Tuesday, 31 March 2009

External debt from the CIA world fact book

If you click the link below it gives every country in the world ordered by their external debts.


The definition of external debt is given as follows:

This entry gives the total public and private debt owed to nonresidents repayable in foreign currency, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.

This means external debt is not repayable by printing money.

Monday, 30 March 2009

World currency

The G20 meet in London this week.

In all probability nothing much will emerge from the meeting except hot air.


There's a tiny possibility they may actually produce a "world currency" composed of a basket of major currencies including the US dollar, euro, yen, yuan, rouble and maybe gold. It would be administered by the IMF. The idea seems to be being kicked around by various finance ministers.

That would be major if it happen. It would be step one on the path to abolition of national currencies, although like the euro (previously called the ECU) this new currency would exist "on paper" as an accounting unit years before you could actually hold one.

But, it probably won't happen.

Credit crunch hits Spanish bank

Spain has been suffering from the world's economic problems since 2007. Their construction industry has stalled; they have vastly over-built holiday apartments leaving investors with depreciating assets and the tourist industry which accounted for 25 percent of their GDP has taken a hit.

But until now their banks were sound. This is because the Spanish regulators forced them to keep their debts on their balance sheets rather converting it to toxic waste. Until now. For the first time we see a bank failure as the state has taken over Caja Castilla-La Mancha after efforts to choreograph its purchase by a rival lender failed.

The Bank of Spain said yesterday it has appointed administrators to run the savings bank after removing its board. As part of the rescue, the government has pledged to guarantee as much as 9 billion euros ($12 billion) of the lender’s liabilities. (Source)

The big question is: Is this a one-off or the first emerging tip of a systemic iceberg. And the reason this is important is because of Banco Santander.

Banco Santander has over the last couple of years used its healthy balance sheet, and some pull with the UK government, to acquire a large swathe of the British retail banking sector. They own:

Abbey National
Alliance & Leicester
Bradford and Bingley

And they also acquired the Dutch bank ABN AMRO after a hard-fought battle with Barclays. (Which now they must be wishing they'd lost!)

If Banco Santander fails all those rescues fail as well and there's no way the UK government could stand back and watch that happen.

Friday, 27 March 2009

Nick Griffin on Churchill on Islam

Watch this video..

Nick Griffin speaks on Winston Churchill from BNPtv on Vimeo.

He's right, isn't he? Winston Churchill alive today would have to be a member of the BNP.

Police arrest 50 muslim paedophile suspects

Finally the dam seems to be bursting on the whole issue of muslims grooming underage white girls for sex and to work in prostitution. This is endemic across various northern cities and it's an utter scandal that it has been allowed to continue for so many years.

There has been a major operation in Rotherham with 50 arrests so far. However there seems to be a mainstream media black out at the moment. (To be fair this may be to avoid alerting others due to be arrested; it would be all too easy for the suspects to decamp to Pakistan and never be seen again.)

More here:


The British National Party has been supporting the victims and their families and trying to force the police to act.

This BBC article describes one girl's experiences - although being the BBC they never mention that the victims are almost always white and the groomers almost always Asian muslims in this kind of organised exploitation.

(Swedish link)

Thursday, 26 March 2009

Bond auction failed, IMF?

Yesterday the UK government tried to raise £1.75bn to cover current expenditure by selling 40-year bonds (gilts) and failed. Buyers took £1.63bn and left a shortfall of £120 million.

Since the shortfall amounts to about half-an-hour's spending by our prodigal government this isn't too dramatic so far.

The question is: is this a one-off or is UK debt no-longer sellable? If the latter then we've got big problems.

There are plenty of things the government can do at the moment to fix the problem. They could sell shorter term debt, eg 10yr bonds; generally the shorter the term the less risk the buyer is taking and so the more acceptable the offering. Or they could raise interest rates. That would be a good thing to do since Tuesday's numbers show that the inflation monster has risen from its coffin and is once again sucking blood from the economy. The Bank of England will be setting a new base rate in a couple of weeks (on the 9th April) so that's their opportunity.

And if none of that works, there's always the IMF.


Tuesday, 24 March 2009

Inflation numbers for February are out - gulp!

The BoE this morning published last month's inflation numbers:

CPI was 3.2%, up from 3.0% in January
RPI was 0%, down from 0.1% in January

That's right, CPI has gone up! And they've only just started the inflationary money printing - CPI was supposed to go down this month! We're supposed to be fighting a terrible deflationary collapse but the Consumer Prices Index, the index the government claims to be targeting, is nowhere near its target and is headed in the wrong direction.

The BoE governor, Mervyn King, has written his usual letter of apology to the Chancellor of the Exchequer. Read it here. Actually I'll save you the bother: he says sterling has fallen 28% since Summer '07 and we import loads of stuff so what did you expect? All the imports have gotten more expensive.

