" The 30 per cent fall in sterling over the past year is cheerfully presented as opening up huge new export opportunities. While these opportunities seem somewhat delayed in registering in the balance of payments, its inflationary stimulus is already all too apparent. Despite the ever-present predictions of deflation, three of the four official price measurements are now on an upward path. The first signs of difficulty in raising any of the new walloping tranches of debt will not only result in long-term interest rates rising, no matter what the Bank of England gets up to in printing money, but will push sterling into yet another nosedive. Rising long-term interest rates and a collapse in sterling will place a firm grip around the government’s throat...
The government not only has a moral duty now to cut public expenditure, but may be forced to do so by its inability to borrow on the scale necessary. The price demanded for a continual and adequate supply of credit will be to begin now — and not after the next election — the Herculean task of bringing government spending nearer to what it can raise in taxes.
...
The threat to the country’s solvency is now so serious that both opposition and government need to use next week’s Budget on what needs to be done this year to begin rebuilding the country’s solvency."
As I wrote the other day
"Come on Frank, take courage and make the move. A move now could also guarantee a junior ministerial role under David Cameron and when he asks you to "think the unthinkable", unlike Tony Blair and Gordon Brown he might actually be prepared to take note of your findings. "
No comments:
Post a Comment