The rise of the far right.

[Suff]

I do worry about that. Because we are in a hole financially and I can't see how we can get out. We owe so much money as a country, but yet the economy has to have "growth" apparently. How to we get "Growth"?

We don't, we devalue the debt by inflating it away and by borrowing less, or the same amount, during the inflationary period. At the end, we hope, we stand as we did with an economy that functions, but without the crushing debt burden.

It is then, and only then, that we can "grow" our economy meaningfully. That effort takes at least a decade and it is a lost decade at that. This is exactly what happened in the 80's and we had large North Sea Oil/Gas revenues to help.

Millband and Balls are morons. When you are already borrowing 70% of your GDP, the last thing you want to do is borrow more to try and "grow" your way out of debt. The best we can hope for is microscopic growth whilst killing the debt. Something which you can see is currently happening now with a commitment to inflation above the 2% mark for "as long as it takes". Note there is no indication of "As long as it takes to do???? what". That debt killing won't happen so long as we keep on running wars, policing war zones, paying up to the EU instead of putting two fingers up, bailing out PIIGS and also just giving it away to other countries as fast as we can borrow it.

Oh and giving it away at home too.

It is a fairly simple formula and we've done it before. All we need is cojones. Not Balls......

[Aggers]

"cojones" - that's a nice word - new to me - but I prefer balls.

It seems that all countries in the EU owe vast amounts of money.
Who the hell to?
And what would happen if we all decided we were not going to pay any back?

What a crazy world we live in.

[Suff]

"cojones" - that's a nice word - new to me - but I prefer balls.

It seems that all countries in the EU owe vast amounts of money.
Who the hell to?
And what would happen if we all decided we were not going to pay any back?

What a crazy world we live in.

It's Spanish Aggers.... It's useful when your shadow chancellor has the same name as the sentiment you are trying to get over.

Who do the countries owe money to? Well it is their bond holders. Who are they? Large banks, insurance companees and hedge funds.

Government bonds, or [url=http://forums.moneysavingexpert.com/showthread.php?t=508892]guilts[url] as they are known.

They are supposed to be low interest, fixed term and ultra secure. So you can imagine what happens when, say, Greece defaults on 75% of €1 trillion .

If all the governments defaulted on their debt there would be a whole order of collapse. Almost all major banks would collapse immediately. Almost all private pension funds would be destroyed and pensioners would be reduced to the basic state pension. Companies would fold as banks would no longer be able to lend them the money they need to buffer their payments and purchases. Large customers often demand 90 day payment but smaller suppliers often demand 30 day payment. That 60 day shortfall between purchasing materials to manufacture and receiving payment from customers is buffered by the banks.

At the same time tax receipts would fall drastically. So whilst governments would not have to pay back the debt, they would still be committed to social spending (DSS/NHS/Pensions/Infrastructure/etc...), but unable to borrow any money from anyone. Governments would have to draw back drastically on their social programmes, unemployed, long term sick and everyone else on benefits would be forced to the breadline.

In short, default is armageddon. Whilst it is one country with a relatively small GDP (Greece is about 50% larger than Scotland), the impact can be managed and specialist lenders can help them out of the mess they wind up in. However if every major country (or even 2 or 3 of the top 10), decided to default??? Massive worldwide recession, mass poverty not seen since the 1930's,

So as you see it may not work very well, but it does work. Well more that we've built a house of cards and so long as we keep tending it it won't fall over. The only thing you can guarantee, if it does fall over, is that the most vulnerable will pay the price....

Hence not paying back is not an option. 10% inflation for a decade, whilst restricting borrowing to an absolute minimum, however, IS an option. The downside? The bankers, business men and those with property wind up losing most of the wealth they have accumulated. But the population as a whole, given good government, don't suffer.

Gives you an idea of the whole mess doesn't it.....

[Aggers]

Thanks.Suff. It's a complicated business, isn't it.

The idea of bankers, etc., losing their wealth doesn't worry me. In fact it sounds very attractive.
The greedy sods deserve it.

[Workingman]

Aggers, you are not the only one who feels that way.

And if politicians lost their powers that would not be a bad thing either.