Is Britain f***ed?

[Lord Beria3]

http://www.tullettprebon.com/Documents/ ... rt_007.pdf

Interesting report into Britain's debt crisis and how screwed we really are.

A big part of the report is how much the government depends on future growth to save us... as this is rather unlikely, it is likely that monetisation and further cuts on a much bigger scale are inevitable leading to a much higher inflation rate down the road.

[biffvernon]

It's a useful report insofar as it points out where both Labour and Conservatives have got things wrong. Of course their prescription is also bonkers. They think that we can actually get back to growth by freeing up SMEs of regulations and having a 'liberty agenda'. Maybe, but with no mention of 'peak oil' in the report this has to be another one for the recycle bin.

[ceti331]

it seems like we'd be screwed under BAU conditions, let alone with peak oil.

how the F--k did we end up here.

[snow hope]

That report may have lots of figures and assertions, and the outlook may indeed be bleak, but it is to politically biased for me to rely upon. Too much politics in any report calls it into question in my opinion.

[Lord Beria3]

it seems like we'd be screwed under BAU conditions, let alone with peak oil.

how the **** did we end up here.

+1

Actually think that their liberty agenda makes a lot of sense. There is so much red tape now when it comes to setting up a business - and ultimately this is where real wealth comes from.

However, as others have said, with PO, the future of growth is going to be scarce itself, and ultimately we have no chance of getting on top of our debt nightmare without a energy miracle within a decade or two like cold fusion.

Even than its going to be bloody hard work and painful.

[postie]

I think this is what brought me back to peak oil websites and hence here, after a hiatus, since i looked into it in 2003/4.

The talk last year coming out of the new Govt seemed to me to be saying we really need to get on top of our spending for more reasons than they were letting on.
I don't agree with the cuts they're implementing, but knowing what we do about PO, then it makes sense to try and clear the board and go into this without debt.

Growth can't be gained. But being in debt... hmmm, it'd cost us more to buy stuff... loans, oil, whatever.

I seriously think those in power know it's coming and are trying their utmost to clear the decks. I also think they don't know when it'll hit exactly. They laying out the next, to them, 30 years... of normality... without considering the full impact of PO, cos it is simply inconceivable that it wont run as normal. So to go into it, debt free has to be better.

I can't say this how I want to. I don't have the words.

[ceti331]

So to go into it, debt free has to be better.

i've heard people retort with really long complicated explanations as soon as I mention peak oil .. "you're oversimplifying"... but this is really frustrating. it's a no brainer. the economy is about using resources, there's a lot of detail as to who benefits in what order etc.. but overall living within ones means in resources should have been really easy to express through the economic system, as "less debt", surely.
it should have been obvious that those rising house prices didn't correspond to new resources coming on line.

[biffvernon]

it is to politically biased for me to rely upon.

Agreed. There's even a cheap swipe at speed cameras. Such things make the report sound like a personal rant.

[Lord Beria3]

http://www.telegraph.co.uk/finance/comm ... ities.html

the main reason the UK remains triple-A status is that we’re “printing money” and using it to roll over our debts, the Bank of England creating new credits ex nihilo, then buying gilts from existing investors.

What Britain also has going for it, of course, is that the Coalition has forged a “credible” deficit-reduction plan. What “credible” means in today’s wacky world of Western government finance is that the UK’s plan is more realistic than total fantasy. The question is, how much more?

Messrs Cameron and Osborne deserve praise for putting “austerity” centre stage. The fact that they’ve done so, and the Liberal Democrats have backed them, has bought Britain some temporary respite from reality. Well, that and QE. But ministers still talk of “paying-off the deficit” within five years as if that will solve our problems. It won’t. Because, at the risk of insulting some readers’ intelligence, you don’t “pay-off” a deficit.

A “deficit” means that, in a particular year, the government spends more than the economy generates in revenue.

The resulting annual shortfall must then be borrowed, the related debt slice added to the overall national debt, so increasing the total that must be serviced by interest payments until maturity. On maturity, of course, the debt relating to yesteryear’s deficit is repaid – often, by issuing more debt. And so we go on. Until the Ponzi scheme folds.

Great summary of Britains situation...

[extractorfan]

So to go into it, debt free has to be better.

i've heard people retort with really long complicated explanations as soon as I mention peak oil .. "you're oversimplifying"...

Yeah, and it is really simple.

Perhapse people find the idea that a problem of such megnitude can't possibly have a simple explanation.

[clv101]

Too much politics in any report calls it into question in my opinion.

Absolutely. I've been reading these Tullett Prebon for a while now. The political bias totally masks what is a reasonable (albeit it unoriginal) analysis.

[kenneal - lagger]

how the **** did we end up here.

We believed the economists who told us that continuous economic growth in a finite environment was not only possible but desirable. From that flowed the banking system.

We believed the ratings agencies that told us that CDOs were AAA rated and now we believe them when they tell us that some countries can't pay their bills. That latter statement is more believable.

Basically we believe what we want to hear. That's how we ended up here.

[energy-village]

I've just read this grim but interesting article and comments. Worth reading the whole thing, not long.

How Long Until People Raise The Alarm About Britain?

... Britain lost 20% of GDP from 2007 - 2011 ...

Gauged by decline in GDP, using a common international purchasing measure, dollars, no other economy in the world has shrunk even remotely as much as the UK ...

Table 1 shows that the fall in UK GDP in 2007-2010 was $562 billion compared to the next worst performing national economy, Italy, with a decline of $65 billion – i.e. the decline in UK GDP in the common measuring yardstick of dollars was more than 8 times that of the next worst performing national economy. Table 1 shows the 10 national economies suffering the greatest declines in dollar GDP. It is also extremely striking that the UK’s decline was more than two and a half times that of the entire Eurozone. The UK accounted for a somewhat astonishing 77% of the EU's decline.

http://www.blogger.com/comment.g?blogID ... 6159965236

Not quite the story as reported by the BBC, though Robert Peston has suggested that the UK is the most indebted country in the world (per capita, adding the 4 main types of debt).
http://www.bbc.co.uk/news/business-15820601

Can anyone think of any plausible ending to this economic crisis in Britain other than economic collapse?

[emordnilap]

Peston seems to join most of the dots...but then can't resist the cliché 'generate sustainable growth'.

Will he still be using this cliché when the underlying problem of resource depletion comes and boots him in the groin as well as the face?

[SleeperService]

energy village the original article is here

http://theautomaticearth.blogspot.com/

your link is to the comments.

It's very scary reading but actually makes sense, to me at least. The only thing that's different is that we can print GBP. Eurozone don't let themselves print Euros?

Edit: Looks like The Daily Mash is on top of things. As it's true I don't find it as funny as I thought I would

http://www.thedailymash.co.uk/news/busi ... 201174775/

Trouble is I don't think the PTB will alter strategy until it's all fallen apart around us. If they try we'll probabily fall foul of the European court or the IMF depending on which puppet the PTB use.