Funny money

During the pandemic a Conservative government presided over a major expansion of state debt offset by a major purchase programme of that debt by the Bank of England, itself owned by the same state. This mirrored a similar exercise by  Labour and the Coalition 2008-12 to overcome the banking crash the authorities engineered in 2007-8.

It looks as if on both occasions the state has got away with it. By the end of this year The Bank o& England will own £875bn of UK government debt which is therefore no longer a debt the state owes to overseas investors or to UK savers, but to itself. Normally states cannot get away with effectively just printing money to spend because it is inflationary. In the conditions of collapsed demand both brought on by the banking induced recession and then by pandemic closures creating so much fiat money was not inflationary. Whilst the Bank observed the nicety of buying up second hand government bonds instead of just giving the new money to the government to spend, it underwrote the government borrowing at close to zero interest and has removed the need to repay the debt to third parties.

Some say the pandemic printing may yet prove inflationary. It is true that like the Great Recession printing it has proved inflationary for financial assets and houses but so far general inflation stays around target. It could get more inflationary if wrong decisions are now taken about carrying on printing and borrowing too much. This is happening in the USA where inflation is already at 5% but the Bank of England has wisely announced an end to money printing this year. There still needs to be a stronger recovery before undue  monetary tightening.

227 Comments

  1. Peter
    July 24, 2021

    ‘Normally states cannot get away with effectively just printing money to spend because it is inflationary.’

    Never mind, there is always The Great Reset if it all collapses. You will own nothing, you will be happy.

    1. MiC
      July 24, 2021

      As far as many people go, asset inflation IS general inflation.

      The distinctions that economists and politicians make are of no interest to them.

      If they are trapped in poor quality accommodation and their chances of improving their circumstances constantly diminish, then they correctly deduce that they are getting poorer.

      This is the time bomb for the Tories, as their elderly unmortgaged voters dwindle evermore.

      1. No Longer Anonymous
        July 24, 2021

        +1

        Unfortunately the average age of mortality will approach 100. Perhaps home ownership is just being shunted on further along an extended lifespan and working life.

        1. Hope
          July 24, 2021

          JR, UK paying EU £11.1 billion after we allegedly left is funny money is it not? S3cond largest contributor! Would you like to correct your previous blog?

      2. Narrow Shoulders
        July 24, 2021

        You are an advocate of ever tighter lockdowns and paying people to stay at home for our protection Marty.

        How would you have paid for it? and you can only take the rich’s money off them once.

        1. MiC
          July 24, 2021

          No, I’m not.

          I’m an advocate of people following the Three Cs Rule, which has served Japan so well, along with the civic-minded use of masks as appropriate, and of course full uptake of vaccination.

          If people did this then lockdowns would not be needed.

          1. Peter2
            July 24, 2021

            You will never achieve zero covid.
            The virus is mutating and is out there.
            Vaccine is what we have in response.

          2. Narrow Shoulders
            July 24, 2021

            You praised the countries that locked down early or closed their borders Marty.

            You can rewrite your opinions as much as you like but you wanted to shut down hard you used China as an example of success and regularly referred to New Zealand and Australia who locked down their countries to incomers.

            How is it to be paid given you want to tax the rich and companies for other perceived inequities?

          3. MiC
            July 25, 2021

            I commended those who did what needed to be done before vaccines were available and with the scientific knowledge then available – notably NZ, Aus, China, Japan, Taiwan, Vietnam and some European countries, yes.

            Why ever not?

            They have saved hundreds of thousands, nay, millions, of lives.

            On the other hand, some of you on the Right are little more than a death cult it seems to me.

      3. Micky Taking
        July 24, 2021

        The time-bomb for the Tories contains unstable ingredients and they are degrading steadily, most likely to explode within a few short years. Recognition of the catalysts and defusing is urgent and it may be too late.

        1. jon livesey
          July 24, 2021

          Interesting collection of cliches. Does it mean anything, by any chance?

          1. Micky Taking
            July 25, 2021

            too late for the Tories?
            Will that do?

      4. Peter2
        July 24, 2021

        That’s not inflation MiC
        Being trapped in sub standard accommodation.
        And you are wrong as well about unmortaged old people because their assets get passed down to the people designated in their wills.

      5. Fedupsoutherner
        July 24, 2021

        But we were all voters with mortgages once MIC.

      6. Timaction
        July 24, 2021

        I don’t think out here in the real world there isn’t out of control inflation. Council tax up 5%. Energy prices up 10%. Food prices up varying amounts, all insurances up. I think its about time the Government changed what and how they measure CPI inflation so it reflects real life and NOT cheating like using RPI for tax rises and CPI for Pensions etc.

        1. steve
          July 24, 2021

          Timaction

          “Government changed what and how they measure CPI inflation so it reflects real life and NOT cheating like using RPI for tax rises and CPI for Pensions etc.”

          Governments also instruct their media to say the average national wage is a lot higher than it really is. They do it to make people think the country is doing better than in reallity and everything’s rosy, thus the government must be doing a good job.

          Bunch of liars the lot of them including their media.

    2. Oldwulf
      July 24, 2021

      @Peter
      “Some say the pandemic printing may yet prove inflationary. It is true that like the Great Recession printing it has proved inflationary for financial assets and houses but so far general inflation stays around target.”

      Printing money has proved inflationary in that it is likely a recession has been avoided. Presumably that’s a good thing.

      “..printing it has proved inflationary for financial assets and houses but so far general inflation stays around target.”

      Perhaps the main purpose of printing money is to protect the banks.

      1. Mark
        July 24, 2021

        Mortgages outstanding have increased from £1,451bn at the start of 2020 to £1,526bn at the end of May, with a big increase coming in June as the surge in completions ahead of the end of the stamp duty holiday plays through. Perhaps already close to £100bn of QE has been privatised into mortgage borrowing.

        1. MiC
          July 24, 2021

          Yes, and this has been going on for years.

          1. jon livesey
            July 24, 2021

            Through Labour as well as Conservative Governments?

          2. MiC
            July 25, 2021

            So long as there has been QE, so about two years Labour, the rest Tories, yes.

        2. Peter2
          July 25, 2021

          You often call for more state spending MiC
          Yet you seem to be against QE.

          1. MiC
            July 26, 2021

            Where did I last call for more state spending?

          2. Peter2
            July 26, 2021

            You have a terrible memory.
            You are often moaning about austerity.
            Most of your solutions to problems require more state spending.

          3. MiC
            July 26, 2021

            Where did I last “moan about austerity”?

      2. No Longer Anonymous
        July 24, 2021

        Not a bad bet re inflation. On an fixed interest mortgage.

        The best thing I ever did (counter to intuition) was double my mortgage, buy an unaffordable house, rent part of it out and pay most of it off over an up-front, interest-only mortgage starting in 2008.

        Totally un-Conservative and against the advice of all the old women worrier conservative voters with dodgy hips, who didn’t like my three story house. Paid off now. Boom !

    3. Bryan Harris
      July 24, 2021

      @Peter +1

    4. Everhopeful
      July 24, 2021

      I reckon this is/was The Great ( financial)Reset, trying to put right the awful mess they have got us in.
      They shut down everything so the counterfeit cash could not be spent. (Atishoo!😷).
      Under such circumstances you can have the hot little presses whirring and churning out dodgy notes yet avoid inflation.
      People use it to pay off debt and others just stuff it away like the banks did in 2008.
      Meanwhile prices are soaring anyway!
      They used to hang people for coin clipping and forgery.

      1. Hope
        July 24, 2021

        BoE already says inflation higher than published figures. We also know after 11 years Fake Tories cannot be trusted with the economy. It repeatedly failed to honour its promises and policies on balancing structural deficit. In March budget last year before lockdown Johnson went on a batshit crazy spending spree then shut down the economy!

        JR your govt economic record over 11 years reflects disaster. Taxation at 70 year high says it all.

        Lies over NIP, lies over fishing, lies over checks of goods, no Irish border etc. Immigration! We do not believe or trust you.

        1. Fedupsoutherner
          July 24, 2021

          +1

        2. Timaction
          July 24, 2021

          +1

        3. Jim Whitehead
          July 24, 2021

          +1

        4. Everhopeful
          July 24, 2021

          Oh yes. Sorry, I meant to say that it was the govt’s stupid theory.
          As if you could print money without consequences!
          Certain sure they are lying about inflation …they took house prices out of the “basket” ages ago I think?

        5. steve
          July 24, 2021

          HOPE

          “Lies over NIP, lies over fishing, lies over checks of goods, no Irish border etc. Immigration! We do not believe or trust you.”

          Yes it’s all bullshit & lies isn’t it, and most of it down to May & Johnson.

    5. lifelogic
      July 24, 2021

      It is inflationary and damaging as we will see. In effect year another tax on the productive sector.

    6. J Bush
      July 24, 2021

      +10 for the WEF reference, which, from its dictatorial decisions, the Johnson regime appear to be rigidly following.

