Double Dip now inevitable?
Discussion
World stocks tumbling, countries having debt issues, huge cuts on the way in the UK no matter who gets in, GDP growth stagnant, hung parliment on the cards, unemployment rising and forecast to jump with cuts.......
Is another recession (a so called 'double dip') now an inevitability?
Certianly, the local housing market seems to have died a death again, with viewings flat lined since March.... is this people just being cautious with the elections coming up, or do they fear the worse...?
Is another recession (a so called 'double dip') now an inevitability?
Certianly, the local housing market seems to have died a death again, with viewings flat lined since March.... is this people just being cautious with the elections coming up, or do they fear the worse...?
Its not as if it hasnt been predicted for the last couple of years.
It depends if the private sector can take up the reigns. But IMO taxes should be cut to do this not raised and offset by massive public sector cuts. It wont be a case of taking money out of the economy it will be a case of growing GDP and wealth through superior productivity and efficient business. If you are burning billions through inefficient public sector, then not burning it and putting it to good productive use cannot be seen as undermining the recovery. On the contrary continued public spending has already undermined and continues to undermine any recovery in the UK.
It depends if the private sector can take up the reigns. But IMO taxes should be cut to do this not raised and offset by massive public sector cuts. It wont be a case of taking money out of the economy it will be a case of growing GDP and wealth through superior productivity and efficient business. If you are burning billions through inefficient public sector, then not burning it and putting it to good productive use cannot be seen as undermining the recovery. On the contrary continued public spending has already undermined and continues to undermine any recovery in the UK.
Fittster said:
Silver993tt said:
First step is to retrospectively remove final salary pensions and base them soley on the individual's contributions and their growth as invested.
I would think that will prove to be a bit tricky from a legal perspective.
In a word... yes.
We are at present in a 'phoney recession' similar to the phoney war situation of the past, we have a real re-trenchment coming [analogous to Dunkirk] after the election and what will follow will be a 3-4 years of deep painful hurt.
The real culprit is for us is land and house prices, there is going to have to be a serious re-alignment of housing prices, people with mortgages that are multiples of income are going have to accept 'lifetime+' payment schemes, that go with them when they move house.
So you might have £150k on loan and that will become a lifetime+ debt, your house maybe worth now 200k but can only sell it for 125k.
By the way, mobility has been the only way out of recession without exception, throughout time economic recovery has relied on the work force moving to the place of work, the car in the 20thC has driven us out of every recession, so god knows what we are going to do with such a huge anti-car lobby around this time around.
So you move buying another place to live and you may buy that place for 125k, you carry with you the millstone of the 150k to that place, the term negative equity will have to be dropped in favour of some confection that sounds better, your lifetime+ debt might be called something like... an 'Equity Future'.
This based on the only model that will kill our debt quickly enough to satisfy our creditors, an inflationary one, we will see after the election a relaxing of the '3%' limit to inflation, all unofficially at first to 5% then finally 8%.
Within a year or two from the election people will have to either re-negotiate their loans to these lifetime+ schemes or face crippling repayments.
The more households that take the lifetime+ route, the less likelyhood there is of the rate hitting 8% or staying there for a long time.
The 3% 'corset' will be [again] a thing of the past. We've had a corset on the economy before and it had to go during the last bad recession and it will go again during this one. It went quietly and this one will go in exactly the same manner.
Any other models seem to show the cuts too fierce to contemplate.
We are at present in a 'phoney recession' similar to the phoney war situation of the past, we have a real re-trenchment coming [analogous to Dunkirk] after the election and what will follow will be a 3-4 years of deep painful hurt.
The real culprit is for us is land and house prices, there is going to have to be a serious re-alignment of housing prices, people with mortgages that are multiples of income are going have to accept 'lifetime+' payment schemes, that go with them when they move house.
So you might have £150k on loan and that will become a lifetime+ debt, your house maybe worth now 200k but can only sell it for 125k.
By the way, mobility has been the only way out of recession without exception, throughout time economic recovery has relied on the work force moving to the place of work, the car in the 20thC has driven us out of every recession, so god knows what we are going to do with such a huge anti-car lobby around this time around.
So you move buying another place to live and you may buy that place for 125k, you carry with you the millstone of the 150k to that place, the term negative equity will have to be dropped in favour of some confection that sounds better, your lifetime+ debt might be called something like... an 'Equity Future'.
This based on the only model that will kill our debt quickly enough to satisfy our creditors, an inflationary one, we will see after the election a relaxing of the '3%' limit to inflation, all unofficially at first to 5% then finally 8%.
Within a year or two from the election people will have to either re-negotiate their loans to these lifetime+ schemes or face crippling repayments.
The more households that take the lifetime+ route, the less likelyhood there is of the rate hitting 8% or staying there for a long time.
The 3% 'corset' will be [again] a thing of the past. We've had a corset on the economy before and it had to go during the last bad recession and it will go again during this one. It went quietly and this one will go in exactly the same manner.
Any other models seem to show the cuts too fierce to contemplate.
randlemarcus said:
Fittster said:
Silver993tt said:
First step is to retrospectively remove final salary pensions and base them soley on the individual's contributions and their growth as invested.
