude to asset price inflation (as was the 1930's and the 1870's).

    Getting the price of money to a rational level quickly will flush away the bad debt and poor investments that are unable to support rational monetary prices. Presently the economists in the regulators are in denial - they can't face up to the catastrophe that they created and they lack the integrity to admit it!

  • Comment number 72.

    #41 John_from_Hendon

    I'm gradually coming round to the "affordable housing" idea -- it sounds ideal -- but how would it work in practice? How do you force down the price? And how do you stop foreign investors coming in when prices are low and buying up all the available stock to speculate on the market (thus driving prices up)?

    The other thing I don't understand about it is, say you've got someone (and I'm sure there are lots of them) with a 5x or 6x salary mortgage... what happens to them? Surely driving the house prices down will mean they are in SERIOUS negative equity and will mean more defaults / bad debts for the banks?

  • Comment number 73.

    65 foredeckdave

    I don't have an opinion I have a spread sheet and a news reports. I am suggesting the data points to an inherent problem and you can only counter the facts presented with a rational argument which you have not put forward from what I can see. I don't know where the Chinese reference you make comes into it, my reference was to the EU which has common trade and movement of goods and services. I have no wish one way or the other for the welfare state to change in size, I just expect it to stay as it is on the data. Difficult thing data. Of course if you don't like it you can ignore it. As for difficulty in setting up a facility elsewhere in the EU, the difficulties do not appear to stop Terrys of Slovakia, Ford, etc etc. In Spain for example the long term contract limitations are bypassed by short term contracts hire and fire etc etc. I think you will find income levels are down in the UK but it depends which data you ignore. BTW Macedonia and Spain just to name a couple are intent on reducing barriers to setting up an operation. Perhaps instead of opening by asking me why I should have to consider another location alongside the UK you should tell me why Ford went to Turkey and Terrys went etc etc.

    Tony Blair will be judged by history, all I have noted is the fact he kicked the door down on protectionism. If you read the link to the BBC report I gave earlier you will probably conclude that protectionism would damage the financial sector which remains important.

    Regards Not Buzz Windrip

    PS How much do the BBC spend on this website to achieve this notable interface.

  • Comment number 74.

    68 tummy14
    "...first, what is inflation? It ISN'T rising prices, it's the increase in the supply of money (you know, the thing that's being inflated?), rising prices are the SYMPTOM of inflation NOT inflation itself."

    The increase in prices for wheat, corn etc was caused by the destruction of crops in Russia, Pakistan and China. This in turn was caused by the jet stream being in an unusual position for the time of year.

    I fail to see the link between 'inflation' of the money supply, and the behavious of the jet stream!

    As for other commodities, these prices are increasing due to speculation. It is true that QE has helped this by injecting money into banks and corporates, who have few places to invest at the moment due to a lack of aggregate demand in the real economy, so they are gambling with it instead (or buying government bonds, or M&A activity). These mineral commodities are forming bubbles which will burst soon enough as there is little 'real' inffluence keeping them inflated.

    Kind REgards
    Charlie

  • Comment number 75.

    69. At 3:27pm on 01 Oct 2010, SleepyDormouse wrote:
    Given the above evidence, I am seriously asking the question 'why does the government borrow money and pay interest on it, when it doesn't need to'?

    what was above was not evidence, just some assertions. I suggest that the government needs to borrow money to remove demand from the non-state sector and so leave room for its own consumption. And to pay its bills and workers.

  • Comment number 76.

    While we're talking about currencies being devalued, I'd like to ask if there IS a safe place to stick your cash right now?

    If we have more QE, I think everyone is agreed it will devalue sterling. So if you've got £100k saved up for example, what do you do with it? The interest rate won't keep pace with inflation if you stick it in a bank here. And even if it did, QE will dilute the value of the pound in your pocket.

    Stocks are volatile and there doesn't seem to be a safe haven. Property is fine as long as you believe it will retain (or increase) its value and as long as you can pay the mortgage interest and running costs with the rental income. But many people are saying there is a bubble waiting to burst in residential property and that the commercial property bubble has already burst.

    The Euro is looking in worse and worse shape every day: it will only take one of the Euro nations to default and the experiment will implode. Similarly if Germany or France decide they've had enough of bailing the PIIGS out and return to their own currency.

    The US dollar doesn't look good either: more QE forecast and a second wave of mortgage defaults on the horizon for 2011 according to some.

    The Aussie dollar? Gold? Something more exotic? I'm completely at a loss.