Well, I for one expected this supposedly clever man to know that dropping interest rates onto the floor would knock the legs from under the pound and push up prices.

Oh, and in case anyone thinks RPI at zero percent is somehow a good thing - let's have a little peek behind the numbers shall we? There are two major reasons RPI is low, 1) low mortgage rates due to the interest rate being low, currently 0.5%, and 2) oil having dropped from $140 per barrel to the current $50 approx.

Both these things happened last year and within a few months will be dropping out of the back end of the year-on-year index, and what will the index do then? Well, unless he's nailed some of the real inflation by then, the food prices hikes for example, RPI will shoot up to join CPI. If you exclude mortgage interest payments RPI was actually 2.5% last month!

Now let's have a look at how that government mouthpiece, the BBC, tried to spin this bad news.

Here's their first take...

And here's the rewrite after the blogosphere went incandescent with rage at the blatant attempt to conceal bad news...

Both articles had the same URL. (Click on the images to enlarge them.)

Monday, 23 March 2009

Coming attractions: G20 and UK budget 2009

In a couple of weeks the G-20 will be meeting in London, starting on April 2nd. The G-20 comprises the following nations:

South Korea
Saudi Arabia
South Africa
United Kingdom
United States

Yes, there really are only 19 members in the G-20! There are also three institutional members:

European Central Bank
International Monetary Fund
World Bank

The finance ministers and central bank governors of all these nations will meet in London and solve all the world's problems! Alright, kidding, they'll eat a lot of canapes and produce a lot of hot air.

Then on April 22nd Alistair Darling will present the UK budget for 2009/2010. This will be an opportunity to see some official numbers showing just how badly he has messed up. I can't wait.

It's a bit weird though. The UK's financial year starts on April 6th (due to calendar changes centuries ago) so the budget is usually in March. Darling will be proposing to parliament expenditure that has already started.

And if you can't wait for all that, well, tomorrow we'll see last month's official inflation numbers. Would it surprise you to know I think they will be above target?

UK population should be 30 million

That's according to the Optimum Population Trust.

JONATHON PORRITT, one of Gordon Brown’s leading green advisers, is to warn that Britain must drastically reduce its population if it is to build a sustainable society. (Link)

The current population is usually quoted as about 60 million - ie, almost double the number we can actually feed. The "carrying capacity" of these islands is only 30 million people. We actually have a population density twice that of China!

However the real population may be higher still since this number doesn't correctly include the vast immigration since the last census in 2001. Food consumption statistics from the grocery supermarkets tend to indicate a population closer to 70 million already.

But if it ever falls below 30 million we should definitely see about getting some immigrants to settle here.

Monday, 16 March 2009

BNP member attacked with hammer

From the BBC:

A British National Party (BNP) member was attacked with a hammer when protesters arrived at a campaign event in Greater Manchester.

Violence broke out as 30 people surrounded a BNP vehicle outside the Ellesmere Pub in St Helens Road in Leigh on Friday evening, said police.

Tony Ward, 48, was hit with a hammer and later treated in hospital.

A 25-year-old man arrested on suspicion of causing grievous bodily harm has since been given police bail.

A careful reading of the BBC's article won't tell you the whole truth about what actually happened. The BNP Chronical is more informative:

It has now been confirmed that Mr Ward was indeed struck with a claw hammer, rendering him unconscious. He received eleven stitches at the nearest hospital after being dragged to safety by fellow activist Andrew Tierney.

“If the Labour Party thinks they can break us with their street thugs, they are wrong,” Mr Ward told BNP News. “We are back, stronger than ever before, and we will not stop until we have rescued this country from the immigration invasion and Islamification nightmare to which the Tories and Labour have subjected us” said Tony Ward.

According to one of the barmaids at the Ellesmere pub where the event was held, members were also subjected to having abuse hurled at them whilst the meeting went ahead she said: "There were a few sat in the corner yelling things like 'Germans' and 'Nazis' at the peaceful lot at the meeting".

One black male [has been] arrested.

This blog has received information that the other 30-40 "antis" were also ethnics.

Edited to add:
Click on this image to see how the violence was organised.

Another edit:
Here's a video of BNP Chairman Nick Griffin explaining what happened that night.

More price controls on booze

A few posts back I commented on the proposal to introduce minimum prices on alcohol in Scotland. It hasn't taken long for this suggestion to drift south of the border. Sir Liam Donaldson, the Chief Medical Officer for England, wants a 50p per unit minimum. (link)

The first thing I notice is 10p inflation - the Scottish proposal was for 40p per unit.

Sir Liam's proposal would make a bottle of wine (75cl) cost £4.50 minimum, a six pack of beer £6.00.

My feeling is that if it's good for the Scots then it's good for the English. In England it is estimated that 3,400 lives per year would be saved; there would be 46,000 fewer crimes committed, and 100,000 fewer hospital admissions.