  2. turboterrier
    July 24, 2021

    Is not debt money that sooner or later has to be paid back?
    The government are not helping itself when there are hundreds of cases if not thousands of people actually working but getting furlough payments. It is another scheme very well intentioned but open to abuse as its roll out due to the circumstances was not closely monitored.
    Like university fees, the majority of the money will be lost forever and the reliable tax payers will foot the bill one way or another.
    The fruit of the money tree is waste as like credit card debt and quick loans on offer, very few think about the payback and to the people it is not their money. It becomes their money only when the demands for payment increase. That cannot happen in civil and public services as they don’t own it in the first place. Change in the truest sense of the word is required and government has got to grasp that nettle.

    1. Sir Joe Soap
      July 24, 2021

      The money is spent with tech, food, building companies etc which all increase in value, and 20% of each transaction goes back to HMG. It makes both shreholders and the government happy and rich.

    2. William Long
      July 24, 2021

      I find it very difficult to get my head round the economic effects of repayment of a debt that your infact owe to yourself. I would very much welcome some words from out host about this.

    3. MiC
      July 24, 2021

      It is perhaps ironic, that it is literal conservatism amongst voters which makes them shrink from the Tories.

      That is, if you have a good, secure job with decent pay and conditions, and live in a pleasant environment with good amenities, schools etc., then you have much which to conserve, and most of these are threatened by Tory misrule, laissez-faire, and couldn’t-care-less.

      If they destroy all these, and leave people with nothing, then the dispossessed might well vote for them in the hope that they will rob those whom they now envy in turn of these things too.

      Sadly that seems to be the level of many new English Tory voters.

      1. Micky Taking
        July 24, 2021

        ‘leave people with nothing’?
        Do you live in the backstreets of somewhere like Blackpool, surrounded by broken families, children never having seen the sea, walking hungry to school, housing pitiful?
        You are expecting this to spread all over the south of England?

        1. MiC
          July 24, 2021

          I mean nothing worth conserving, such as demeaning ZHC jobs, an absence of occupational pensions, grim, crime-ridden surroundings, and no-hope schools.

          Think Hartlepool, maybe?

          1. a-tracy
            July 24, 2021

            Zero Hours contract workers are entitled to holiday pay 1 day in every 9 worked, they can train and there are plenty of jobs around at the moment, full-time. The people I know on ZHC are students and pensioners topping up their pension with odd days when they choose to work and they are quite happy on these contracts.

            What is Nest if not an occupational pension? The employer contributes 3% the Employee 5%. What is national insurance PAYE workers contribute employer 13.8% over the lel £9570 and the employee a further 12% + class 1A contributions. Just how much do you want put to employee’s pensions something akin to the 30% that state workers get? 24% from their employer? How many businesses would survive that Martin?

            My local labour area has the worst school bottom of the league and bad in comparison to the rest of the Country as for good amenities phah. We don’t get planting they’re too busy putting that in their preferred areas where the councillors live, our verges are left with overflowing grass for weeks on end which goes all over the road and then grass grows in the edges and road surfaces, potholes aren’t fixed and sometimes they’ll come along and just dump a bucket of tar in one that lasts a few weeks. They still take their massive council tax and now want more in a new garden waste bin tax. Since they took over the council it’s gone to the dogs in a labour supporting area!

          2. No Longer Anonymous
            July 24, 2021

            Or Mitcham. Where I was brought up.

      2. Peter2
        July 24, 2021

        It is more about how standards of living improve and under which system of government.
        It seems to me, during my lifetime that it is socialist political parties all over the world have ruined standards of living of the majority.

        1. SM
          July 24, 2021

          Peter, I saw this not long ago:

          “Ever noticed that you have never seen people fleeing Capitalism to seek a better future in a Socialist State? Never, ever, not once – think about that – and take all the time you need ….”

          1. MiC
            July 24, 2021

            Lots of people move from right wing countries to more left wing ones for a better life and generally find it, e.g. from the UK to New Zealand, or from Poland to France.

            Of course historically people will flee any tyranny to a lesser one, but your post is an outdated Cold War caricature.

          2. Peter2
            July 24, 2021

            I agree SM
            Well said.

          3. No Longer Anonymous
            July 24, 2021

            MiC

            They’re not really Left wing, though, are they !

            Try getting into New Zealand !!!!

          4. MiC
            July 25, 2021

            They are more left wing than this country has ever been or could foreseeably be, and these things are always relative.

        2. Peter2
          July 24, 2021

          MiC
          Do you you really think the UK and Poland are right wing.
          Then France and New Zealand are socialist states?
          Come on get real.

          1. MiC
            July 25, 2021

            The Tories left the European Conservatives because they were too left wing, and joined the far Right grouping along with AfD etc. So yes, I’d say that the Tory UK is very right wing.

            Thank you for confirming that no European Union country is a “socialist state”, as a number of posters here repeatedly insist that they are as part of it, and for that matter NZ is too.

          2. Peter2
            July 25, 2021

            “UK Conservatives very right wing”
            Dont be silly MiC
            Huge public spending
            Increased welfare benefits
            Huge numbers of new laws.
            Subsidies for green power in the billions
            Nationalising the railways.
            Over half a million new arrivals a year.
            PS
            I didn’t confirm that “no EU country is a socialist state”
            Stop making things up.

      3. jon livesey
        July 24, 2021

        “It is perhaps ironic, that it is literal conservatism amongst voters which makes them shrink from the Tories.”

        Shrink from the Tories by giving them an 80 seat majority followed by by-election wins in office?

        1. MiC
          July 26, 2021

          As I say, when voters have nothing to conserve, then they may well vote Tory.

          Reread my post.

      4. steve
        July 24, 2021

        MiC

        “it is literal conservatism amongst voters which makes them shrink from the Tories. ”

        You got that right for sure, though most of us wouldn’t call it literal conservatism, we’d call it utter disgust at what the party has become and who it is led by.

        “….and couldn’t-care-less. ”

        Not just the Tories Mic, it’s everywhere these days, supermarkets, NHS doctor’s Surgeries, banks, courier services…everywhere.

        All down to Johnson shifting responsibility and allowing lazy skivers to use ping as an excuse not to do an honest day’s graft, especially during fine weather.

        This is what Johnson does, and when he finds himself facing the music he has to go into isolation as well.

    4. Mark B
      July 24, 2021

      . . . people actually working but getting furlough payments.

      Whenever there is ‘free stuff’ you can bet the least needy or deserving are at the front of the queue.

    5. No Longer Anonymous
      July 24, 2021

      And I know of people deliberately exposing themselves to people to get themselves ping’d and another six days off… I mean… isolation.

      People simply do not go out and do this in a lethal plague situation.

      1. steve
        July 24, 2021

        NLA

        Oh yes they do, this is what’s causing the looming crises with food delivery, courier deliveries, even at GP surgeries. All the skivers are at it now.

  3. DOM
    July 24, 2021

    The debt issue isn’t the fundamental issue. It is to what purpose this debt is used to finance which is the important issue

    It seems the construction of a Marxist State governing all areas of life doesn’t come cheap. Johnson’s personal advisers know this only too well and have planned for such costs which of course will be borne by the civil population both in the immediate and well into the future.

    John’s focus on the financial aspects of Johnson’s social and political engineering project which is simply a natural continuum from Blair, Cameron and May detracts from the real cost that extends way beyond the financial consequences of this PM’s adoption of policies that wouldn’t look out of place in China, East Germany or the Venezuela

    Without the productive flexibility, energy and materially enhancing provision capacity of the private sector which unfortunately has also been brought under political control the UK would have suffered greatly.

    A vicious authoritarian politics as practised by all main parties and their State agents (aka, a visceral hatred of democracy, freedom of expression and it seems certain peoples with certain identities) is now the greatest threat to this nation’s civil and legal foundations.

    The London-centric political class appear to be determined to smash us into the dirt using all forms of strategies taken from some of the most vile ideologies.

    1. Everhopeful
      July 24, 2021

      +1

  4. DOM
    July 24, 2021

    The irony is that a supposedly free peoples are financing their own subjugation. State monitoring of all life will become common place in the short to medium term using ID cards, cashless financial transactions ending the private space of cash transactions and digitalisation to assert control over movement and online activity

    With new anti-speech laws about to be imposed upon us the expansion of oppressive control approved all by most of those who infect Parliament and the wider Socialist client state is all too real

    The voter deceived by the political State debt fuelled free-lunch offering dished out before each GE have inadvertently handed the two party State victory to do whatever they see fit to us.

    Only Conservative Woman is exposing this vileness whose primary aim is to protect and expand the two party, parasitic State

    1. Hope
      July 24, 2021

      +1
      plus curtailing free press, alleged hate speech etc. What we can eat, where we can go, and all those employment quotas in the public sector providing us third world public service. Still more taxation is the maser!!

    2. J Bush
      July 24, 2021

      +1 re: the conservative woman.

      Given the growing number of trolls coming onto that site now, strongly supports the ‘flak is at its greatest when you are over the target’, is accurate.