  • Comment number 77.

    #72. At 3:36pm on 01 Oct 2010, Bob wrote:

    "5x or 6x salary mortgage... what happens to them"

    If they were imprudent enough to borrow on these terms, and did so in the full knowledge that interest rates can go up as well as down, then if they can't afford to keep up payments they must suffer the consequences (repossession). (However the state needs to supply more housing units for these dispossessed.) Every advert for a mortgage has in bold type 'if you do not keep up your payments your home is at risk' and only the terminally stupid borrower does not understand this.

    If they can keep up the payments and are in negative equity they have a problem only when they need to move.

    If they can keep up the payments and they are not in negative equity then as all house prices will tend to fall the residual value of their property plus a new mortgage should still allow them to move.

    These are the facts of secured borrowing. This is the new housing ladder paradigm.

    Yes, it will inevitably mean more busted banks that require rescuing, but this will be probably less that half of all recent mortgagees so the sums should be manageable as they will not default at the same time.

    Now, as can already be seen, Banks and Building Societies are tightening their criteria for loans and loaning less than they used to do a while back as they expect the Government's austerity to create more unemployment and so a greater degree of default. So they are willing to lend a smaller proportion of the price of a house and are more cautions about income multiples than they were doing even a month ago and this is only going to get worse month after month and, if we do not adopt my rapid de-leveraging, year after year.

    If you have a 5 to 6 times multiple (or, heaven help you, more) mortgage then move to a cheaper house NOW while you still can! For in a few months to a few years time you will not be able to do so and your only option will be repossession and the destruction of your family unit.

    Remember also that more and more first time buyers will also have gigantic student loan debts before they come to buying a first home and this will also act to depress the market.

  • Comment number 78.

    75. At 3:46pm on 01 Oct 2010, AnotherEngineer wrote:
    what was above was not evidence, just some assertions. I suggest that the government needs to borrow money to remove demand from the non-state sector and so leave room for its own consumption. And to pay its bills and workers.


    I've said it before and I'll say it again Govt does not need to borrow or tax to spend. I'll keep on saying it until someone actuially explains how exactly this would cause inflation when there is plenty of spare capacity in the economy. Throwing the word inflation at me (because it's obvious) will not cut it. Explain !

    http://bilbo.economicoutlook.net/blog/?p=332

  • Comment number 79.

    68. At 3:22pm on 01 Oct 2010, tummy14 wrote:
    Yours

    A.Real Economist


    pmsl (again)

  • Comment number 80.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 81.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 82.

    In 2009 the Government bought around £198bn of its own gilts.

    The Bank of England (wholly owned by the UK government) purchases existing gilts via the Gilt Edge Market Makers, thereby making way for the purchase of newly issued gilts.
    And I believe it did this to avoid breaching article 104 of the Maastricht Treaty.

    The GEMM’s probably made a good ‘butty’ from it of course.
    And I reckon the gilts purchased by the BOE will never be released back on to the open market. In essence they will get deflated away to the point of disinterest.

    Now with tax receipts falling and debt going up, nothing much has really changed. If the Government continues increasing its debt, an ever increasing proportion of those dwindling tax receipts will be used to service it.

    Enter ‘quantitative easing’.

    If the Government is to remain in debt, it can’t be allowed to default.
    Because default in essence means it will no longer be functioning on a debt based system.

    So to keep the Government on a debt based system, the BOE has to make sure default does not occur. So it will buy sufficient gilts to keep the debt just about manageable.

    No ‘quantitative easing’ = Potential Government default
    And
    Government default = End of the debt based monetary system.
    And
    End of the debt based monetary system = No more interest payments (a tax on our tax).
    And
    No more interest payments = Enormous loss in revenue for financial institutions

    And that is why I think that QE is critically important. Because I reckon the absolute last thing that the financial institutions want, is the Government to default. Just about manageable debt is the likely target.

  • Comment number 83.

    #75. At 3:46pm on 01 Oct 2010, AnotherEngineer wrote:
    what was above was not evidence, just some assertions. I suggest that the government needs to borrow money to remove demand from the non-state sector and so leave room for its own consumption. And to pay its bills and workers.
    ++++++++++++++

    What I wrote may seem like assertion, but the Bell paper is a careful analysis that shows that taxes and bonds do not fund expenditure. Moslers book is written in a more populist style, true, but supports the argument.