On the downside the higher 50p tariff would impact more than half of all drinkers whereas the Scottish proposal would only have hit ten percent of them. The big difference is because the 40p to 50p per unit window is where most booze is priced. For example the average cost of a bottle of wine is about £4.00 or just under. So, while in Scotland the discerning drinker would not have been affected in the slightest by the proposal in England they may just be. It's around £4.50 to £5.00 that you start to find bottles of wine that are actually drinkable. (To be on the safe side you should really aim to spend more than £5.00 - however, don't spend more than £15, you'd be wasting your money, except on champagne of course.)

There seems to be two strands of opinion against price controls: those who are against because they think it's a tax-raising measure, and those who are against because it would increase their costs and they are sensible drinkers.

The first group have misunderstood the proposal. Taxes on booze would not increase. Retailers would simply not be allowed to sell for less than the prescribed minimum. In fact tax yield to the exchequer would fall while profit-per-unit for the retailer would increase. (The tax fall is just one reason the government is unlikely to accept the proposal.) A desirable side effect is that manufacturers, no longer legally able to compete on price, would have to compete on quality instead.

The second group has a fair point, however they should bear in mind that their taxes are already paying for the general legal and medical mopping-up of binge drinkers. The police, court, ambulance and hospital time lost to drink is monumental. But it is fair to say that a non-taxpaying sensible consumer of cheap booze, for example a student, would be worse off under these proposals.

To which I say - tough! (I'm a tax-payer.)

And anyway, at least in England it's very unlikely that these proposals will become law. Our government is addicted to taxes worse than any alcoholic and a tax-take fall would be anathema to them. They would prefer to increase taxation on booze, despite the fact this makes high quality, expensive tipples even more expensive for no good reason.

And finally it's worth remembering that in France a bottle of decent wine costs £1.50 and they don't have a binge drinking problem. Why is that I wonder?

Wednesday, 11 March 2009

Quant easing and the last nail in the coffin

So, a few hours ago the Bank of England started the initial pump of £2bn of "printed" money into the marketplace. Early indications are that only banks took up the offer to exchange gilts and other paper for cash.

Over the next three months the BoE intends to churn out the rest of the £75bn, and then after that another £75bn "if necessary".

The purpose of this post is to point out that we haven't quite reached the monetary nadir. So far the BoE has bought gilts, that is government bonds, from the "secondary" market, ie the banks who bought them as a form of long term saving. (A gilt typically yields 5% unlike cash savings which return closer to 0.5%.)

This operation doesn't give the UK government more money it can spend. Not until the BoE starts buying gilts directly from the Treasury can we say the dog is really eating its own vomit and the government's day to day spending is being financed by creating money. Given the decimation of the tax base and the government's reluctance to adopt any form of fiscal rectitude that day of ultimate humiliation may not be far off.

Public turns on Muslim scum

We are all used to seeing Muslim protests on our TV screens; it doesn't take much to set them off and out they come, scruffy, bearded, robe-wearing Muslims chanting "Allah Akbar" and holding banners proclaiming Muslim aphorisms like "Behead the Unbelievers" and other such nice things. Another favourite chant is, "Bomb, bomb, USA! Bomb, bomb, UK!"

Yesterday 200 men of the Royal Anglian Regiment held their homecoming parade through the streets of Luton, arriving eventually at the town hall. They were cheered through the streets by a large crowd of well-wishers, some holding up banners thanking them for their work in Basra keeping the Iraqis from each other's throats.

There was also a small contingent of Muslims with a contrarian viewpoint...

So far, nothing to write home about.

But this time it was different; the crowd turned on the Muslims. The charge was led by a septuagenarian and others followed. The police had to back the Muslims into an alleyway and protect them from the outrage of ordinary British folk.

Here is some video footage:


Bear in mind the BBC has slightly censored what actually happened; eye-witnesses reporting to this blog have said there was a considerable struggle to get at the Muslims - whom the BBC refer to in all coverage as "anti-war protesters" which is true but entirely misses the point.

So this is the new thing. Previously the British public was supine in the face of outrageous Muslim provocation. Yesterday that changed.

See also:
Daily Mail article
Luton Today article and video

Monday, 9 March 2009

Northern Ireland situation

So let's just summarise the history of Northern Ireland over the last ten years.

All the terrorists that previous governments had managed to catch and convict have been given amnesties and let out of jail. Their former apologists have become members of the government. The army presence has been scaled down from 30,000 soldiers to 5,000. The checkpoints and watchtowers have been pulled down and taken away. The RUC (Royal Ulster Constabulary) has been wound up and replaced by the Northern Ireland Police Service - the only police force in the country afraid to wear royal insignia. Meanwhile the IRA's massive arsenal of weaponry has been "put beyond use", which the British government chose to regard as much the same as surrendering the weapons.

