Jeremy Corbyn Vol. 2
Discussion
Luther Blissett said:
Kinda stunning that after about a decade of QE people are still under the illusion that the UK govt can run out of Sterling.
‘Run out of sterling’? Who claimed that?Total QE isn't much more than half a year of government spending, and was deliberately engineered so that it would unwound in the future. That’s hardly the same as Corbyn / McDonnel proposing to print (and spend) massive amounts of money year after year.
T6 vanman said:
To be honest the last Labour government left us a hair breath away from that scenario, for example 2010 gov spending at £640B but tax income at £460B or put another way income £3 outgoing £4, We'd have never made 2012 with Labour in power ...!
And yet some still complain about austerity as if it is just some policy to punish Labour voters. And before some 6th former pipes up about banks the spend started exceeding the tax take around 2000 and rose steadily over the next 10 years. It simply wasn't sustainable and was completely irresponsible. I wouldn't trust Labour to run a bath let alone the country. edh said:
Without the overbearing pressure of "finance", maybe UK business will be able to concentrate on innovation and productivity, not financial engineering? That's what replaces the tax take & that's what will improve people's wages.
Maybe businesses would innovate and improve productivity, but if there was no financial upside for this effort most likely they wouldn’t.What then to make sure the tax income isn’t reduced and people can’t be paid? Introduce monthly production quota targets, with bosses who fail to meet them being sent off to a Gulag?
Luther Blissett said:
Kinda stunning that after about a decade of QE people are still under the illusion that the UK govt can run out of Sterling.
QE favours most wealthy 10% in societyhttps://www.theguardian.com/business/economics-blo...
JagLover said:
Yes and I am annoyed at the Conservatives for listening to the Finance Sector on QE, mostly its effect was to shore up banking balance sheets, and meet capital requirements. Rather than being distributed to SME's for investement. It would have been more effective as a stimulus to cut VAT or make public transport free for everyone forever.
However, the economy has to be able to function without the adrenalin shots of QE, Europe is staging a small economic recovery, after shooting 1.3trillion Euros into its veins. The UK must capitalise on Europe's growth whilst we can, and sort out new markets for our knowledge and goods.
Sway said:
Gargs - is that €1.3Tn the cash created under Target2, or overt QE on top of that created under T2?
No this is the ECB spending roughly €60bn a month on buying bonds from the banks. However it is probably QE that drives the irrational behaviour of Target 2 balances between the countries Eg, Italy gets cheap money, spends it on German Engineering, So Target 2 now has German in surplus and Italy further in deficit.
Hence German is owed a very very substantial amount of money by its trading partners.
EU QE is happening every month. I have a long term view that European Economics are a scandal, I believe the Euro will ultimately fail and I think some countries will go bankrupt.
And yes I have been called a nutter for my views.
However you simply cannot magic up that amount of money every month, and then pull it. Look what the US did when they ended QE, the dollar shot up in price.
Anyone imagining sterling is recovering against the Euro is in for a shock when EU QE ends.
Gargamel said:
I believe the Euro will ultimately fail and I think some countries will go bankrupt.
On a smaller scale I'd agree with you. At the risk of going off-topic, could you flesh that out a little, particularly with reference to any effect that a Corbyn government might have?Rovinghawk said:
Gargamel said:
I believe the Euro will ultimately fail and I think some countries will go bankrupt.
On a smaller scale I'd agree with you. At the risk of going off-topic, could you flesh that out a little, particularly with reference to any effect that a Corbyn government might have?This is a long term issue, whilst the economies more together more or less, most things can be tolerated, though the outliers will be in pain (eg Greece or Spain) but at some point either an anti EU political party will win power (eg Italy) and he EU will once again be forced to replace them. Or another "black swan" event will put extreme pressure on the currency, eg Oil Crisis or US recession.
Germany is currently breaking the Economic Stability pact rules by running a long term and massive balance of trade surplus, so it is literally sucking wealth away from all of the other member states it trades with. In the long run either the EU must repatriate that wealth to the smaller / poorer nations, or the currency fails.
So either socialise the debt, or harmonise the taxation. Something has to give.
Corbyn is an old man, with 70's policies, and by the time of the next GE he will be even older, I don't think he has the energy for another campaign, which he will lose. But I don't think he will influence Europe, where all of the solutions and all of the problems start with Germany
Gargamel said:
Germany is currently breaking the Economic Stability pact rules by running a long term and massive balance of trade surplus, so it is literally sucking wealth away from all of the other member states it trades with. In the long run either the EU must repatriate that wealth to the smaller / poorer nations, or the currency fails.