    Other economists also provide support for the argument I have repeated. It is at the heart of modern monetary theory, which makes a good deal more sense to me than mainstream economic theory. MMT shows that government expenditure does not crowd out private sector expenditure.- Please see Prof Bill Mitchell's blog [billyblog] for his many and various thoughts on the topic.

    It is sad, but I suspect I will not persuade you to my viewpoint and we will not agree ....



  • Comment number 84.

    #76. Bob wrote:

    "The Euro is looking in worse and worse shape every day"

    I don't thing this assertion reflects the facts. The one thing the Euro has going for it, as does the Renminbi, Rupee and US Dollar is a huge, home market. This allows trade and business to carry on internal to the foreign exchanges. Indeed in all of these markets the home market is of such a size to dominate any foreign exchange needs.

    It was once the case the The British Empire and Sterling was in a similar position and we dominated the globe. We don't now, and can't every again, until we join the Euro.

  • Comment number 85.

    Re post #76, Bob...

    Bob you sound very 'lost'!!

    Bob, buy physical gold and/or silver!

    When hyperinflation takes off - you'll be very rich!









  • Comment number 86.

    76 Bob

    Property in London. Regional proportion of economy 35 percent public dependent. Financial sector forecast to have same number of staff despite IT. 1/3 of UK pop commutable distance to London.

    Regions due to be affected more adversely due to higher public sector dependency.

    Regards

    Not Buzz Windrip

  • Comment number 87.

    71 John-From_Hendon
    "So where do deficit reducers who want across the board pay cuts rather than increased unemployment and a rapid return to a rational price for money come in your list!"

    It sounds like a 'Deficit Dove' argument to me. MMT says that governments should not be targetting ANY value for currency, and that this should be determined by the government spending necessary (inflation allowing) to acheive public purpose and the market reaction to that. To target a particular value for your currency is just 'currency manipulation'. We have a 'floating' exchange rate for a reason., I submit.

    As far as the cause for the recession you seem correct to me, and I would add that the irrational level of consumer debt was the only thing keeping aggregate demand in the economy, as real wages have fallen so low. When the consumer was unable to borrow more - the bubble burst.

    The way to deleverage the private sector is for the government to boost aggregate demand through fiscal stimulus, to keep everyone earning so they can pay off their debts. A properly funded Job Guarantee is essential too. Ex nihilo fiscal stimulus only needs to be about 2%GDP more than it is currently each year to bring unemplyment down - unlike regular QE which is very inefficient and has many unintended consequences.

    Kind Regards
    Charlie

  • Comment number 88.


    76. At 3:48pm on 01 Oct 2010, Bob wrote:
    ‘While we're talking about currencies being devalued, I'd like to ask if there IS a safe place to stick your cash right now?’

    The usual suspects were:
    Gold, but it’s gone through the roof
    Index linked savings certificates, but they’ve been withdraw.
    Shares, but then as you say they’re volatile.

    If you go into other areas, such as antiques, art, classic vehicles, I think you’ll need to know your subject matter very well, to not get caught out.

    I also think that the current policy is to devalue savings, so you’ll go out and spend them.
    Which does of course make a complete nonsense of telling everyone they should be prudent and ‘save’ for retirement.

    If you look at some of the statements being made by ‘economic experts’ at the moment, you’d be forgiven for thinking that 99% of them are barking mad.

  • Comment number 89.

  • Comment number 90.

    37
    The government owned bank really is a good idea. Joe public could take his money out of the casino banks and deoposit here, that should make the banksters squeal a bit. This bank could also garuantee all depositors money to 100% as they will only be making sensible loans to sensible people and buisnesses.
    And if we are to stay with fractional reserve banking then let the new bank create its own money out thin air and lend it to the government at commercial, ie. 0,5% rates, instead of the government paying 4% to borrow its own money back.

    41
    I also agree that houses are far too expencive relevant to incomes. If we want to get house prices down and not increse intrest rates then the government just need to pass a law restricting mortgage lending to a maximum of 3,5 times income. Prices will have to come down or else no one will ever be able to move.

  • Comment number 91.

    ‘Credit crunch is over’, says Barclays

    ‘The finance director of Barclays has said to expect no more losses from toxic assets at the bank, calling an end to the credit crisis after nearly three years.’

    By Louise Armitstead and Philip Aldrick
    Published: 5:36PM BST 30 Apr 2010

    (Source: The Daily Telegraph).


    And I thought Barclays was a clean bank without ‘toxic assets’?!?

    Anyway, good news for the banks if it true?!?!

