The chart below is going to change your life beyond all recognition. Please click on it to enlarge.
Does everyone in Scotland need their heads banged together? Wake up!
That chart tells you that while the world is trying to climb out of recession the US is going to bring it all down again. All that debt in the system means a collapse of credit i.e. the modern Western style economy. Brown's and Obama's answer is to borrow more but debt is the reason that the credit markets have seized up. Without credit the private sector is collapsing.
Eventually Brown and Obama won't be able to borrow anything. Why? Look at the chart. Every year the US government collects $2 trillion in taxes - how on earth are they even going to be able to pay even the interest on that debt? On top of all that the US has $100 trillion in unfunded obligations (baby boomers retiring) which is being kept off the balance sheet! What are they going to do to solve this problem? PRINT MONEY. So, while the economy is crushed under the weight of debt they are going to pay that debt back by decreasing the value of the currency. The pound has lost 30% of its value over the last year and a half because of this policy.
Brown is already printing money because he can't borrow enough - tax from individuals and companies are nose-diving. In the US income tax take is down over 20% and corporation tax down almost 60%. Britain is in a similar position. So a massive reduction in income will cause Brown to print even more money. Watch while all your assets get devalued and inflation hits.
Then to stop the inflation going mad they'll have to put up interest rates. Look at the chart above again. How can a government afford to pay say 10% interest on debts on that scale? Half the tax take or more will go on interest payments alone. Government services are going to be halved and taxes are going to go through the roof. Higher education is going to collapse and there'll be no entry level jobs for the young who will want to emigrate. The tsunami is coming folks and the longer they put off the inevitable the worse it is going to be. And because Brits have no savings who's lending money to the government? Foreign investors and countries. Are they going to be happy that you are repaying debt with devalued currency? No. Are they going to continue lending on this basis? No.
Scotland must leave the union. We simply have to use our oil revenues to rebuild our manufacturing base. Pumping money into banks meant taxing individuals and industry and that has caused British products to become too expensive and so production has gone overseas. Manufacturing only accounts for around 13% of the UK's economy. If we don't make things for ourselves we have to buy them from abroad and if we don't make things we can't sell abroad. So, how are we supposed to pay debts when we run huge deficits in the balance of trade with other nations?
Trying to be a player on the world stage is running Britain into the ground. A government simply must balance its budget. It must only spend what it has. Government debts on the scale of the US and Britain are profoundly dangerous economically and politically. Britain must be scrapped now. Let England find itself without the imperial cloak of Britania and let Scotland use its oil wealth to shape our nation for a future that is both sustainable and Scottish. Trident has to go and the troops must be brought home. Stop trying to screw people over geo-politically!
The chart above represents the key political debate we should be having. However, because of vested interest and political chicanery this debate is not taking place. It is now pivotal that people take measures to protect their wealth. Do not believe governments or banks - that could be a fatal mistake!
Below is another chart. At some point economics got into the hands of financiers and this is what's happened. When the collapse comes there will be a debate. Financiers must not be allowed near government. Right now Goldman Sachs, JP Morgan, Citi and others have taken over the Whitehouse. Obama was picked by them and he is their man. He'll talk about slapping down bankers but when he gets to the meeting he does what he's told. The merger of government and industry is called fascism. Our economy is fascist economics now. Who would have believed that so many banks would become nationalised? It didn't happen even during the war. In the US the government runs the insurance industry, banks, car companies, the mortgage sector and so on. Is this capitalism? When bankers blow it all they get underwritten by the taxpayer? It's insane. The debate will have to happen. We must keep the government out of the economy especially with regard to monetary policy. When they play with the money supply they become easy to manipulate - something the big money men have always been good at.
Everyone must try to raise these questions now. We must have this debate. By sticking our heads in the sand we are allowing our leaders to make the world a more dangerous and unstable place. We must practice democracy and demand answers. When the crash comes there is serious political and civil consequencies. I smell the police state is already half here. How far will they go to stop the people demanding justice? Will they distract us with more wars?
It's time to get Orwell's 1984 off the shelf and give it another once over!
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7 comments:
How much of the UK debt would Scotland need to inherit in the scenario of independence? What would be the Scottish future liabilities in terms of pensions, PFI contracts, welfare benefits, etc.?
Exactly the same amount of the debt and liabilities we have a share of now.
Resource economies like New Zealand, Canada and Norway will do well if there is a global economic collapse. Scotland would have a lot of income as the price of oil goes up and up.
So the same expenses but a lot more income.
What are those figures, though? I don't know. And how could we turn it around? Oil?
I just don't see how Scotland can easily extract itself from the UK/global financial mess. It would be nice if it were possible but I just don't know how it could be that simple.
@anonymous,
It's difficult to get the full picture about stats because they are withheld or manipulated. I think if you look up GERS you'll get much of the picture but even though the SNP has signed off on the latest GERS I still think those figures are wrong.
There's a bit of a jedi mind trick going on here. Being within Britain does not protect Scotland financially from anything.
Yes, the oil would easily pay off Scotland's share of soveriegn debt. The problem is that Scotland's share of debt is going to increase because of government spending on wars and weapons' systems and now and massively on hand-outs to banks in The City. Scottish taxpayers are going to have to pay their share of that.
When a nation borrows money lenders have to be confident that you can pay it back. Oil gives them that confidence. And we know that oil prices are going to shoot up..
Under independence we can get out of the hole but as part of the union we're heading directly straight into a big wall.
The media and union politicians put a lot of effort into making Scots think that Scotland is too economically light-weight but the REALITY could not be further from the truth. With independence we have a great negotiating position, less costs and lot more income.
For my entry on oil see here:
http://scotlandunspun.blogspot.com/2009/11/fools-gold.html
How much of the UK debt would Scotland need to inherit in the scenario of independence?
Oh to be fair it would need to be 50/50, England and Scotland. After all Scotalnd would have all that oil while England only has - what was it? - 'foreign-owned football teams', whatever the hell that means.
@Peckham,
Not quite how it works. Debts are 'owned' by citizens so they are assumed on a per capita basis. Just like how oil money is distributed among the population i.e. England gets it's per capita share i.e. the vast majority of it.
Of course, after independence the oil proceeds will be derived according to jursidiction of the seas and according to international treaties that makes it predominantly Scottish as a matter of fact. Not to worry though England have enjoyed the bulk of it during the good years. We would be left to enjoy the much depleted resources.
The foreign football teams is quite simple. If you want to borrow money you have to prove you can pay it back. Scotland can use oil. Unfortunately England has very little in the way of resources or manufacturing that can be used as 'collateral' except for some weapons manufacturing, maybe some pop music and foreign owned football teams.
After the oil's gone there'll be nothing to prop up The City any more. Britain's petro-economy is over..
These are the realities however unpopular they are for those of a jaundiced disposition. Britania no longer rules the waves - that's not my fault, sorry.
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