      1. Mark B
        July 24, 2021

        The way to deal with the Trolls is to do what I do – ignore them !

    3. Jim Whitehead
      July 24, 2021

      DOM, +1

  5. Lester
    July 24, 2021

    To give you some idea of how inflation works

    In the 1930’s you could rent a 1.600 acre shooting estate with a 16 bedroom house for….

    £300 PA

    Inflation destroys savings

    1. jon livesey
      July 24, 2021

      No, inflation destroys saving you insist in holding in cash. People who hold their savings in cash and then complain about inflation are pretty much idiots. You can always do much better than cash.

      1. MiC
        July 25, 2021

        Yes, if you want to accept higher risk or to make it less accessible – e.g. in property – then you can.

  6. Nig l
    July 24, 2021

    ‘Not printing money’? Seems like a ‘dancing on the head of a pin’ statement. Surely government debt eventually turns into money as it filters down from wherever it was spent.

    Maybe you would explain if this amount is on both sides of the ‘same’ ledger why it is not set off and cancelled. In any event your relaxed attitude to inflation is already costing us umpteen billion on the index linked paper HMG has issued.

    I am not convinced all commentators think QE will turn out to be as benign as you think albeit the alternative does not bear thinking about.

    In other news we read Boris misled us, no surprise, with way out of date figures (pre vaccination) on Covid percentages amongst the quarantined.

    This blog has been calling for up to date data, infected against quarantined for some time and this is now gaining wider traction. Why the hell is HMG basing its decisions on ‘useless’ dated information is beyond me.

    Is there anyone with any common sense making policy. Does anyone believe that anybody understands who can be quarantined and who can’t and given what we know now about the science, why?

    It’s a fiasco and real people are taking the only sensible course, ignoring it/deleting the app. The latest opinion poll also shows what people think.

  7. Confused
    July 24, 2021

    Cleverly said in parliament that the vaccine passports will also be given to those who had the placebo. Can you clarify this please. What percent of the public got the placebo? Was it given out demographically so only the poor got the vaccine and the elite got the placebo?

    1. J Bush
      July 24, 2021

      My first question I would be asking what percentage of politicians had the placebo and I would want solid evidence to support their answer? i.e. the batch lot number Placebo or otherwise) and how many joe publics were jabbed from the same batch?

      Cynical ? You bet. I have seen too many publicity stunt photos where the needle cap is still attached or where the injection site is hidden by the nurses hand. Anyone with experience injecting another, knows this is not the way you administer an injection.

  8. The Prangwizard
    July 24, 2021

    I do not understand all that top level stuff – there is something decidedly fishy about it. I know I must repay any borrowing or debt I have.

    I also know there seems to be inflation coming through. Experience tells me that as soon as there is talk of it, many businesses put their prices up if they need to or not – they claim legitimacy and quickly take advantage.

  9. We will never forget
    July 24, 2021

    I think this vaccine roll out is proof the political class world wide must be abolished, pensions and careers abolished. We need a new system. It is a scandal the so called vaccine has been rolled put this far.

    1. Everhopeful
      July 24, 2021

      +1

    2. jon livesey
      July 24, 2021

      Pity there is no vaccine against stupidity.

  10. Ian Wragg
    July 24, 2021

    Roaring inflation is coming to a street near you.
    Mark my words, buy gold.

    1. jon livesey
      July 24, 2021

      “Roaring inflation” with zero interest rates, and gold that has not given its speculators their money back right back to 1980.

      Seriously, gold was higher priced in 1980. post-inflation, than it is today. 44 years is a long time to wait to get your money back, and with no interest payments and no dividends.

      Gold is currently about the worst possible long-term investment, based on actual prices.

      1. MiC
        July 25, 2021

        Yes, so thought Gordon Brown, but he didn’t have a crystal ball.

  11. Everhopeful
    July 24, 2021

    Johnson has totally revealed his hand ( and the whole Tory party’s presumably?).
    According to The Telegraph he is implementing a health based social credit system.
    How about conspiracy theories now then?
    Presumably, if the cashless society bit is also true, we won’t need to worry about money for much longer?

    1. glen cullen
      July 24, 2021

      Are we all going to get a slice of the wealth….where do we sign up to this ‘brave new world’

    2. J Bush
      July 24, 2021

      I don’t doubt a ‘cashless credit system’ is the desired aim. It is certainly what the WEF want, “you will own nothing and be happy” and Johnson is doing his damndest to run up massive national debts, how much now 2 trillion and rising? Which will then, ‘for the greater good’, be offloaded onto the taxpayer, who won’t be able pay the stupendous tax demand. But don’t panic, we will accept your assets in payment…

      I will be more than happy to be proved wrong about this ‘conspiracy theory’.

      1. glen cullen
        July 24, 2021

        Some twenty years ago in a dubai theme park your hard currency was exchanged for a wristband with electronic money, great technology in its day, however everyone treated the electronic money as free monopoly money, with a swipe of a wrist you could buy anything. Purchasing things with hard currency give to time to reflect how it was to earned and the value of the products you’re buying. If we go ‘cashless’ I can predict a rise in credits, defaults and personal bankruptcy

  12. Bryan Harris
    July 24, 2021

    Is this how Corbyn was planning to finance his spending spree – Keep printing money?

    1. Everhopeful
      July 24, 2021

      +1
      Yes..plus lots of new taxes I expect! Taxing the working population on their garden size and inflated house value etc.
      Mind you a leading Tory wants us to “learn to love the interventionist state”.
      I don’t really think that’s likely!

  13. Dave Andrews
    July 24, 2021

    If the government see little inflation as a result of printing money, they will continue doing it until it does.
    I believe the government has now lost control of spending, and is terminally unable to balance budgets, so debt increase is now remorseless.
    At some point, a future generation will say “Not our debt” and there will be a revolution and a new state.

  14. Narrow Shoulders
    July 24, 2021

    Unlike the recession in 2008/9 much of the extra money printed by the government has been saved by the middle classes and debt has not been racked up by the lower classes to be repaid.

    Inflation is sitting in banks waiting for the opportunity to spend it on holidays, hospitality and second homes. The inflationary pressures have not yet disappeared so complacency is not a good look Sir John. At present due to uncertainty holidays are cheaper than last year and the year before, that will not last and with decreased capacity prices will surge. VAT cuts are still supporting hospitality so there is another 5% price increase waiting to happen and supermarkets will be wanting to recoup the costs of Covid compliance over the last year so customers will eventually pay.

    As everyone has to live somewhere, leaving housing costs (which are increasing rampantly due to the money sloshing around plus demand) out of any view of inflation is ridiculous.

    1. No Longer Anonymous
      July 24, 2021

      +1 on house prices/inflation.

      The contrast between my own 20s (buying a London house) on a junior wage and my sons’ 20s (no chance, even as top professionals) is truly frightening. And it doesn’t get much better in any of the other regions they can work.

      1. MiC
        July 25, 2021

        I don’t know why even property owners think that this is a good thing.

        Unless you want to downsize your prospects of moving somewhere better are reduced drastically by the bubble.

        I suppose landlords can charge ever higher rents etc., but for ordinary homeowners this is the case.

  15. Alan Jutson
    July 24, 2021

    So far the government may have got away with it, but what about us, and our savings, investments, and purchasing power.
    Owing money to yourself once you have manufactured it sounds like a good trick, but that is what it is in reality, it is fake accounting.
    You say the trick has been used a few times before, and the Government have got away with it, but that is in itself a problem, that means in their mindset it’s not a problem, and they do not really have to balance the books.
    Rest assured one day they chickens will come home to roost, they always do, and the taxpayer will foot the bill one way or another, perhaps not this generation, but it could be the next, or the one after that.

  16. agricola
    July 24, 2021

    Funny Money is appropriate, it would seem a mechanism for government survival. Sadly it is not available to Joe Citizen living in the real world. Whatever the carefully controlled inflationary figures state I can assure you prices have shot up in the UK. Pints of beer can now cost you between £5 and £6 out of London. I hate to think what Londoners have to pay. One sees the trend in Spain, though not as marked as in the UK.

    When are we going to call time on the EU’s subversive trade tactics, Cheddar Cheese has disappeared from the shelves at Lidl in Spain. If our government cannot read the signs, such as the NI Protocol and other impediments, and are not prepared to take major steps to halt it by reverting to WTO rules, they are not fit to govern.Their lack of action causes me to mentally right them off.

    1. MiC
      July 24, 2021

      But you voted for precisely for Cheddar cheese to disappear from shelves in Continental stores, along with Loch Fyne oysters and all the rest.

      Rejoice!

      You have it!

      1. Peter2
        July 24, 2021

        Can you explain why they are unavailable?
        Does the EU have a desire to punish the UK?

        1. MiC
          July 25, 2021

          You know why they are absent.

          The retailers simply can’t be bothered with jumping through all the hoops which your brexit has put in their way to import them.

          And there is no law which says that they must.

          Thant’s freedom.

          Enjoy!