    Does that mean the Bank of England and HM Treasury can now stop propping up insolvent British banks with declared* gifts and loans of £850 billion and insuring toxic bad bank loans at RBS and Lloyds for £350 billion?

    When will the British banks pay us the British taxpayer back for the Government bank bailouts?

    *How many *secret loans have the Government/HM Treasury and Bank of England given to toxic British banks?

    Will the IMF inspect the banks’ books and Bank of England books?

    Will the IMF inspect the BoE vaults to check on the British gold reserves? How much gold is left?

    If there is any gold left in the vaults, should Britain sell it to raise a few £ billion quid to pay off the public debt?

    And the price of gold today hit an all time high of $1175 per ounce against £ sterling. (Maxone 30th April 2010)

    ....

    And today (5months later) on 1st October 2010 the price of gold hit another all time high of $ 1307.00 per ounce against the £ sterling.
    Gold price increase = continuing inflation and continuing ‘credit crunch’ and currency depreciation!

    Dr Posen and the BoE MPC, take note!



  • Comment number 92.

    76 Bob

    This is my problem to a tee. I sold my house in euroland to buy a place here, but within a week of that happening I suddenly have to go and live overseas for 2 years. Now I don't want to buy a place here to leave it stood, and especially if the price might go down 20% in that 2 years. I'm also wary about leaving all my hard earned money in the bank in case its not there when I need it. The question is what to do for the best.

  • Comment number 93.

    82 Dempster

    Default crystalises debt and passes control to the lender, it is no longer a two-way play. Lending is a matter of trust. Destroy trust and you have a credit crunch. Oh, we've had that. The result is a loss of jobs and a loss of notional asset value. Avoiding default is the number one objective for any borrower. The size of hole created by the crunch means it can't be filled quickly.

    Regards

    Not Buzz Windrip

  • Comment number 94.

    I find JfH's points in #77 much in line with my thinking. Concern about rapidly rising house prices was being expressed (well) before the crunch hit with some saying that an adjustment to house prices was required. Then of course - when some adjustment in the form of falling house prices occurs - many start getting nervous about the impact of that, and start hoping that house prices start to rise again. At the risk of stating the obvious we can't have it both ways.

    As pointed out the risks of not maintaining mortgage repayments are made abundantly clear when a loan is taken out. It is also made abundantly clear to those buying shares (in any form) that past performance is not a guide to future performance and the value of shares can go down as well as up etc etc, so where has the mindset that property prices cannot and must not ever go down come from? (For the record I have lost some value on share investments, and I live in the hope that I will live long enough for some sort of recovery to take place. Yes I am disappointed, but I am not going to try to pretend that I didn't know what I was doing.)

    Why should I feel any sympathy for those who "bought to let" (in some cases "off plan") without even carrying out basic research to establish whether or not the rental returns promised by the salesmen were realistic? Why should I feel any sympathy for those who saw their property as an "investment" rather than just somewhere to live? I know that these attitudes sucked in many who did not think like that but at the moment I really feel that those of us - the much abused savers - are being held hostage by those who jumped on to the merry - go - round without any consideration for the possible consequences. Sadly it seems that the foolish investors are being cossetted while the prudent (devalued as the word has become thanks to the efforts of a previous occupant of No 10) are being cut adrift.

    Having said all that, I suspect that much of the unwise investment in property may have been a flight from conventional pension savings, given the damage that various mis-selling episodes, GB's raid on pension schemes, and the slow disappearance of decent occupational pensions has caused. While the flight may have been understandable there is an argument that its consequences have been even worse than relying on conventional methods. A sort of financial equivalent of (to maintain the aviation analogy) CFIT; Controlled Flight into Terrain.

    At the moment there seems to be too much hoping that "something will turn up"; it probably will, but it may not be what we hoped for. Including house prices in the BoE's inflation calculations might be a good start, and easy to implement as well.

  • Comment number 95.

    74 CHARLES: I agree that the natural disasters recently have caused an ACCELERATION in food price inflation this year above the normal trend. However, they have been on a pretty constant 7% per annum increase throughout the last decade which indicates REAL economic pressures on them. A warming world means that these disasters occur as a norm rather than a freak event I'm afraid.

    I would suggest that the oil price increase of 15% per annum over the same period is the major long term cause along with the unsustainable demand caused by world population increase. Price rises have only been mitigated by efficiencies of production such as genetic modification (GM) to increase yields and ever more intensive farming and soil and water depletion. These can not continue for much longer and so with rising oil prices food prices will continue to ramp up relentlessly and at an increased rate. Speculators just put the short term bumps on the price curves but do not affect the long term gradients.

