8 January 2011

They've stopped printing money so get your wallet out...............

Kutter Ken and Ko are implenting Osborne's demands for budget cuts. They don't actually care about Somerset, Somerset's residents, Somerset's voters or Somerset's taxpayers. KKK are just a small part of the current government's efforts to replenish government coffers, mainly because, having bailed out the banks, the government needs to 'balance the books' and there's no cash left in the kitty. As the UK has no significant manufacturing (thank you Maggie Thatcher), nothing that anyone else wants to buy from us and given the fact that the City of London is just about the only 'wealth creator' left in the UK and therefore can't be touched (see comments about banker's bonuses), the only way to balance the books is by cutting expenditure and raising taxation - and the hell with the consequences for you and me.

So, you'll see in your Council Tax bill that, whilst services arebeing slashed, the Council Tax bill will stay the same. At the same time, town and parish councils are being urged to raise their Precept demands (paid for by you and me) to try and make-up for cuts in services and, at the same time, VAT is going up to 20%.

So, national government is going to drain out of the economy just as much as it put in to bail-out the banks and the money is going to come not from the banks (they need to pay huge bonuses to stop the staff from going to Bejing or Shanghai) but from you and me.

I've long suspected that Maggie Thatcher's drive to turn the UK into a service economy (ie hairdressing and interior desgn) was driven more by a hatred of unions than by any clearly thought through plan. Today, that project is starting to look like a pretty poor call as China really starts to gain the momentum that we provided by exporting all of our manufacturing. It was a great idea as long as the Chinese workforce were willing to accept a bowl of rice in return for a week's work.

But those days are rapidly coming to a close and the cost of manufacturing in China is set to rise as that nation develops aspirations. As the cost of production in China rises, and as we have less and less to sell to them (if we ever had), the more likely the possibility that we won't be able to buy the goods that we need.

The recent story about industrial espionage involving Renault makes for interesting reading and, if the story turns out to be true and if the people who stole the information and sold it to the Chinese turn out to be French, I hope the French lock them up and throw away the key. Why such strong views? Simple. Maggie Thatcher pretty much did the same thing by getting rid of our manufacturing base thus making us hugely vulnerable to being marginalised by emerging countries. The people who stole/sold Renault's secrets have, effectively, done exactly the same and the fall-out will effect the wider French economy and the French people.

Throwing away the key would be letting them off too lightly.

If you want to view a catoon explanation of what the FED did in 2008 to bail-out the US economy, try this link that a friend sent:

Till next time, don't let Ken and his chums tell you that they give a damn. They don't, and the libraries are only the start.

Till next time, I'm Niall Connolly