          1. Peter2
            July 25, 2021

            Let me rewrite it for you MiC
            ….all the hoops the EU has deliberately put in their way to import them.

          2. MiC
            July 25, 2021

            As it has equally for ALL non-member countries.

            You seem to expect special, exceptional treatment.

            Why?

          3. Peter2
            July 25, 2021

            No special treatment just the same treatment as America China India South Korea and many more.
            Do they have lorries or containers of goods returned for the wrong colour ink on a simple form?
            Answer
            No they don’t

          4. MiC
            July 26, 2021

            You can shriek all you like.

            Lidl still won’t be bothered with the increase in hassle – and cost – of trying to import such food from the UK any more.

            And your silly brexit is entirely to blame, as repeatedly predicted.

          5. Peter2
            July 26, 2021

            Shriek?
            Just asking a question which as usual you fail to address.

            Food is still being imported. Lidl has supplies from all over the world.
            It is just the increasingly protectionist EU that is making imports into Europe deliberately more difficult for us.

      2. jon livesey
        July 24, 2021

        Right, sure. We voted for the EU to sign a Free Trade Agreement and then cheat by keeping goods out of the EU by non-tariff barriers.

        Which box was that one on in the Referendum?

    2. a-tracy
      July 24, 2021

      People can shop around if they find inflation going up at their local so much so that they can’t afford it. Wetherspoons is celebrating “freedom day” with £2 pints on Monday, and will let drinkers order at the bar. The pub chain said today that it will serve guest ales from local breweries for £1.99 a pint from next week. Around 700 of them had this offer on. Elsewhere prices are about £3. When you consider what it costs in wages, business rates, dray costs, glass cleaning, heating, cleaning, it is very reasonable.

      1. Peter
        July 24, 2021

        a-tracy,

        Agreed. Just had a pint of Oakham ales green devil(6% alcohol) for £1.99. Then a simple curry with a pint of Guinness for £6.45 at one of Mr.Martin’s establishments.

        Elsewhere in London prices are usually at least £4.50 a pint. Over a fiver is not unusual now.

        I was on my way home from the anti covid measures speeches in Trafalgar Square which will not get reported on the mainstream media. Some interesting speakers, some wacky theorists – like a massive Speakers Corner with screens and amplification. This post may get lost in moderation here too. We will see.

      2. MiC
        July 24, 2021

        What do you mean “let” drinkers order at the bar?

        Is it some kind of privilege, to have to stand there, and compete for the staff’s attention with allcomers?

        The outdoor table service in the recent hot spell has been delightful on the other hand, but that’s family-run pubs for you I guess.

        1. No Longer Anonymous
          July 25, 2021

          It depends how busy things are. I really dislike seeing staff running around in the heat wearing masks.

          But I don’t doubt you think that’s alright, MiC.

          Do you pay tips btw ?

          I make sure my ‘waiters’ get at least a fiver depending on rounds.

        2. a-tracy
          July 25, 2021

          Martin, apparently, until freedom day people could not order at the bar they had to order through an app, not all elderly people have smartphones and couldn’t order at the bar and had problems. I meant nothing more than that. I have plenty of family members that used to run pubs as you say delightful service and one people should be more than willing to pay a little more for.

          1. MiC
            July 25, 2021

            Yes, understood, and I agree about paying more.

            Thanks.

      3. No Longer Anonymous
        July 24, 2021

        I always pay a decent tip.

        Are you sure you are doing so ?

  17. Sir Joe Soap
    July 24, 2021

    It was sometimes said “if they paid x to stay at home the company would run better”. Perhaps this is has now been applied wholesale to a a whole swathe of mainly public sector but also many private sector employees? It’s interesting to note where we actually see gaps in the supply of labour. The whole food supply chain has worked marvellously under strain. The NHS and its associated freelance GP system has been, by and large, awful and will have pursuaded many with financialassets to go private for elective consultation and procedures. Many other service industries have held up with about 50% drop in efficiency because y is “working from home”.
    So financial assets have again ballooned in value, and the value of workers who are really needed in post will soon also inflate as they realise their value. For x, who stayed at home with the company still pounding along as usual, the future isn’t as rosy. The tide has gone out and x has been shown not to be needed, and y could be replaced by somebody more remote and cheaper.
    Perhaps the market is working to favour holders of assets who worked profitably pre-crisis and didn’t consume, while the x s and y s of this world who would have sat out years in post now have to find productive work.

    1. jon livesey
      July 24, 2021

      “It was sometimes said “if they paid x to stay at home the company would run better””

      It wasn’t just said sometimes. During Maggie’s privatization drive this was discovered over, and over, and over.

      The nationalised Steel industry turned out to be fifty percent over-manned. Fifty percent!

      This, incidentally is why Labour history blames Maggie for unemployment. It is because she moved people from the “useless employed” to the “not employed” category. She didn’t create unemployment – she just recognized unemployment concealed within nationalised companies.

  18. formula57
    July 24, 2021

    The whole world is off to hell in a handcart. Nouriel Roubini in “The Looming Stagflationary Debt Crisis” published at Project Syndicate on 30 June last says: –

    “Making matters worse, central banks have effectively lost their independence, because they have been given little choice but to monetize massive fiscal deficits to forestall a debt crisis. With both public and private debts having soared, they are in a debt trap. As inflation rises over the next few years, central banks will face a dilemma. If they start phasing out unconventional policies and raising policy rates to fight inflation, they will risk triggering a massive debt crisis and severe recession; but if they maintain a loose monetary policy, they will risk double-digit inflation – and deep stagflation when the next negative supply shocks emerge.”

    So the people’s Blue Boris needs to time losing a general election quite carefully to see to it that the blame is applied elsewhere, not that it would be wholly fair to land it upon him anyway when the financial ignoramus G. Brown is the one more responsible.

    1. MiC
      July 24, 2021

      It wasn’t Brown, who was responsible for the US’s exporting the negative equity of its poor around the world, using instruments of concealment and dodgy ratings agencies, was it?

      Come on.

      1. Mike Wilson
        July 24, 2021

        It wasn’t America that stood by while BRITISH banks came up with all sorts of clever wheezes to, effectively, Lena the same money multiple times. It wasn’t America that stood by while consumer debt in this country went from £650 billion in 1997 to £1.4 trillion by 2007. It was the New Labour government that stood by while a debt fest increased house prices by an average of 300% over that period. In some parts of the country, like Newcastle and Liverpool, house prices went up by a factor of FIVE!

        In 1997 you could buy a 2up-2down terrace in Newcastle for less than £20k. By the time the BRITISH government had allowed BRITISH banks to run riot for ten years, that same house was over £100k and unaffordable for local people. An army of Buy to Let landlords was also created in this period.

        The fact that American banks had got up to the same stunts is neither here nor there. The credit crunch happened here because the overnight lending mechanism stopped because BRITISH banks stopped trusting each other

        Come on, use your brain to find out what really happened and don’t regurgitate, like a New Labour parrot, ‘it started in America. In the UK it started with the run on Northern Rock.

      2. jon livesey
        July 24, 2021

        No, it wasn’t Brown. It was European Banks who insisted on buying sob-par US mortgage debt to get a small bit of extra yield.

      3. a-tracy
        July 24, 2021

        Brown did not need to release the mortgages for all free-for-all on mortgage loaning that he encouraged through his favoured banks the RBS and Northern Rock – I know people given 100% mortgages without even checking their earnings levels were legit. This was down to Brown copying Clinton like some big global con trick. We had Iceland taking the Mickey and our councils rubbish savings and investments there collapsing, putting up our rates to top-up their pensions, we bailed out Iceland, we bailed out the Dutch. We had the RBS allowed not to do due diligence buying the Dutch bank ABN Amro! Why, why on earth was such a big deal not checked out whilst he and Blair were too busy knighting the man that did that! He failed, he bust us.

        1. SM
          July 25, 2021

          +1

  19. glen cullen
    July 24, 2021

    But we have to keep the printers going to fund HS2, subsidies for electric cars, hotels for immigrants and 3% paying rises

    1. Sea_Warrior
      July 24, 2021

      Don’t forget the Stonehenge tunnel, which has placed in jeopardy the site’s World Heritage Site status.

      1. glen cullen
        July 24, 2021

        Plus the £5bn for the new army AJAX tank that will never be fielded

  20. lifelogic
    July 24, 2021

    There needs to be a stronger recovery you say. Indeed, and how are we going to get that with net zero, very expensive energy, the highest taxes for 70 years & still increasing, a nanny state, bonkers employment laws, restrictive planning laws, a dire NHS, £billions wasted on duff degree, red tape everywhere and a government that pisses money down the drain all over the place.

    1. lifelogic
      July 24, 2021

      If Boris became the old Boris again, instead of a nanny state, piss down the drain, climate alarmist, huge state socialist (one assumes demanded by deluded green dope Carrie) it would help encourage rather than deter investment in the UK.

      1. glen cullen
        July 24, 2021

        Concur

      2. Narrow Shoulders
        July 24, 2021

        Did you not pay attention when he was Mayor of London.

