MSE News: Britain 'at risk of new recession'

melcmgr

I think this is excellent news.

Why everyone thinks we constantly have to strive for economic growth is beyond me. We have overstretched ourselves as it is, so a bit of decline followed by stability and zero growth would be rather a pleasant place to be.

worldtraveller

October factory orders suffer biggest drop in a year - CBI

I wonder if Martin Weale had an early look at these figures?

Pincher

The banks are just going to horde the money as capital reserves and not lend it out again.

I'm still trying to work out why quantitative easing is OK, but direct state aid is anti-competitive, and then European subsidies are alright.
Anyway, if the EU allows, I want to spend the £75 billion pounds on building a future town in Cornwall.

Using the Eden project as a guide, we build giant domes above open cast pits. Alternatively, we build a canopy like Wembley stadium. We build from the bowl rim inwards, so little blasting is required. Corridors and balconies face inwards. Plenty of space for shops, restaurants, offices and apartments. The centre court yard could be used for fetes, market, concert, etc. I would go a Flinstone look overall.

We build more domes as needed, linked together by a network of highrise mono-rails. Some pits can be converted into solar farms, so they don't blot the landscape.

This will make sure we are spending the money in the UK, providing orders, employment, GDP, and accomodation.

Thrugelmir

Pincher wrote: »

The banks are just going to horde the money as capital reserves and not lend it out again.

Horde what money ?

Thrugelmir

melcmgr wrote: »

Why everyone thinks we constantly have to strive for economic growth is beyond me. We have overstretched ourselves as it is, so a bit of decline followed by stability and zero growth would be rather a pleasant place to be.

As growth induces inflation which wipes away debt.

Maybe the world is on the cusp of change and a new direction.

Debt is going to have to be faced up to.

Pincher

Thrugelmir wrote: »

Horde what money ?

"He was speaking as Bank of England governor Mervyn King prepares to appear before the Treasury Committee today to answer questions on quantitative easing (QE).

Earlier this month, the bank injected a further £75 billion into the economy in a bid to jump-start the UK's flagging recovery."

My understanding is, the previous QE (Bank of England buy Gilts from banks using funny money, so the banks have billions in cash) ended up sitting in the banks' coffers, partly because the government demands that they hold more cash reserves so they won't go bankrupt so easily.

Debt is a funny business, if you owe £500 on phone bills, you will get hounded to death, but if you owe big enough, like the Greek government, they bail you out.

What lessons can we learn from Victorian literature? If you get into trouble, Mr. d'Arcy will bail you out, because he is incredibly wealthy. I have always objected to this solution. Surely the correct solution is for Mr. d'Arcy to challenge Mr. Wickham to a duel, who either dies or runs away.

tagq2

Debt is a funny business, if you owe £500 on phone bills, you will get hounded to death, but if you owe big enough, like the Greek government, they bail you out.

Getty's assertion stands, though I like to think of it as a special case of, "Fool me twice, shame on me."

Consumerist

torbrex wrote: »

The rates need to be put back to a level that will force people to pay back their debt rather than ignore it, if this means difficulties for some, too bad, they should have been more selective with their borrowing.

Or there's the Greek solution - force the banks to cut all consumer debt by 50% so there is more money around for people to spend to create jobs. If this means difficulties for some banks, too bad, they should have been more selective with their lending.

Pincher

Seize their assets.

Foreclose the Parthenon. Hire it out for weddings, business conferences. Build a Greek theme park around it.

Take over beaches. License Virgin, Thomson, Inghams etc. to run the resorts. We still hire locals, but the holiday reps will now be colonial governors.

Milk the assets until the debt is paid.

Thrugelmir

Pincher wrote: »

(Bank of England buy Gilts from banks using funny money, so the banks have billions in cash)

Purchases of gilts were made from pension funds and insurance companies not banks. So effect was to put liquidity into the banking/financial system.