Then on the evening of Saturday last (March 7th, 2009) the IRA attacked Massereene Barracks and killed two members of 38 Royal Engineers regiment, and wounded two others. Two pizza delivery persons were also injured, one very badly.

There seems to be some doubt as to whether the attack was by the "Real IRA" or the "Continuity IRA" or some other IRA-like group.

But there can be no doubt that letting them out of jail was a bad idea.

Cost of EU membership

The Taxpayers' Alliance has done its sums and calculated that EU membership is costing Great Britain £120bn per year. (Link)

Let's put that into context. It's three-and-a-half times our defense budget, or one-and-a-fifth times our health budget (and the NHS is the largest employer in Europe) or two-and-a-half times the education budget. In terms of public spending only the social security budget at £146.5bn is larger than our EU membership cost.

Is the EU really worth it?

Friday, 6 March 2009

Quantatitive easing in numbers

Or to put it another way, the government is proposing to buy approximately 85% of the commercial paper market and 10% of its own debt.

That's quite a big intervention.

Thursday, 5 March 2009

Thar she blows!

That's a whale-hunting expression, when you've been at sea for weeks or months in a leaky wooden ship and suddenly you spot the sign you've been seeking - a whale's spout. Result! You're in the money. (Obviously we don't hunt whales anymore - that would be bad!)

Well, we've been waiting for the UK government to crack and start printing new sterling banknotes, and today it happened. The Bank of England has in the last few minutes announced that it is reducing the base rate to 0.5% and is starting a print run of £75 billion. They will use the new money, as soon as the ink is dry, to buy UK gilts on the secondary market and commercial paper. (BoE link)

Given that the pound in your pocket derives its value from its scarcity and pounds are now slightly less rare, the pound in your pocket has shrunk slightly in value. The UK money supply (M4, broad money) is approximately £2 trillion - so today's printing amounts to a devaluation of around 3.75%. The pound in your pocket is now worth 96.25p. Of course, everyone else's pounds have also shrunk so you may not notice too serious an effect on your spending power, at least not for a few months anyway.

Anyway, the ink isn't dry on these new notes yet, the BoE will be bleeding them into the system over the next 3 months.

So what will happen to these new pounds?

Well the government would like the retail banks to lend them to members of the public so that they can trot along to their local retail outlets and start doing some spending. Also the government would like people to borrow the money and buy houses with it. Unfortunately house prices are falling so fast that the average house has now reverted to its 2004 value, and the usual spring bounce has just flopped, according to today's Halifax numbers (though they're called HBOS now.)

So in fact these new pounds will go chasing some higher rate of interest somewhere. How about Norway? They have a base rate of 4.75% at the moment. Why not borrow some "new" sterling at 0.5%, sell to buy kroner and deposit in Norway? If enough people do this the kroner will soar (currently £1 buys you about 10 "NOK") and sterling will crash, so there will be money to be made on the margin and on the forex rates. I haven't heard the term sterling carry trade yet - but it might be coming.

Wednesday, 4 March 2009

Bonus replacement has started

Reports have reached this blog that, as predicted in a previous post, bonus replacement has started.

Branch-level staff at RBS are being given pay rises to offset the monthly bonuses they used to receive, which were based on their selling a certain quota of financial "products" - as banks like to call their services.

These staff are poorly paid, at least by white-collar standards, and some would actually be earning less than the minimum wage if their bonus hadn't been replaced with a pay rise.

So fair enough, I think.

Tuesday, 3 March 2009

Price controls on booze

The Scottish government is contemplating price controls on alcoholic drinks. Unlike most price controls around the world these will be intended to keep prices up rather than down. The figure being mooted is 40p per unit of alcohol - this means it will cost £1.20 to go over the drink-drive limit.

The motivation is to reduce the ever growing hospital case load, ease the pressure on the police and courts from drunk and disorderly or incapable persons (these are two distinct crimes; being drunk by itself isn't a crime at all in the UK) and reduce alcohol-related school and work absenteeism. These have all gone off the scale in recent years due to retailers using 'special deals' on booze to gain market share; drink is now easily affordable even by children.

The trouble is the Scottish government doesn't actually have the power to impose price controls, and if they enacted legislation to give themselves such a power they would be dragged through every court in the land by those who think it's their inalienable right to get paralytically inebriated and lie puking in the gutter before being scooped up and cosseted at the taxpayers' expense.

But if they can pass such a law and make it stick it sounds like a brilliant idea. Even a modest fall in consumption is expected to reduced sick days by a million, hospital admissions by several thousand and court cases by several hundred. The retailers are bleating about their sales but by and large what they lose in volume they will regain in the profit margin.

And of course the 40p floor will only really affect the cost of the roughest ciders and maybe some lager. The new law will not have the slightest affect on anyone with any discernment in what they drink - so I'm all in favour.