        This is what he does. He was always a bandwagon jumper and populist. Unfortunately for you and I this time round the bandwagons he has jumped upon are ones where we disagree with him.

        1. Beecee
          July 24, 2021

          Neither did you! When Mayor, Boris employed people who knew what they were doing to run London whilst he was non-executive Chairman doing his front man.

          As PM, unfortunately, he is saddled with politicians with whom to choose from to help run the country. Not a great pool of business acumen to select from, and running UK PLC is a business – not politics, although we and the media confuse the two!

          What do you expect?

          1. Narrow Shoulders
            July 25, 2021

            My point wasn’t about incompetence it was about jumping on bandwagons and being popular.

            Same person.

          2. MiC
            July 25, 2021

            No, it’s not a business it’s a country.

            But you still require competent, principled people.

            That second requirement might not be immediately apparent, but it becomes quite obvious in time.

  21. Mark B
    July 24, 2021

    Good morning.

    I do not and never have believed the inflation figures. Real world inflation is running, at a very rough guess, at about 6%. I make that assumption based on know price rises where I can compare old with new. Eg fuel bills, Council Tax and so on. All these bills are rising way above inflation rates quoted.

    As more money comes out of our pockets both through taxes and inflation we will become poorer and our ability to spend and keep the (private) economy going will become harder. At this juncture I believe more and more State money will be used to prop up the economy much like we see in Socialist and Third World economies. A very slippery slope we can, but I doubt we will, avoid.

  22. acorn
    July 24, 2021

    Firstly, “… the banking crash the authorities engineered in 2007-8.” Was actually caused by deregulation of private banks. Such banks were allowed to borrow from each other outside of the control of the BoE. When the music stopped they all stopped lending. The “liquidity” in the system (cash) froze solid. The magic money tree at the Treasury came to the rescue. Countries who’s “interbank lending” was heavily regulated did not suffer crashes like the UK and US.

    1. Peter2
      July 24, 2021

      If you are only talking about the UK you may have some points acorn.
      But you forget the USA disaster in its banking and mortgage markets ar the same time and how it infected us here in the UK

      1. MiC
        July 24, 2021

        Thank you Peter.

        I would remind critics of the then Labour government of your second sentence.

        1. jon livesey
          July 24, 2021

          European Banks bought sub=par US mortgage debt, not European Governments.

        2. Peter2
          July 24, 2021

          Thanks for agreeing MiC
          Brown failed with his regulations of the finaindustry.
          They loved the tax volumes coming in and failed to regulate the UK side.

          1. MiC
            July 25, 2021

            Yes, Brown failed to reverse Tory Big Bang.

            New Labour also failed to reverse key Thatcher privatisations and anti-union laws.

            There is much that they could, and with hindsight should have done.

          2. Peter2
            July 25, 2021

            He tore up a good financial oversight system and replaced it with a useless one, who failed to scrutinise what Northern Rock were doing.
            Or what was developing in America.
            His economic policies cut off credit to the banks just at the time they needed it.

          3. MiC
            July 25, 2021

            Brown believed the US ratings agencies.

            Blair believed the “high confidence” US “intelligence” over Iraq.

            Senior people in many countries made the same mistakes.

          4. Peter2
            July 25, 2021

            Northern Rock were not properly supervised by Brown’s new financial quango.

          5. MiC
            July 26, 2021

            So the monstrous loss of life in Grenfell Tower was also all down to failures of regulation, inspection, and enforcement by your analysis, but of buildings, and attributable to the Tories this time.

            Thanks for clearing that up.

          6. Peter2
            July 26, 2021

            Divert and run away again MiC
            It is what you always do.

    2. a-tracy
      July 24, 2021

      Acorn, what happened with Iceland and the Dutch bank then they just passed on their losses to the UK too

      1. jon livesey
        July 24, 2021

        No, the UK and Dutch taxpayers bailed out the Iceland Banking system.

  23. bigneil - newer comp
    July 24, 2021

    Last night on the radio – – An area of Manchester? ( i was tired } – is to have modified shipping containers to accommodate the homeless.
    Now nice. containers for them – – and those approx 1000 foregners who arrived recently are in which hotels????
    Priorities are clear.

    1. glen cullen
      July 24, 2021

      The foreign illegal immigrants are put up in 4* hotels for a reason…they’ve all self-identified as fully qualified doctors and engineers and are therefore entitled to better treatment than our own homeless citizens…..and what politician has the bottle to argue against that

    2. Andy
      July 24, 2021

      I heard an appalling story earlier about unaccompanied children crossing the Channel. They are being forced to sleep in Home Office office blocks because there is no suitable accommodation for them.

      What an appalling stain on our country that we are unable to properly look after desperate children.

      Incidentally – it should not be an either / or. We should be able to look after our homeless and our veterans and unaccompanied migrant children all at the same time. We can’t because you all vote for people who look after tax dodging billionaires instead.

      1. Glenn Vaughan
        July 24, 2021

        A classic example of faux compassion so typical of left wing hypocrites.

        1. MiC
          July 25, 2021

          What evidence do you have that it is false? From where do you get your amazing telepathic powers?

      2. Micky Taking
        July 24, 2021

        these unaccompanied children crossing the Channel are the result of English people buying places in France – where these economic illegal migrants could be housed.

      3. Mike Wilson
        July 24, 2021

        I assume you think we should have an unlimited supply of suitable accommodation, (not ‘children’s homes’, I trust) in case any unaccompanied children turn up. As you are so appalled at our apparent lack of provision, why don’t you offer to give a home to a couple of unaccompanied children?

      4. a-tracy
        July 24, 2021

        Which UK tax dodging billionaires are this government looking after Andy? In what way?

      5. jon livesey
        July 24, 2021

        It’s obvious what’s going on here. Labour want the taxpayer to pour more and more money into benefits for young male unskilled illegal immigrants.

        Why? Because young male unskilled illegal immigrants grow up into Labour voting etc

        And where do the children and UK veterans come into it? They don’t. They are just emotional trigger words.

        1. MiC
          July 25, 2021

          Illegal immigrants cannot vote.

          1. graham1946
            July 25, 2021

            Weren’t you telling us recently they are not illegal immigrants?

          2. MiC
            July 26, 2021

            Due process finds out which were here lawfully and which were not.

            Generally the second are expelled and cannot vote anyway.

      6. Peter2
        July 24, 2021

        Have you got any spare rooms available in your homes Andy?
        You seem very keen and motivated.
        Come on do your bit.

      7. No Longer Anonymous
        July 25, 2021

        So… how many have you taken in, Andy ???

        Fact is… most of the boats I see are laden with men of military age with the odd token child aboard.

        Reverse this situation.

        Had thirty England supporters taken to the high seas in an unseaworthy RIB and hostaged a child to legitimise themselves and forced a rescue to get themselves to civilised EU France to see a football match.. what do you think the RNLI would have done ?

        They’d have been all over the BBC condemning it !

        So that’s why I’ve quit the RNLI after 17 years and you’re now paying £40 a month (double my previous contributions)

        (No to Ed)the RNLI and to the National Trust. That’s what the Tories have done !

      8. No Longer Anonymous
        July 25, 2021

        Ermm………. They’ve escaped the EU, Andy.

      9. mancunius
        July 25, 2021

        Plenty of room in your house, Andy – introduce them to the delights of your hideously white enclave in South Bucks. Go on, you know it’s the Right Thing To Do. 🙂

  24. Andy
    July 24, 2021

    The fundamental problem is that politicians are not honest with the electorate – and voters are not honest with themselves.

    If you think the government spends too much – and it does – you have to look at what it actually spends our money on. Not what you THINK it spends our money on. What it actually does spend it on.

    And this is where pensions come in. Pensions are the biggest single item of government expense. They cost over £100bn per year. Every year we spend more money on pensions than HS2 will cost in its entirety. HS2 is a multi-generational project and you all moan about the cost of it but every single year pensions alone cost us more.

    Add in social care, pensioner perks and extra NHS treatment for the old and all of a sudden pushing on for half of all spending goes on the elderly. That is completely unsustainable. There are not enough young people paying into the system to support all the old people taking money out of it. And, no, the vast majority of you have never paid as much in as you now take out.

    It is, of course, easier to blame half a dozen foreigners in a dinghy. Or a negligible contribution to the EU budget to facilitate the frictionless trade you have removed, or to literally take money from the mouths of poor brown kids by slashing intentional aid. But the harsh truth is that if you want to sort out our country’s finances it means getting tough on granny.

    But grannies vote in large numbers and they don’t realise they are the problem. Which is why we have a problem.

    1. MiC
      July 24, 2021

      It would be interesting to compare the public cost of e.g. a state-managed occupational pension system like France’s with the UK’s flat pension.

      TBH I don’t know how much – if anything – the taxpayer contributes there as against employee/employer contributions, but clearly there would have to be a safety net for those who were not employed during their lives.

      However, that could be greatly offset by the occupational pensions.

