Comments on: Grappling with debt http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/ Incisive and topical campaigns and commentary on today's issues and tomorrow's problems Thu, 24 May 2012 20:42:09 +0000 hourly 1 By: Michael http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16645 Michael Mon, 25 May 2009 16:32:22 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16645 This is a good start but it would be even more useful to have JR's thoughts on the limits at which gilt-selling might become problematic for the Treasury, rather than a generalised warning that it could happen "at a certain point". It would also be be useful if JR could provide some context on how the UK's fiscal position compares to other major borrowers. In terms of annual deficit vs GDP it's undeniably bad but in terms of accumulated debt vs GDP This is a good start but it would be even more useful to have JR’s thoughts on the limits at which gilt-selling might become problematic for the Treasury, rather than a generalised warning that it could happen “at a certain point”. It would also be be useful if JR could provide some context on how the UK’s fiscal position compares to other major borrowers. In terms of annual deficit vs GDP it’s undeniably bad but in terms of accumulated debt vs GDP

]]> By: Peter http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16644 Peter Sun, 24 May 2009 10:12:40 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16644 A farmer friend of mine told me something quite interesting the other day. Farmers generally make a monthly VAT return, rather than a quarterly return. This is because their outputs, the crops that they sell are zero rated for VAT purposes, whilst their inputs, fertiliser, sprays etc are subject to VAT. Normally therefore they receive a repayment of VAT, and so it makes sense from a cashflow view point to submit a monthly VAT return. In happier days, a return submitted at the end of the month would result in a repayment of VAT by the middle of the month following. Not any more. Now there can be a wait of two to three months before the repayment is made. My experience is that one of the first signs of a company running into trouble is the lengthening of the timescale before suppliers are paid. Whilst the anecdote above is not of course in any way important, I wonder if it is indicative of an altogether more sinister trend. A farmer friend of mine told me something quite interesting the other day. Farmers generally make a monthly VAT return, rather than a quarterly return. This is because their outputs, the crops that they sell are zero rated for VAT purposes, whilst their inputs, fertiliser, sprays etc are subject to VAT. Normally therefore they receive a repayment of VAT, and so it makes sense from a cashflow view point to submit a monthly VAT return.

In happier days, a return submitted at the end of the month would result in a repayment of VAT by the middle of the month following. Not any more. Now there can be a wait of two to three months before the repayment is made.

My experience is that one of the first signs of a company running into trouble is the lengthening of the timescale before suppliers are paid.

Whilst the anecdote above is not of course in any way important, I wonder if it is indicative of an altogether more sinister trend.

]]> By: adam http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16643 adam Sun, 24 May 2009 00:51:15 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16643 The Irish government covered it up and the Euphile government continue to cover it up, refusing the victims entry to the meeting, refusing to prosecute anyone, laughing in they face of those they allowed to be raped. The society for the protection of children 'lost' their documents The BBC will pretty much brandish the Tories nazi just for pulling out of the EPP. The Irish government covered it up and the Euphile government continue to cover it up, refusing the victims entry to the meeting, refusing to prosecute anyone, laughing in they face of those they allowed to be raped. The society for the protection of children ‘lost’ their documents
The BBC will pretty much brandish the Tories nazi just for pulling out of the EPP.

]]> By: Ian Jones http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16642 Ian Jones Sat, 23 May 2009 16:30:02 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16642 Other countries are in a worse position Government debt wise but they are supported by the savings of their citizens so in fact their debt to savings match. Examples are Japan and Italy. Unfortunately the UK economy is based on the US model of personal consumption, therefore either the Govt saves or the people save, they both cant run up debts. Interest rates on gilts quickly rising now even though the BoE is doing its best to buy the gilts and push up their price. Expectations of future inflation are now starting to overcome the BoE purchases, such that when the purchases stop and even reverse, interest rates will accelerate upwards. Its nothing but a policy to try to keep Labour in power. Other countries are in a worse position Government debt wise but they are supported by the savings of their citizens so in fact their debt to savings match. Examples are Japan and Italy. Unfortunately the UK economy is based on the US model of personal consumption, therefore either the Govt saves or the people save, they both cant run up debts.

Interest rates on gilts quickly rising now even though the BoE is doing its best to buy the gilts and push up their price. Expectations of future inflation are now starting to overcome the BoE purchases, such that when the purchases stop and even reverse, interest rates will accelerate upwards. Its nothing but a policy to try to keep Labour in power.

]]> By: Stuart Fairney http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16641 Stuart Fairney Sat, 23 May 2009 12:51:46 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16641 Maybe none at all could be as effective? Maybe none at all could be as effective?

]]> By: Denis Cooper http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16640 Denis Cooper Sat, 23 May 2009 10:44:52 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16640 Without minimising the problems we'll face repaying this excessive level of debt, it should be recognised that not all of the interest payments should be seen as money down the drain. Pension funds own gilts - they have to - and part of the interest paid by the government is being used to pay pensions. Go to the other extreme, where the government no longer had no debt at all, and there'd have to be radical re-think about how those beyond working age could have a guaranteed private income. Without minimising the problems we’ll face repaying this excessive level of debt, it should be recognised that not all of the interest payments should be seen as money down the drain. Pension funds own gilts – they have to – and part of the interest paid by the government is being used to pay pensions. Go to the other extreme, where the government no longer had no debt at all, and there’d have to be radical re-think about how those beyond working age could have a guaranteed private income.

]]> By: Freddy http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16639 Freddy Sat, 23 May 2009 09:02:42 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16639 Unfortunately, neither do the voters. Unfortunately, neither do the voters.

]]> By: Freddy http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16638 Freddy Sat, 23 May 2009 08:54:58 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16638 I don't understadn your point. Could you clarify, please ? I don’t understadn your point. Could you clarify, please ?

]]> By: Freddy http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16637 Freddy Sat, 23 May 2009 08:30:44 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16637 Or maybe none of them, given that catastrophic global warming is a scam. Or maybe none of them, given that catastrophic global warming is a scam.

]]> By: adam http://johnredwoodsdiary.com/2009/05/22/grappling-with-debt/#comment-16636 adam Sat, 23 May 2009 01:01:54 +0000 http://www.johnredwoodsdiary.com/?p=3734#comment-16636 i see (some in Ireland-ed) has been raping little boys and covering it up for sixty years. anyway This destruction of our economy is just another symptom of the cancer This country is now in self destruct. Full scale internal war has been declared on it I dont understand what is going on anymore. Does failure on exams now equal success. Does destroying a business now equal achievement and reward. Politicians are at full scale war on my democracy and freedom and property. Seems the conspiracy theorists have always been right i see (some in Ireland-ed) has been raping little boys and covering it up for sixty years.

anyway

This destruction of our economy is just another symptom of the cancer
This country is now in self destruct. Full scale internal war has been declared on it
I dont understand what is going on anymore. Does failure on exams now equal success. Does destroying a business now equal achievement and reward.
Politicians are at full scale war on my democracy and freedom and property.
Seems the conspiracy theorists have always been right

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