    Some excellent posts on this thread today. I think we are reaching a consensus that the UK needs to put it's efforts and talents into the real economy instead of clever "get rich quick at the expense of the majority" financial casino schemes that seem to have been the Nirvana of the brightest in society in recent times.

    We must end the ridiculous financial rewards for working in the banking and investment sectors, which should be subservient to the real economy not the other way around.

    Bring back the steady Eddie Captain Mannering type bankers I say.

    As a life-long proponent of free enterprise I can unfortunately see no alternative to a much bigger role for state control in the economy of the next few generations, aka modern day China.

    The greedy have ruined the party I'm afraid.

  • Comment number 96.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 97.

    #90. Smoginthesun wrote:

    "If we want to get house prices down and not increase interest rates then the government just need to pass a law restricting mortgage lending to a maximum of 3,5 times income"

    Funnily enough I recommended just this about a decade ago to the the HM Treasury and it was ignored - I'll look out their reply and check their reasoning - but as I recall they reasoned that only the cpi mattered!!!!

  • Comment number 98.

    91. MaxOne
    "Will the IMF inspect the banks’ books and Bank of England books?

    Will the IMF inspect the BoE vaults to check on the British gold reserves? How much gold is left?"


    Max,
    We have not had the Gold Standard since the 1970's and the collapse of Bretton Woods. Money is no longer convertible to gold or any other resource. The value of money is entirely based on whatever you can buy for it. This was done quite deliberately when it was recognised that backing money with gold only tied the hands of government's ability to pursue public purpose. Money, now, is just 'oil' to grease the flow of trade and make it more efficient, and its value is constantly in flux, and depends on economic conditions.

    As to the accounts of the BoE, they are transparent and you can access all the information on the BoE and Treasury websites.

    Kind Regards
    Charlie

  • Comment number 99.

    "Posen simply reflects the concerns that people will have less money to spend therefore they will spend less thereby not soaking up the coming unemployed from the public sector and not growing enough to offset natural efficiency improvements (which means fewer jobs to do the same thing).
    Sentance on the other hand is focussing on inflation as being a problem which will reduce the number of items bought for the same amount thus having a similar effect."

    This reflects the fact that economic policy is appealing to two distinct groups with little middle ground.

    Those with debt who are unable to get further credit and have low likelihood of imminent wage increases but who would like to purchase consumer goods, move house, decorate. Lets call this group " the young" although there are some older people in this category.

    And those with savings who, in order to acquire the savings in the first place, probably have all the consumer goods they want, are unwilling to spend money now as they see the real value of their hard earned savings decrease and anyway do not have anything they would like to spend their money on.

    The two economic views outlined above reflect different ways of getting these two groups to spend money.

    Rightly or worngly demographics and the distribution of wealth are important considerations here. Comparisons have been made with Japan's lost decade, perhaps it is not surprising that Japan has one of the longest life expectancies in the world.

  • Comment number 100.

    50 U14630975

    Of course the effects of the bubble have to be purged from the economy. Sadly, this will hurt a lot of decent people. But what this has to do with the payment of welfare other than the capability of the state to sustain it, I have no idea.

    Even in the Thirties before the so-called Welfare State there were payments to the unemployed and distressed. The difference now is that the government now receives our National Insurance contributions and spends it on anything other than welfare.

    There is no doubt that assets have to be revalued. However, this is not happening largely due to the printing of money to allow the banks to rebuild their balance sheets. More QE in the same form will only prevent the necessary asset revaluation we need to kick-start the economy. This will hurt a lot of people but the only alternative is runaway inflation which will hurt a whole lot more people.

    You remark on youth unemployment in Spain being 20% plus. I agree this is bad but we have to appreciate that youth unemployment in the UK in 2007 before the crash was 14.6%. I bet it is a whole lot higher now. I have a theory that the real economy in the UK - that is anything other than the banks, finance and government - was on the skids long before the banks crashed. I could see that just by walking around the industrial estates and the shopping centres. All the crash did was make it a whole lot worse.

    I can't help noticing that you say you have a spreadsheet. I say good on you for that, but it is this sort of rigid calculation which is part of the problem. In economies, and certainly in businesses, relationships are not rigid and often can be unstructured. Statistical modeling has its uses but it is not the be all and end all. I can recall in the late Sixties arguing with sociologists who had the view that you could render human behaviour into a set of statistical formulae. You don't hear of them now, do you?

 

Page 1 of 3

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.