      1. jon livesey
        July 24, 2021

        It’s a nonsense “comparison”. In some countries you pay taxes out of which pensions are paid. In other countries you pay the same amount into a “pension fund” out of which pensions are paid. There is really no difference in cost. You pay for your pension either way.

        1. MiC
          July 25, 2021

          There is a difference.

          With a state-managed collective occupational pension fund, employers and employees contribute as with NI, but the payments are akin to a DB scheme rather than a flat rate like in the UK, and so certain contributors may feel less aggrieved.

          There is also the matter of what is done with the fund – where there is one – and whether it is grown by investment etc.

          However, in the UK – as with health – people are only allowed to conceive of two options, that is, whatever we have hitherto done or what the Americans do.

    2. No Longer Anonymous
      July 24, 2021

      And what was needed was never Help to Buy (which only jacked up house prices), nor was it out-of-town housing estates for young people where there is no work – what was needed was retirement estates of bungalows out-of-town and Help to Move (for granny)

    3. Derek
      July 24, 2021

      LOL if it were just “half a dozen foreigners in a dinghy” they would be no problem. The fact is, there are over 200 per day coming here – courtesy of British boats that deliver them safely to our shores, and it is the taxpayers, the workers of the country who have to pay for their free-life here. Unlike the “bad” elderly you describe, these economic migrant illegals have paid nothing into this country and have no affiliation with us apart from becoming their own personal benefactors. Why should we tolerate that abuse of our compassionate nature?
      On arrival, they immediately become a burden of Social Services, the NHS and the Welfare State.
      If it is not stopped, where will this madness end? When this country is so diluted of true Brits that itself becomes poor enough to be declared a Third World Nation? Appeasement never pays.

    4. Peter2
      July 24, 2021

      Pensions are funded by employers and employees National Insurance Contributions
      Do you not realise this young andy?
      Over 30 years contributions to get a meagre pension.

      1. MiC
        July 24, 2021

        No, there is no dedicated fund nor earmarking of those revenues any more than there is vehicle tax.

        1. a-tracy
          July 24, 2021

          National Insurance Fund
          The three British National Insurance Funds hold the contributions of the National Insurance Scheme, set up by the Government of the United Kingdom in 1911. The National Insurance Scheme was established on 5 July 1948 to provide unemployment benefit, sickness benefit, retirement pensions and other benefits For contributors. Search domain assets.publishing.service.gov.ukhttps://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/954496/Great_Britain_National_Insurance_Fund_Account_-_2019_to_2020.pdf
          The National Insurance Fund (NIF) holds National Insurance Contributions (NICs), paid by employees, employers and the self-employed. Voluntary contributions are also paid into the Fund. Receipts paid into the NIF are kept separate from all other revenue raised by national taxes and are used to pay social security benefits such as contributory benefits and the State Pension.

          1. MiC
            July 25, 2021

            Thank you a-tracy.

            I’ve just had a read and it proves that one should never rely upon hearsay – even a lifetime of it.

            It’s interesting that it generally runs a substantial surplus, and what is done with this, rather than to increase pensions or benefits.

          2. a-tracy
            July 25, 2021

            I would imagine it is important to keep a surplus and invest it safely so that it grows rather like a sovereign investment fund as we’re taking in so many new people that may never build up sufficient pension credits but will all require pension credits, along with all the other British nationals who don’t work for sufficient years or only work part-time and don’t pay National insurance but will all require pensions. They’ve put up the age of pension entitlement, 100,000 extra people than expected died last year, it is behopes its not in the hands of similar investment agents that invest local Council’s savings and investments!

        2. jon livesey
          July 24, 2021

          There doesn’t have to be a “dedicated fund”. You pay taxes out of which pensions are paid. Do you prefer the fiction of imagining you are paying into a “fund”?

        3. Peter2
          July 24, 2021

          Wrong.
          Just ridiculously wrong Marty.

      2. Dave Andrews
        July 24, 2021

        So where was the surplus in all these years of NI contributions, put by for when the contributors retired? That’s right, it doesn’t exist, all squandered by borrow and spend governments. Governments voted in by the electorate of the day, and shouldn’t they take their share of responsibility for the debt, rather than demand more pension when they retire?
        If my personal pension company behaved the way government has, they would be accused of running a Ponzi scheme.

        1. MiC
          July 24, 2021

          They would if they claimed there was an invested fund – but they don’t cos there ain’t.

          1. MiC
            July 24, 2021

            The Government, that is.

          2. Peter2
            July 24, 2021

            Twaddle

          3. MiC
            July 25, 2021

            Yes Pete it was.

            Seeing what is done with the surplus, it’s perhaps no wonder that its existence is not publicised, and why the urban myth which I repeated is fostered.

      3. graham1946
        July 24, 2021

        That’s been reduced. I had to do 44 years to get a meagre pension. Had we been allowed to invest the NIC pension portion, each pensioner would now have a pension of at least 20,000 pounds per year as against the pathetic sum the government doles out in a giant ponzi scheme.
        Unfortunately, Andy has no idea about investments or economics, he is a 12 year old intellectually, beating the same old drum because he can think of nothing but his hatred of the elderly who built the country for him, first and foremost hatred for his own mother. Andy is lucky that he and his ilk will not have to pay in for so many years as we did to get a pension as he only started his working life halfway through, as he has told us he has been to uni and has a degree of some sort. He can’t have been paying in for much more than 25 years by now, half of the years I paid in. His super current lifestyle of big cars, big house, private education for the sprogs, foreign property paid for by his detested, elderly by way of his education.

        1. MiC
          July 25, 2021

          Yes, but our NI has to provide pensions for everyone, not just for the contributors when they retire.

          That said, a managed, invested fund would likely perform better for all, though with a certain amount of risk.

        2. a-tracy
          July 25, 2021

          Graham, I’ve discovered a new word for Andy today misanthrope, due to his uncontrollable anger, rage and hatred for British pensioners, he often seeks vengeance just today he wants to take 25% of people’s contributed to pensions off them. His wrath has no bounds. Andy needs to take care it will burn him up.

    5. Micky Taking
      July 24, 2021

      I had to laugh at you Andy. You rarely fail to amuse. What you don’t realise, or do you? that those grannies (and grandads too) look at the middle-aged sneering whinger swanning around in his toy electric car costing the equivalent of their mortgage years ago, with your kids at private school learning to be privileged oicks, when not boasting of the French chateau, all the while humouring the elderly neighbours- resenting their hard-earned pensions and paid up mortgages, and using up those NHS services…The majority understand you to be the problem, but like a comedian tripping up on the stage – you keep us laughing.

      1. a-tracy
        July 25, 2021

        The pensioners I know aren’t using up the NHS services, they’re terrified of going into the NHS right now, they’re also not getting seen by GPs. I know one old lady suffering with debilitating vertigo who has been told via a telephone call she needs to have a head scan – three weeks later – nothing not even a call back to check up on her. Another fell and severely injured her back in her 80’s suffering it out in bed alone, no amount of coaxing will get her to go and get checked out.

    6. Peter Scarlet
      July 24, 2021

      “Add in social care, pensioner perks and extra NHS treatment for the old and all of a sudden pushing on for half of all spending goes on the elderly. That is completely unsustainable.”

      Pre-pandemic, government debt was falling as a % of GDP. What is unsustainable about that?

    7. Bill B.
      July 24, 2021

      Pension funds suffered badly from the economic decline caused by lockdowns, which is another reason why we must never lock down again. Fewer in work means fewer employee and employer contributions. Shut down and sold off offices mean the commercial property investments of the funds take a big hit. If the economy was in safe hands rather than this ‘Tory’ wrecking crew, prospects for pensions would look a lot better.

    8. Fedupsoutherner
      July 24, 2021

      I presume you are including your parents in this. Your children and you will be old one day although with your attitude I’d be surprised if you make old age. You never answer the question Andy. What would you do about pensioners. You wouldn’t want them working and taking jobs from kids even though many still do and are more loyal and reliable than the youngsters. You don’t want them in houses and they are to get no nhs medical care. Perhaps a concentration camp would suit? You really are a pathetic individual and one the world would be better off without and you haven’t got old yet .

  25. formula57
    July 24, 2021

    O/T – You are owed an explanation lest you start receiving baleful looks from under-performing Ministers for I have taken very strong action indeed in my capacity as a Redwoodista (that I note for any new readers is self-defined and in respect of which Sir John bears no responsibility or blame at all).

    Having asked the people’s Blue Boris himself in November last to start reading this diary every day so he would know what he should be doing, and being disappointed in not then seeing a large boost in Government performance but only intermittently a very modest improvement, I have urged a fresh effort with more diligent reading. Not, as may be supposed, by repeating my request to the Prime Minister but by asking Mrs. Johnson to offer encouragement. A strong measure that some may even see as underhand it may be but needs must as the times demand. I thought you should know.

