Britain's Trillion Pound Horror Story

StevieJ

suburbanwifey wrote: »

The people who I saw in the you tube video promoted in an earlier response, were in fact very old people...I agree, those conditions are not fit for humans,

The main one had an 8yo child and earned less than £2.50 an hour.

nearlynew

Cleaver wrote: »

People being interviewed are basically saying that inflation equals theft. I genuinely hope nearlynew is watching somewhere and thoroughly enjoying himself.

How do you know one of those people wasn't me?

StevieJ

I liked this comment from another article.

It is the opposite of fact free, it is full of facts.
However, like that Morecambe and Wise sketch it has all the right facts but in the wrong order.

It was also had the odd fact that was not fact, one of the Dodo's said that you couldn't export services, I think he quoted something like a the efforts of a shoeshine boy. He obviously wasn't aware that services (or invisibles as they are known) have made a major contribution to the UK Balance of Payments over the years.

P__G

Is anybody going to change their habits and start buying British again then? I certainly will do so. I am genuinely worried about the UK economy and I think it is wrong to import so many things we make right here for both environmental and economic reason. I saw New Zealand apples in Asda today ~ from now on, locall green grocers and I am buying fruit and veg IN SEASON

Loughton_Monkey

StevieJ wrote: »

It was also had the odd fact that was not fact, one of the Dodo's said that you couldn't export services, I think he quoted something like a the efforts of a shoeshine boy. He obviously wasn't aware that services (or invisibles as they are known) have made a major contribution to the UK Balance of Payments over the years.

If you watch again, I think he said "most" service industries. He was quoting the shoeshine boy as an example. But he's bang-on correct. Of course some services bring in money (Banking, Insurance, Education & Training) but this is dwarfed by the so-called GDP of all the Restaurants, Domestic Banking/Insurance, Building.....

This is why (as I have said many times) Balance of Payments is the key measure, and not GDP. BofP is hugely negative, and has been for about 15 years which means we are much poorer. GDP measures only the degree we 'swish the money around' the system - over half of which is spent by Government. Open up a huge new laundry chain if you like. You will become a millionnaire, employ about 5000 people. Nothing whatsoever wrong with that. But it does not create a single penny of extra wealth within the UK.

Loughton_Monkey

P__G wrote: »

Is anybody going to change their habits and start buying British again then? I certainly will do so. I am genuinely worried about the UK economy and I think it is wrong to import so many things we make right here for both environmental and economic reason. I saw New Zealand apples in Asda today ~ from now on, locall green grocers and I am buying fruit and veg IN SEASON

Sounds a bit corny, but basically that's what we must do as a nation. Currently, however, we don't really make much any more to buy.

But if 'Dave' has his head screwed on, he should be trying to create a 'hit list' of what we import that (a) could be relatively easily produced here by 'new start' businesses, (b) competitively. Then give encouragement by lowering taxes [if that's legal with our European 'friends'].

StevieJ

Loughton_Monkey wrote: »

If you watch again, I think he said "most" service industries. He was quoting the shoeshine boy as an example. But he's bang-on correct. Of course some services bring in money (Banking, Insurance, Education & Training) but this is dwarfed by the so-called GDP of all the Restaurants, Domestic Banking/Insurance, Building.....

This is why (as I have said many times) Balance of Payments is the key measure, and not GDP. BofP is hugely negative, and has been for about 15 years which means we are much poorer. GDP measures only the degree we 'swish the money around' the system - over half of which is spent by Government. Open up a huge new laundry chain if you like. You will become a millionnaire, employ about 5000 people. Nothing whatsoever wrong with that. But it does not create a single penny of extra wealth within the UK.

OK what about, say, Kentucky fried chicken? service industry within the US, then over time they are selling Franchises all over the world. So what if your laundry chain has a USP, this can be franchised and exported.

StevieJ

Loughton_Monkey wrote: »

....

This is why (as I have said many times) Balance of Payments is the key measure, and not GDP. BofP is hugely negative, and has been for about 15 years which means we are much poorer. GDP measures only the degree we 'swish the money around' the system - over half of which is spent by Government. Open up a huge new laundry chain if you like. You will become a millionnaire, employ about 5000 people. Nothing whatsoever wrong with that. But it does not create a single penny of extra wealth within the UK.

Things are are not always as they seem.

Conclusions
The UK current account deficit in 2005 was, at £31.9b., around 2½ % of GDP, half a percentage point above the average deficit of the last twenty years. This means that foreign residents have added £31.9b. more to their pile of UK assets than UK residents added to their pile of foreign assets. These piles of assets are now huge (around four times UK GDP) and the sums added to them each year 18 are also enormous (around 60% of UK GDP). Furthermore, relative to the height of the piles, the difference in their size is tiny.

A significant feature of these piles of assets is that the pile of foreign assets held by UK residents is weighted much more towards equity type assets (direct investment and equity securities) than the UK assets held by foreign residents.
Historically, equity type assets have had higher average returns than debt type assets. This has led to two outcomes favourable to the UK.
First, the income generated by the foreign assets owned by UK residents exceeds that generatedby UK assets owned by foreign residents by over 2% of GDP in recent years.
Second, despite the continuing current account deficit of around 2% of GDP for the last twenty years, the difference between UK assets and UK liabilities remains only modestly negative compared to the size of each of the stocks.Furthermore, if the stocks are adjusted to market value, UK assets continue to exceed UK liabilities.

http://www.nuffield.ox.ac.uk/users/nickell/papers/TheUKCurrentAccountDeficitandAllThat.pdf

Cleaver

nearlynew wrote: »

How do you know one of those people wasn't me?

Because they all then went on to expand on the point and explain what they meant by it.

Loughton_Monkey

StevieJ wrote: »

Things are are not always as they seem.

http://www.nuffield.ox.ac.uk/users/nickell/papers/TheUKCurrentAccountDeficitandAllThat.pdf

This is a faily amateur, academic paper, drawn up early 2006. Although it mentions Balance of Payments, it dwells on "Current Account Balance". It notes the massively increasing negative BOP, but to offset that he notes an increase in 'Net Income Flow' from foreign investments.

The argument, as far as I can see, is very much if this were to continue to rise, then we might get through. But given that it was written 5 years ago, prior to the huge turmoil, I think there's very little to learn.