I agree with everything you say - except this bit. As T2 requires no reconciliation between the constituent central banks, nor any terms for repayment, Germany isn't sucking any cash out of the poorer states - it (the Bundesbank) is paying for all the goods those nations are buying! Meanwhile, the T2 'debtor' nation central banks keep the dosh, and spunk it up the wall.
gizlaroc said:
Listening to LBC today, the topic was......
"Corbyn said 'the spy nonsense is the press getting frightened we may have a Labour government, change is coming".
.....are you frightened too?"
Listening to the callers and texters two things struck me, well three.
Firstly, many were s
tting themselves, saying if he got in they would call it a day with their businesses.
People said the same about Brexit."Corbyn said 'the spy nonsense is the press getting frightened we may have a Labour government, change is coming".
.....are you frightened too?"
Listening to the callers and texters two things struck me, well three.
Firstly, many were s
tting themselves, saying if he got in they would call it a day with their businesses.NP&E called that "Project Fear".
They'll believe this, though, because it supports the narrative they want.
Sway said:
Gargamel said:
Germany is currently breaking the Economic Stability pact rules by running a long term and massive balance of trade surplus, so it is literally sucking wealth away from all of the other member states it trades with. In the long run either the EU must repatriate that wealth to the smaller / poorer nations, or the currency fails.
I agree with everything you say - except this bit. As T2 requires no reconciliation between the constituent central banks, nor any terms for repayment, Germany isn't sucking any cash out of the poorer states - it (the Bundesbank) is paying for all the goods those nations are buying! Meanwhile, the T2 'debtor' nation central banks keep the dosh, and spunk it up the wall.
How will Italians feel when they owe Germany over a Trillion Euro's
It may look like soft power, but that is only because it suits everyone right now to ignore this. What happens when that changes.
Gargamel said:
No this is the ECB spending roughly €60bn a month on buying bonds from the banks. However it is probably QE that drives the irrational behaviour of Target 2 balances between the countries
Eg, Italy gets cheap money, spends it on German Engineering, So Target 2 now has German in surplus and Italy further in deficit.
Hence German is owed a very very substantial amount of money by its trading partners.
EU QE is happening every month. I have a long term view that European Economics are a scandal, I believe the Euro will ultimately fail and I think some countries will go bankrupt.
And yes I have been called a nutter for my views.
However you simply cannot magic up that amount of money every month, and then pull it. Look what the US did when they ended QE, the dollar shot up in price.
Anyone imagining sterling is recovering against the Euro is in for a shock when EU QE ends.
Absolutely 100% this, and that was the main reason I wanted out. Eg, Italy gets cheap money, spends it on German Engineering, So Target 2 now has German in surplus and Italy further in deficit.
Hence German is owed a very very substantial amount of money by its trading partners.
EU QE is happening every month. I have a long term view that European Economics are a scandal, I believe the Euro will ultimately fail and I think some countries will go bankrupt.
And yes I have been called a nutter for my views.
However you simply cannot magic up that amount of money every month, and then pull it. Look what the US did when they ended QE, the dollar shot up in price.
Anyone imagining sterling is recovering against the Euro is in for a shock when EU QE ends.
With Greece and Italy in a massive debt trap it is only a matter of time before it goes pop.
The EU is a massive Ponzi scheme, keep laying on more debt to these countries sees the ones at the bottom get in more and more trouble while those who are supplying the goods get richer and richer and they will eventually just go go bang.
Then you have the issue of who bails them out?
It would have had to have been Germany, UK and Netherlands, as we are the only net contributors that are not borrowing money to contribute. Sure there are other net contributors, Sweden, Bulgium and Denmark, but their input is not worth mentioning. Both Italy and France are getting more into debt to put into the EU.
So, really, it would have been Germany and the UK. Germany has done very well out of Italy and Greece getting more and more into debt, far better than the UK, but I can guarantee that we would have been bailing out Italy and Greece with just as much money as Germany when the time came.
I just can't understand why people here want to be part of that system?
It is either a total lack of understanding on what is going on or based on purely selfish reasons of "I will be better off personally" which makes you part of the problem, but I guess is human nature?
Maybe people are just looking at the EU based what has happened so far? As in "well it has been fine".
The problem is the EU is like a company losing money, it is borrowing and borrowing more but it is almost at the point where the debt is about to overtake any chance of repayment.
Or look it at another way, you get in debt, so you take out a loan, you feel better for a few months, but then you realise you are in more debt, so you take out a credit card, and feels good for a few months, but then that is racked up, but you get another card, and again you feel good until that is racked up and then you realise that your wages don't even cover you monthly debt repayments. And that is almost the point we are at with the EU, in fact we are there, the difference is the ECB can't say "Sorry, that is it, there is no more, this has failed." So they pump more and more into the system, which buys more time but is just going to make it all the worse when it does happen.