    1. Everhopeful
      July 24, 2021

      + a few million!
      Lol! Lol!
      Give him detention and make him write out every single day’s blog x 1000.
      Shame Johnson doesn’t want to take advice from sane quarters!
      More interested in doing the bidding of ….?

    2. MiC
      July 24, 2021

      Yes, he absolutely should read it.

  26. No Longer Anonymous
    July 24, 2021

    Other countries and global corporations decide if your money’s good enough.

    Our Government can set the printing presses on full speed and pretend that there’s nothing to fear from it all they like.

    The fact is that a Mars bar (a reliable measure of inflation) is now Fun Size but in a full size wrapper.

    1. glen cullen
      July 24, 2021

      It feels like we have a ‘fun size’ government but we’re paying for a ‘full size wrapper’…the size of the cabinet might be the same but the quality of ingredients and the size of the output is greatly diminished

      1. Fedupsoutherner
        July 24, 2021

        Ha ha, that’s a great one Glen.

  27. glen cullen
    July 24, 2021

    I try not to follow twitter, as I believe that it’s a pathform only for the media and politicians
    However, SirJ your tweet today about ‘electric car ads’ was spot on

    1. Everhopeful
      July 24, 2021

      +1

    2. Andy
      July 24, 2021

      I don’t recall a petrol car ad telling me its range or how inconvenient it is to refill. They usually don’t bother with the price either. So what’s the difference? Except the fact that the electric car is better.

      Anyone test driven a Tesla yet? Or are you scared that it’ll embarrass your old banger by being better on every way?

      Reply Most people cannot afford a Tesla. We are happy with the 400 Mile plus range of the typical petrol/diesel and the five minutes refuel at any of the many filling stations in every area.

      1. Fedupsoutherner
        July 24, 2021

        A friend of ours had one for 6 months. He loved the car but charging was too inconvenient and there was always the worry of a flat battery. You do have a tendency to be repetitive in your posts Andy. Kind of obsessed. That’s a condition but i can’t think of the name right now.

        1. graham1946
          July 24, 2021

          Immaturity perhaps?

          1. Fedupsoutherner
            July 24, 2021

            Graham, that’s it.

      2. glen cullen
        July 24, 2021

        Why not allow free market forces to operate in a level, fair and open playing field and test your theory that the Telsa electric car is better in every way
        Allow the consumer the choice to decide which is better

      3. Mark
        July 24, 2021

        I have yet to find an electric car design that I would even consider to buy. Not dog friendly, too much space taken by batteries, inadequate range, shortened significantly if you need to keep warm or cool. I do seem to remember one car being advertised as being able to drive from Land’s End to John O’Groats without needing a fill-up, promoting its fuel economy.

        My present vehicle will do over 700 miles on a tankful, and its air-conditioning has been a big boon (and essential for the dog) during the hot weather, with long drives through the countryside lasting hours at a time, or even most of the day being a pleasure – and no need to worry about trying to find a charging point in the Welsh mountains.

        1. graham1946
          July 24, 2021

          Cars were usually sold with mpg figures. I guess Andy doesn’t know how to find out how much petrol a car can hold thus cannot work out the range. Too taxing for him presumably

      4. Micky Taking
        July 24, 2021

        Perhaps being ignorant of these things, you don’t know we can, and do, buy used cars of quality for £5k to £10k that will go on for years – probably longer than your Tesla. No problems with long journeys, 3 minutes to refill the full range, no searching or planning where to connect to power source. Easy to fix/repair unlike your monster battery. Some us can even boast more justifiably.

        1. glen cullen
          July 24, 2021

          I have an average mid sized car for commuting, an 80s ford in the garage and a small 2-stroke motorbike…for fun – does anybody remember those days when we drove, cleaned and repaired our own vehicles just for the enjoyment ?

          1. MiC
            July 25, 2021

            My first vehicle was a Morris 1000 ex-PO van.

            I don’t recall thinking that kicking the upper footwell in the passenger side – to jolt the electric fuel pump back into life – was that much fun, TBH.

            I carried a tool kit, and could fix most of what was likely to go wrong roadside and I was never stranded. There’s no chance at all with a modern fly-by-wire car though.

            For that reason all-electric cars should be an improvement. It’s the management of an ICE, its cooling, its exhaust, and its lubrication, which are problematic.

          2. Peter2
            July 25, 2021

            Your electric car will cost a min of 20k
            Average new electric cars are 30 to 40k
            Your old van probably cost a 2k

          3. MiC
            July 26, 2021

            £275 actually, in 1976.

            Electric cars cost about the same as I pay for an ICE one.

          4. Peter2
            July 26, 2021

            I was actually valuing your old van in 2021 terms but that doesn’t alter the fact that new electric cars are more expensive than new normal cars.
            Take a look at prices of the Nissan Leaf or the small Renault and compare petrol versus electric prices.

    3. Bryan Harris
      July 24, 2021

      @glen cullen

      Twitter falls into the same category as FB as well as the MSM – all to be avoided, and indeed there are better things to do than keeping up with the fake news from these woke establishments

      1. graham1946
        July 24, 2021

        Their adherents are not called the ‘twaterati’ for nothing.

        1. Bryan Harris
          July 25, 2021

          +1

  28. Mark
    July 24, 2021

    Government spending has been put on the Bank of England credit card. While you spend and the credit supplier is willing to let you carry on there is no pain. It is only when the bill payment date looms that the pain emerges. UK debt has a relatively long average maturity.
    But the BoE has concerns about the future effectiveness of further bouts of QE. It may even switch from merely not extending the government credit card to securing repayments by forcing the market to finance some redemptions, rather than buying replacement gilts. Such action will at the margin increase yields and interest rates, and switch borrowing to the open market.

    Government plans for net zero will require £2-3 trillions in QE if they are going to try to avoid consumer pain. The estimate from the OBR of £459bn, relying on the nonsense figures from the CCC for the overall cost of £1.4 trillion, is merely dipping the toes in the water to explore the effects. No account has been taken of the consequences of economic collapse from shutting most of industry, making it internationally uncompetitive, and trashing our balance of payments.

    Already polls are signalling unhappiness with the proposed increases in national insurance. I hope Sunak is spending his time in isolation looking at real answers to the questions from Andrew Neil that he swerved. Net zero is unaffordable. We need a vibrant economy able to pay its way to prepare for the next headwinds and to help reduce our debt and borrowing dependence.

    1. a-tracy
      July 24, 2021

      How can he put any extra on English grads, they’re already paying 20% tax, 12% ni over £9500, 5% nest (extra ni dressed up), 9% grad tax plan 1 over £19,895 pa.

      So the government is already taking 46% over £20k and more in the higher earnings group.

  29. Stred
    July 24, 2021

    The Bright Blue energy policy adopted by the government will cause huge inflation. Electricity is costing 16 pence/kWh already because of increasing renewables. National Grid are building higher capacity in the HV pylons and the local distribution will all have to be upgraded with the cost going to the consumer.
    The change to 10% ethanol petrol will cost motorists with 1 litre engines 10% more, as it has less energy content and consumption goes up.
    As you say on Twitter the electric car adverts don’t mention the price. Even my five year old diesel has such complicated electrics that it has to be fixed by the main dealer. No wonder the industry is going along with the illusion that we can change the climate by going electric.

  30. Martin
    July 24, 2021

    The price of some assets has already risen very quickly. Share prices have risen way ahead of any economic growth. The 0% bank rate has driven this in part, but maybe some see them as better investments than cash in whatever currency. Add to that issues with all sorts of supply chains due to the chip shortage, and we have new challenges.

    We are in a sense going boldly where no economy has gone before.

  31. ChrisS
    July 24, 2021

    Sooner or later a government has to balance the books – or at least reduce deficits to manageable proportions, such as the 3% limit the EU is supposed to impose on Eurozone members ( but which it effectively ignores).

    In our case, before the Pandemic, England’s deficit was negligible : It was only £74 per head of population or 0.26% of GDP. That is substantially less than England’s contribution to the UK’s overseas aid budget.

    The rest of the UK is the problem : The per capita deficits in the other three parts of the UK are way out of control :
    NI £4,996 or 19.35% of GDP
    Wales £4,307 or 17.44% of GDP
    Scotland £2,482 or 8.10% of GDP

    In these three regions, the 2019 deficits totalled a massive £36.4bn, well over three times our entire contribution to the EU budget. This is effectively all paid for, or rather borrowed, by English taxpayers.

    When is a Westminster government going to even start to get these three regional economies under control?

    We can’t do much about sparcely populated Wales, but my solution would be to allow Scottish independence ASAP and encourage the reunification of Ireland.

    Apart from putting the fear of God up the Irish Government, who know only too well they can’t afford a United Ireland, England and Wales would then be a very wealthy and efficient unit well within reach of eliminating its deficit entirely.

    1. jon livesey
      July 24, 2021

      “Sooner or later a government has to balance the books – or at least reduce deficits to manageable proportions”

      No, they don’t. They *may* do so, but they don’t have to. Japan is getting along fine with nearly three times our debt level – and Japan is always perfect, right? – and before that here in the UK we had over two times GDP debt in the forties and eventually inflation gradually reduced it to very little.

