Trade gap widens

The trade numbers for December last year are out. Turns out we exported lots of services during the month but imported a greater value of goods. Specifically:

Services: +£4.0bn
Goods: -£7.3bn
Balance: -£3.3bn

That is, we were £3.3bn in the red. Here's a graphical representation of our trade balance over the last couple of decades:


So as you can see, services, ie the City, are generally positive but we alway have a net outflow of wealth thanks to our habit of buying foreign goods, starting with 40% of the food we eat.

We haven't actually had a genuine sustained positive trade balance since the early 1980s.

ONS

Commander Ali Dizaei goes down

Meet Metropolitan Police Commander Ali Dizaei, at this moment in time one of the most senior police officers in the United Kingdom, although that won't be for long since he has just been sentenced to two years in jail for assault and false arrest.

Cmdr Ali Dizaei: Jailbird
Dizaei's rank puts him just a couple of rungs below the Commissioner of the Metropolitan Police - the UK's top cop. It's really quite amazing that he has reached such a lofty position considering he is of Iranian origin, speaks broken English and has spent most of the last ten years being investigated for, on suspension pending trial for, or actually on trial for, a range of offences such as misuse of a police credit card, perverting the course of justice, misconduct in public office and making false expense claims. Until yesterday he had never been found guilty of any of these allegations.

He is said to be a close friend of an officer we have met before on this blog...

Assistant Commissioner Tarique Ghaffur: Friend of Dizaei
Back in June 2008 A. C. Ghaffur accused his own force of racism against him and his own boss, the Met Commissioner, of various iniquities including not renewing his contract and sidelining him. He launched a court case for compensation.

By November Ghaffur had withdrawn the worst of his allegations, the court case was off, but he had received an undisclosed financial "compensation" thought to be around £800,000.

These two officers seem to be two of kind: professional ethnics riding high on political correctness who see racism under every bush and have been promoted way about their ability level by screeching loudly and causing top brass to become fearful of appearing to discriminate.

The police forces of our land are now riddled with Orwellian Nu-Think. Diversity courses are compulsory for officers of all ranks and the simple catching of criminals of yesteryear has given way to box ticking faddy self-abasement to the PC culture.

Promotion is no-longer based on thief-taking or even time served. Rather the ambitious officer must compile a dossier of evidence that he has reached out to the community; pandered to minority interests, and performed extensive metaphorical auto-flagellation for having dared don a uniform and tried to serve and protect the rest of us.

And in this climate the conforming mediocrities have clambered over the good officers, and the likes of Dizaei and Ghaffur have reached the top.

BBC: Profile of Ali Dizaei
BBC: Report
BBC: Recording of 999 call

Inflation lurks as QE ends

The Office of National Statistics has just published it's January Statistical Bulletin. (Here, if you're interested.)

Consider the following phrase from the report:

The input price index for materials and fuels purchased by manufacturing industry rose 8.4 percent in the year to January.

If input prices are going up at 8.4 percent a year, how long before output prices, ie the prices in the shops, are doing the same? The first must feed through to the second in fairly short order. Of course, the cost of goods is more than just the cost of material and fuel - there are wages, rents, taxes and such to pay. But it's not like rents and taxes are going down. There is some scope for reducing the wage bill. Everyday seems to bring more mass-layoffs. However most of the rise in input prices is coming our way shortly.

The Bank of England has said it will not QE anymore for now. That's good, but frankly it looks like it really needs to be tightening monetary policy. Yesterday's interest rate decision was: hold at 0.5%, which doesn't seem to be addressing the issue of incipient inflation.

UK economy out of recession (not!)

They're saying we're out of recession. Yes, our economy grew by +0.1% in the last quarter of 2009! Of course they were expecting it to grow by +0.4% so it's not time for total euphoria, but still growth is growth, isn't it?

Well, firstly, how much exactly is +0.1% of quarterly GDP? It's about £350 million. And over the same period the government pumped almost £50 billion of quantatively eased "printed" money into the economy. They also subsidised new car sales by £1,000 a pop and galvanised shoppers with the (then) impending VAT rise from 15% to 17.5% - now a done deal of course. Also there was Christmas. Sometimes that has been known to add a little to people's spending.

So the £350m "growth" is statistically insignificant and dwarfed by other factors in the economy. The government has its "good news" story of the day, but really this is nothing to be proud of.

BBC

BNP to seal ballot boxes

The BNP has decided it will exercise its right to seal under the Ballot Act of 1872. This allows candidates to put their own seals on ballot boxes. In certain key constituencies the Party's agent will affix a seal immediately the polls close at the general election.

Why? Because this:

Three Labour councillors in Birmingham were caught operating a "vote-rigging factory", an Election Court has heard. Police found the trio handling unsealed postal ballots in a deserted warehouse in the city during a late-night raid in June 2004, the hearing was told. Link.

Check out the consprators in this case:


They are Muhammad Afzal, Mohammed Islam and Mohammed Kazi.

On learning that the BNP intended to seal the ballot boxes a Labour spokesman said: "We are confident that when the general election comes the British people will clearly reject the disgusting politics of the BNP. That will be because their politics are vile and divisive not because of any bizarre paranoia about ballot boxes."

Unfortunately the spokesman did not go on to say, "And we promise not to rig any more elections."

Blanchflower and King disagree

Yesterday, Mervyn King, Governor of the Bank of England and Chairman of its Monetary Policy Committee said in a speech at Exeter University, "a key element in raising the national saving rate is the elimination over time of the structural deficit in the public finances," which is his way of telling the government to stop spending so much of other people's money.

Meanwhile, Prof David Blanchflower, member of the MPC from June 2006 to May 2009, has said the MPC should be disbanded because it is not fit for purpose. He went on to say that cutting spending in a recession would create another "dip".

So one wants to cut spending and other wants to maintain it. Who is right?

Well, it seems to this blog that Blanchflower is living in a fantasy land. Yes, if during the boom times the government had built up a cash pile - put money aside for a rainy day - then spending it now to mitigate the effects of the recession would be a good idea. But the government didn't build up reserves during the good times, it just spent all the money it had and more besides. So the only way to keep public sector spending up now is to sell gilts and print money to buy those bonds in a circular operation with investment banks which provides a tiny fig leaf of cover to prevent the world from noticing that the currency is being debauched.

King at least wants to take the first steps towards getting out of our present economic hole. Blanchflower wants to keep digging. Of course, cutting spending will deepen the recession but it will also shorten it. Blanchflower would take us on a shallow dive to perdition while King would take the medicine now and get it over with.

King
Blanchflower

Inflation is back

The inflation numbers for December (2009) are out...

CPI: 2.9%, up from 1.9% the previous month.
RPI: 2.4%, up from 0.3%.

So CPI is a whisker under the letter-writing 3.0% level and is the largest ever increase in the annual rate between two months. This is due to a couple of benign factors dropping out the back-end of the index: an oil price drop in late 2008, and the VAT rate reduction.

Now here's a truely horrific number...

RPIX: 3.8%, up from 2.7% in November.

RPIX is RPI excluding mortgage costs, ie, it's the real inflation rate when you disregard the government's manipulation of the housing situation.

And remember, the Jan 1st increase in the VAT rate isn't even in these figures yet!

ONS