But at least we have Deutsche Bank, that rock of Europe, I guess if it does all go pop they can step in and help.
Mark Benson said:
I've no idea who you are either, but I read your incessant posting and imagine how dull a person you must be in real life. You certainly are on here.
LOL. You are imagining posters on a car forum what they are like in real life? I guess whatever gets you through the day. Makr Benson said:
Mock? You haven't the wit.
This from the angry numpty who needs to edit others posts to try to make a point? Bless. mx5nut said:
People said the same about Brexit.
NP&E called that "Project Fear".
They'll believe this, though, because it supports the narrative they want.
I guess the difference between Brexit and Corbyn was many saw WTO rules and thought, christ 8% tariffs could really hurt me. NP&E called that "Project Fear".
They'll believe this, though, because it supports the narrative they want.
Where as Corbyn has said minimum wage £21,000 a year, corporation tax up 50% over night, which if you run a business you can workout in 30 seconds "Blimey, that would put me out of business."
The Brexit thing was scare mongering because it was "this could happen" with Corbyn it is "this will happen" so we know the result.
I will be honest, with the wage policy above I would be out of business. That is a business I have been running for 20 years, not massive, only 9 employees, 5 of which are older and 4 of whom are 16-17 on £6 an hour doing it between college and Saturdays, etc.
Lets not forget that 60% of all private sector companies are SMEs, so are probably in a similar situation to me, now I am in clothing and footwear retail, so only really have experience of that sector, but everyone I speak to in my industry are s
tting themselves at the prospect of a Corbyn government, as they genuinely think it could push them out of business within the first 12 months. One of my staff was going on about how wonderful Corbyn was, I then explained that if he got in we would be in serious trouble as a company and showed her the figures, she was genuinely shocked. And I think that is the problem for many, they simply don't see the bigger picture, and when you are an employee I guess you don't.
How many Corbyn voters would still vote for him knowing their employer would go out of business and they would lose their jobs?
Because I think there are millions of them out there in this position who have no idea that they are.
Corporation tax is a funny thing.
Most companies pay tax on profits they will often never realise.
It is often sat there in stock, problem is, there is a reason that stock is sat there, no one wanted it. Therefore you end up paying the tax on the full value of stock, when you clear it you might only get 20% back on it, but you have already paid the tax on the full value.
Labour need to be very careful, when they lowered Corp tax from 30% to 19% their revenue increased quite rapidly, and is still doing so, mainly because large companies moved large parts of their operation back to the UK, they might as well have them here as we are as cheap as anywhere.
Whacking it up to 27% again has nearly every economist saying we will see revenue income drop again, yet this is where 90% of Labours policies have been costed, they are thinking they will see a jump from £58b to £82b giving them the extra £25b they need, yet the reality is most are saying we will actually see a £20b drop.
So within a couple of years we will see less being spent on NHS, Education, Forces, Welfare etc. etc.
Combine that with huge amounts of SMEs going out of business and taxes plummeting further and welfare going through the roof and you can see why many do think a Corbyn and O'Donnell is positively frightening.
Edited by gizlaroc on Thursday 22 February 10:09
Gargamel said:
I think this is exactly where the crunch will come. Will Germany at some point elect a government that wants to call in the "debt"
How will Italians feel when they owe Germany over a Trillion Euro's
It may look like soft power, but that is only because it suits everyone right now to ignore this. What happens when that changes.
I think that in either scenario, the creditors will be told to do one - especially as there isn't a mechanism to call in the debt. How will Italians feel when they owe Germany over a Trillion Euro's
It may look like soft power, but that is only because it suits everyone right now to ignore this. What happens when that changes.
Then the question will be from the electorates is how were such regulations decided and implemented.
Rovinghawk said:
Sway said:
the creditors will be told to do one - especially as there isn't a mechanism to call in the debt.
A highly likely consequence of this is that they'd get nothing more on credit- how do they cope then?The problem, is that the central banks don't have to reconcile those transactions, and actually transfer money between them. So all that happens is the money from the Italian buyer goes to the Italian Central Bank, and an IOU is logged with the German Central Bank, who actually issue the funds to the German supplier.
There is no way of preventing that - it's the fundamental principle of how the Eurozone works. Remember, no one else has ever been daft enough to create a currency union without fiscal union, and so there has never needed to be such legislation for intra-Central Bank reconciliations within a single currency. The only way of changing this is for the ECB to become a true central bank, removing pretty much all power from the national central banks.
I'm sure you can imagine how palatable that suggestion would be.
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