I would think that will prove to be a bit tricky from a legal perspective.ALawson said:
randlemarcus said:
Fittster said:
Silver993tt said:
First step is to retrospectively remove final salary pensions and base them soley on the individual's contributions and their growth as invested.
I would think that will prove to be a bit tricky from a legal perspective.I have raged previously about the cushy system set-up by the post war generation which means they have a luxury welfare state that future generations will have to pay for.
Political Pain said:
In a word... yes....
Said Horace Batchelor (department 10, Keynsham - K-E-Y-N-S-H-A-M- - Bristol). 
I actually agree with a lot of what you said, but who are you?!
ETA link: http://en.wikipedia.org/wiki/Horace_Batchelor
Edited by Digga on Wednesday 28th April 10:07
We only came out of recession because the BoE printed 200 billion quid, and effectively gave it to the state to spend, and the government borrowed a similar amount from the bond markets. This money is all included in the GDP figures.
The "recovery" is a myth, it's not real growth, it's the spending of debt and devaluation money by the state.
It's just one big dip.
The "recovery" is a myth, it's not real growth, it's the spending of debt and devaluation money by the state.
It's just one big dip.
It's as good as certain imo.
There's been feck all recovery to speak of so far, 0.1% of what is really nothing more than artificial growth brought us out of recession after a couple of hundred billion quid spent in quantitive easing, low interest rates and various poxy schemes. Convenient being as there's an election looming.
Couple that with the massive burdon we've got with the public sector, and the fact it needs some absolutely monumental cuts, factor in inflation and... well we're f*cked, to put it simply.
There's been feck all recovery to speak of so far, 0.1% of what is really nothing more than artificial growth brought us out of recession after a couple of hundred billion quid spent in quantitive easing, low interest rates and various poxy schemes. Convenient being as there's an election looming.
Couple that with the massive burdon we've got with the public sector, and the fact it needs some absolutely monumental cuts, factor in inflation and... well we're f*cked, to put it simply.
Fittster said:
Silver993tt said:
First step is to retrospectively remove final salary pensions and base them soley on the individual's contributions and their growth as invested.
I would think that will prove to be a bit tricky from a legal perspective.If you're under the age of 45/50 and in the public sector, you have the following choice
- accept reality now, keep your job and have a pansion comparable with the private sector
- refuse the above, and end up with f
k all, because the nation will be unable to honour it's contractanonymous said:
[redacted]
The obligation to final salary pensions are a matter of Employment law, effectively deferred pay. However, European law is unclear on the exact terms and yes, they are open to challenge in the European Court. Expect a big bunfight in the coming years...As to Castrol Craig suggesting Cable as next Chancellor in a Con/Lib coalition, my view is he'd be a long term disaster. For example, have you seen the LibDem manifesto regarding private pensions!? They are suggesting extending the double-taxation introduced by Darling last year on the pension contributions made by "the super rich" (i.e. anybody earning over £150,000pa) to fatcats earning more than £45,000pa by restricting tax relief on pension contributions.
Now call me old fashioned, but I had always been led to believe that funding a nest egg for your old age was a socially responsible thing to do. But no, it seems people earning a reasonably modest salary will be double-taxed for the crime of deferring their income today so that they don't have to rely on the State in retirement. IMO the changes already introduced last year by Darling made a worrying and fundamental change to our pension system. Whatever we might personally think about high-earners and whether or not their earnings are justified is not really relevant; we now have a system that says it is OK for some people to be potentially taxed twice on their earnings because they have chosen to save.
You may think “So what, it doesn’t affect me, why should I care about higher rate tax payers?” However, if you think about it, a door that was previously kept tight shut for years was pushed ajar by the Badger last year, and now Cable is intending to boot it open. If you think back, another door - the reduction in the level of dividend tax credits, thus effectively taxing pension funds - was opened just a tiny crack too by Norman Lamont in the last Conservative government. That wasn’t too worrying at the time, but that door was kicked wide open in 1997 when Winky decided to end ALL divident tax credits and have his "£5bn pa tax grab" to such devastating long term effect on our pension schemes. If the proposal goes ahead then I would suggest it is the final nail in the coffin of what was not so long ago was the most successful retrement savings movement in the world.
Time to be worried, people.
pilchardthecat said:
We only came out of recession because the BoE printed 200 billion quid, and effectively gave it to the state to spend, and the government borrowed a similar amount from the bond markets. This money is all included in the GDP figures.
The "recovery" is a myth, it's not real growth, it's the spending of debt and devaluation money by the state.
It's just one big dip.
The Mugabe way of doing things.The "recovery" is a myth, it's not real growth, it's the spending of debt and devaluation money by the state.
It's just one big dip.
Eagerly awaiting a one billion pound note
NoNeed said:
pilchardthecat said:
We only came out of recession because the BoE printed 200 billion quid, and effectively gave it to the state to spend, and the government borrowed a similar amount from the bond markets. This money is all included in the GDP figures.
The "recovery" is a myth, it's not real growth, it's the spending of debt and devaluation money by the state.
It's just one big dip.
The Mugabe way of doing things.The "recovery" is a myth, it's not real growth, it's the spending of debt and devaluation money by the state.
It's just one big dip.
Eagerly awaiting a one billion pound note
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