      All this stuff about what Governments “must” do is just people tying to apply their household pseud-morality to Government, which prints its own money, and therefore does not “have” to do anything as long as it keeps inflation within normal limits.

      1. ChrisS
        July 25, 2021

        The main point I was trying to make is that England is being held back by the extremely poor performance of the economies of NI, Wales and Scotland.

        England alone, would able to reduce taxes dramatically and spend quite a lot boosting the economic regions that have been left behind during the 45 years of our EU membership.

        There appears to be no obvious solution to the Welsh economy and in monetary terms, England can affords to carry Wales. However, Scottish politicians want no help from us, yet we keep throwing billions their way and get precious little in return. Let them have their independence, if they vote for it. If they vote to stay in the UK, the gravy train has to stop and Westminster needs to get Scottish spending under control. That means an immediate end to “free” prescriptions and university fees and a switch from Socialist to Conservative economic policies.

        Holding on to NI makes no sense. It’s only chance to have its economy rescued is for it to be fully integrated with Eire. The EU is very good at throwing money at poor performing regions.

  32. Derek
    July 24, 2021

    All of us mortgagors know if we do not repay our debt, we can lose our homes. However, the Government borrowing even more on top of previous borrowings appear to be immune by the way they have continually burned though the money. But! They’ll not lose the homes.
    They will have little to lose when the Global debt crisis really hits home, for it is those mortgagors and British taxpayers who will ALWAYS end up paying for any Government profligacy. Government are not spending their own money, so they will actually lose none of it. Waste yes, lose no.
    So much for democracy here, for these same citizens were never given the opportunity to voice their own opinions prior to any Government decision that seriously affected the health of OUR economy and their own personal wealth.

    1. jon livesey
      July 24, 2021

      “All of us mortgagors” have to pay beck debt with money you earn. Government pays back its debts with money it prints.

      1. Derek
        July 25, 2021

        So much so that eventually, the FX devalues our currency, which in turn, accelerates inflation. In doing so it is the tax payers – the consumers who are hit the hardest. Again. Inflation adjusted salaries to compensate? No chance.

  33. Mike Wilson
    July 24, 2021

    With the exception of Acorn, to whom I am indebted for putting me right, few on here appear to have a clue how the banking system actually works.

    Say Bank A lends 200k to Fred as a mortgage. Fred buys a house and pays the money to Jim, who banks with Bank B. Jim buys a house with a £220k mortgage that day, from Bill. Bill banks with Bank A. At this point Bank A has created money out of thin air and lent it to Fred. They now have a 200k asset – Fred’s mortgage – on their books. Likewise, Bank B has created money out of thin air, lent it to Bill as a mortgage, and now have a £220k asset on their books.

    That night settlement takes place. All the payments that have occurred during the day are totalled up and some banks owe others and some are owed. In my very simplified example, one bank owes 20k to another. This debt is settled from their reserves. 20k changes hands but the banks, between them have assets of 400k on their books.

    If one bank owes more than it has in reserves, the others lend it the shortfall – this is the fabled ‘overnight lending’.

    85% of the money banks create out of thin air is lent into the residential housing market. The whole thing is a ponzi scheme that only fails if there is a house price crash and the assets held as security for the debts become worth less than the debt.

    What happened in 2008 was that the overnight lending market simply shut – as the banks suddenly decided they didn’t trust each other as, via Mortgage Backed Securities and Collateralised Debt Obligations, they had been lending the same ‘created out of thin air’ money more than once.

    As for QE, it just proves the whole thing is a game. Under normal circumstances no-one would lend any government money (by buying bonds) knowing that when said government needs more money they will simply print money and buy up the bonds the have previously sold. It is a cunning stunt and in days gone past would have seen the (new) bond market collapse.

    These are strange days. Gold, or even Bitcoin, might be a good idea.

    1. acorn
      July 24, 2021

      Mike, don’t mix the terms money and credit. The Treasury issues the money (M4 in BoE terms), Private Banks issue credit (M4L in BoE terms). Treasury money is referred to as vertical money. Private Banks’ credit is referred to as horizontal money. Horizontal money always sums to zero. For every asset on a balance sheet there is an equal and opposite liability. If you are a BoE licenced private bank with a reserve account at the BoE, you are allowed to call the credit you create in your customers accounts Pounds Stirling that can circulate freely in the economy with the Treasuries money.

      Vertical money is totally different. There is no balance sheet where assets balance with liabilities. The Treasury creates and spends its own monopoly money into the private sector and gets it back by taxation every time it moves in the private sector economy. The difference between the two at any moment is the amount that is being saved in various forms by private sector households and businesses. This eroneously called the national debt when it is actually the national savings of the private sector. To be clear. The government DOUS NOT BORROW ITS OWN MONEY FROM ANYBODY EVER.

    2. a-tracy
      July 24, 2021

      Perhaps we should have the old building society loans from deposits system again.

      https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy

      What are people’s deposits used for then, does that cash go to the central bank? Who holds it?

      1. acorn
        July 25, 2021

        atracy. Customer deposits become part of the bank’s reserve capital, much like share holders. If they want more capital they will raise the interest rate on savings to attract more deposits.

        If the bank goes bust you lose your money like share holders. Which is why the government insures your deposit for about a max of £80,000 per customer.

        1. a-tracy
          July 25, 2021

          It’s like being a shareholder with no dividend because they’re paying hardly any interest?

          I actually first learnt that the bank owns the money you deposit rather than you when I went one day about 20 years ago to take out £2000 to loan to my brother, they wouldn’t give me my money back without a day notice and without a full explanation of why I was taking my money out!

  34. glen cullen
    July 24, 2021

    We have funny money; and after watching the BBC today I believe we have funny Olympics – the contestants are all professional, they play DJ music throughout, keep asking how everyone feels and proclaim everyone, even the losers, as being exceptional, everyone is now a woke superstar – the Olympics is now an elite, corrupt, political institution that we shouldn’t support

  35. Lindsay McDougall
    July 24, 2021

    QE and ultra-low interest rates have caused asset prices, most notably house prices, to go through the roof. The median house price to median income ratio was just below 3 in the mid-1990s and is now over 8. This has resulted in a major wealth transfer from the young and the middle classes to the elderly and the ultra-rich. In the last few months CPI inflation has risen from 0.7% to 2.5% – and that’s year on year inflation; on a quarterly basis, the increase is much faster.

    So when you say that QE has not caused inflation, I have to ask: what planet are you living on?

  36. No Longer Anonymous
    July 24, 2021

    It beggars belief that I even have to come here and ask for an opposition to E-scooters ?

    I and my whole family (of research chemists and trainee doctors) were nearly polaxed by one last week !!!

    1. a-tracy
      July 25, 2021

      You should live where I do the poor children on the local estate have electric bicycles that they wiz around the pavements on at rapid speeds, silently coming from behind as close to you as they dare like a game.

  37. No Longer Anonymous
    July 24, 2021

    In the media coverage of the mass illegal migration from France to Britain, a lot of reports seem to be based on a total misunderstanding of what is going on. When British vessels pick up these illegal migrants from boats supplied for their use by gangsters, they are not ‘rescuing’ them. They are helping them to make an unlawful entry into this country. This is exactly what the gangsters intend, and we do what they want us to do.

    The word ‘rescue’ should be reserved for people who, through no fault of their own, have got into difficulties at sea, thanks to unforeseeable events such as storm or wreck or collision. Such people do not mind in the slightest where they are brought to land, as all they seek is safety.

    People who deliberately set out into congested, deep water in boats unfit for that purpose, and who would angrily object if they were taken back to their point of origin, have not been ‘rescued’ when they are helped to arrive in Britain.

    I have no doubt that what I have written here will be distorted and misquoted, by the way. But I thought it was necessary to say it.

    Incidentally, apart from these migrants, is anyone else fleeing France at the moment? I would be interested to know who they are and what their grievances are.

  38. Al
    July 25, 2021

    Fascinating to note that while UK consumers are still barred from using digital currency by banks including Barclays and NatWest, the UK government is proposing ‘Britcoin’ a digital currency for the Bank of England.

    Rather entertainingly Britcoin is an existing digital currency which has been established since 2015 or so, so this appears to be another example of Rishi Sunak not doing his research and general government unfamilarity with crypto.

    As this is apparently meant to allow the government to put money straight into accounts, this is not going to help with inflation, and will simply cause tax and welfare problems unless they are specifically going to exclude such payments from being included in those calculations. Also as a non-decentralised crypto with no independently audited blockchain, this proposal has no real advantage to the user over fiat, though the government will obviously love traceability.

    1. MiC
      July 25, 2021

      It’s interesting, that when the news broke, that the UK authorities had seized £190 million in bitcoin -as part of a swoop on money laundering – the value of that cryptocurrency plunged by about 10%.

      I think that this speaks volumes, about upon what the main interest in cryptocurrencies centres.

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