by Mike Newland.
The fact that government all over has engaged in an orgy of borrowing for short-term political purposes is not news. Anything to stay in power. Anything to bribe the public into handing over a vote.
But, of course, all the regimes maintain that the borrowing is temporary and will stabilise the economy. Soon debt levels will decline on the measure which really matters – the ratio of debt to national income. We will sail on calmly the storm having subsided.
George Osborne tells us so – although the actual date when this will be achieved tends to slip forward in time.
The International Monetary Fund has now spoilt the party by publishing a paper about dealing with debt which spells out a very different message. It says that state debt levels in developed countries are now so great that countries will likely end up simply writing-off a chunk of their debt. In other words, one fine day they will announce either that they will not be paying-up or that there will be a ‘one off’ tax on wealth the ordinary citizen owns.
The IMF suggests that for the Eurozone countries – which are in a particularly bad hole – what will be necessary is a wealth tax of 10%. It also helpfully reminds that past attempts to deal with debt have often been inadequate because people saw it coming and moved their money. A wealth tax needs to be sprung on the poor citizens out of the blue after politicians swear blind they would never do any such thing. You have been warned!
What makes all this so galling is that the mess was not caused by a natural disaster or war. It’s entirely because politicians ran things solely for their own short-term benefit.
The political line about sailing on through the storm until growth resumes, which is employed by the likes of Osborne among many others, in reality hides not paying-up in more subtle ways known as ‘financial repression’.
This comes in a multitude of flavours. Plain vanilla is simply to create inflation by printing money. The government debt gets repaid but in devalued cash. Another popular flavour is forcing pension funds (that’s ordinary people) to buy government debt on which they end up losing money. Another currently in use in Britain is artificially low interest rates. Government cuts its costs by cutting returns to savers.
As window dressing, financial repression is supplemented by tax rises and by minor overall cuts in expenditure to please markets which government is happy to see presented as ‘heartless austerity’. A trick of the trade is to speak of the unthinkability of direct confiscation of people’s savings because it would destroy the credibility won by years of hardship. Sounds convincing does it not!
The IMF argues that many developed countries are fooling themselves that things can be put straight by the above mix of growth, ‘austerity’ and financial repression. The scale of the problem is too bad.
Direct confiscation of savings will happen in many countries. Seizing your pension money will be tempting. When you least expect it.
No one in government or seeking a mainstream political career will tell you the truth.
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Direct confiscation has already taken place in the EU and legislation introduced so that it can be enacted anywhere within that area. It’s known as a bail-in as opposed to a bail-out. Bondholders in Cyprus banks and depositors with more than 100,000 euros in their accounts were forced to write-off a portion of their holdings. In other words a proportion of their assets were seized and there is, as far as I am aware, no reason why bail-ins can’t be employed here in Britain should our banks teeter on the brink of insolvency. It’s not just in casinos that the house always wins.
The Cyprus bail-in concerned the debts of a private business. The IMF discussion is about the direct debts of government.
The two things have often been recently confused because government has effectively taken over some of the debts of private firms ‘too big to fail’.
This article should alarm anyone who has worked hard and saved for the future. Either through shrewd investment or simply putting aside savings, while making personal sacrifices. Not to mention those who have paid in, throughout their working lives, to pensions with the hope of one day retiring and having enough money to even simply get by. To Nationalists it is without any doubt whatsoever that successive governments in Britain have mismanaged our economy on a truly colossal scale. This is inevitable from the standpoint of the fact that we have been run by those who have believed in global capitalist economics for so long.
The only chance for any true prosperity for the ordinary people of Britain is for our nation to replace those extremely poor Lib/Lab/Con MP’s who have mismanaged our national affairs for so long with Democratic Nationalists who would have a very, very different approach to running our nations finances.
Sorry Geoff, since the 1980s the constituency party members no longer select candidates to stand for their seats. The City financiers and their cronies controlling globalist corporations have bought up, bribed, extorted and blackmailed the big parties, and THEY effectively select all the key MPs.
Just quickly research the mega-moneymen ‘sponsoring’ Blair, Brown and Cameron. Follow the £££! MPs no longer need mass members, just about 20 activists per constituency, to answer the phones and provide some legitimacy at the count.
State/taxpayer funding of parties would help small parties like us but the LibLabContrick would never allow it, or would rig it to keep Nationalists out – the only real opposition.
“MPs no longer need mass members, just about 20 activists per constituency, to answer the phones and provide some legitimacy at the count.”
You have obviously never stood in an election, Longshanks. I was always surprised by just how many party activists the big three parties are able to muster, even for local council elections. I kid you not, but all three had hundreds. It always made me wonder what hope we had against them when it was so very difficult just to get other party members to come to meetings, let alone help with elections.
That’s when they bus them in from all over in by-elections. They can’t do it from locals any more. MPs regularly complain that they have to go out canvassing with just one or two people. Why they’ve turned to telephone canvassing.
They also pay people to work for them.
All the big parties have a dearth of activists. What has actually happened is that the playing field has been leveled so that small parties can compete more easily now – provided you have a few people you can do fine.
The web has helped enormously too. Web sites of big parties are the same size on the screen as small ones!
Governments have been stealing our savings for generations. It’s called inflation. The new idea is more open, in that one could see their savings drop by 10 % overnight.
But those savings any of us do have reduce in value on a daily basis. And Mr Newland is correct. Those who are part of the global elites will convert their assets before any IMF directions. Probably because the global elites and The IMF are one and the same.
This idea of ‘bail-ins’ may work in the short term, but it begs the question, what are TPTB going to do next time? There will be a next time, no doubt of that. In the meantime, a colossal collapse of confidence in the banking system will have occurred among the public with mattresses and holes in the ground being next best options. Confidence in government will ooze away for allowing it to happen.
So, what’re they goin’ t’do next? What’re they goin’ t’do next?
Typo in the first sentence – in an orgy.
Thank you. We rely on our readers to keep us on our toes!
Roosevelt confiscated the USA’s privately held gold in 1933, in a move calculated to produce inflation as a counter to deflationary pressures, much like QE today. It is now parked in Fort Knox.
Private gold was traded for certificates which were devalued just as soon as the gold price was raised against the dollar, which was of course possible because it was no longer on the Gold Standard. This was straight forward robbery of private property by the State – something that even now seems inconceivable in ‘The Land of the Free’
It just shows that when a country’s finances are in a hole because the politicians have fouled up, anything, anything at all, is possible.
The gangsters in government undertake illegal wars, flood our country with millions (without asking the people), and destroy our industries. Committing grand larceny on our bank accounts is small beer compared to their ongoing nefarious activities.
In the IMF report of early 2013, page 49, it was suggested that governments around the world impose “a capital levy tax” of 10% in order to “establish debt sustainability.”
Even more alarming, the IMF asked governments to act swiftly so nobody can escape this wealth confiscation scheme.