Thursday, 29 September 2011

Barroso wants to impose transaction tax

It had to happen sooner or later. In fact it was predicted in this very blog months ago. The EU, in the form of Commission President José Manuel Barroso, has decided the best way to solve the internal contradictions of economic union, is to have even more economic union, oh, and a new tax.

Let's start with the tax. Barroso wants to skim 0.05% off every bank to bank transaction in Europe. He thinks this will help solve the problem of Greece being about to crash out of the euro. Or least, he implies it might. This tax (sometimes known as a Tobin Tax) would provide a big cash pile that could be used to bail out banks and countries when it all goes tits up. (The original Tobin Tax was only to be applied to foreign exchange conversions - Barroso wants to tax all transactions.)

Hmm... a big cash pile? A big cash pile doubtless to be collected and administered by the EU itself; and doled out by the EU to its friends and supporters. You can see why Barroso would want such a thing. Some people reckon this tax could raise as much as €50bn a year; enough to give a commission president sweaty palms just thinking about it.

Some of that money would sadly be coming out of yours and mine pockets in the form of higher banking charges. But on the plus side, some would also be coming out of bankers' bonuses and bank profits. So, not all bad then.

The tax would put paid to a devious practice of the big investment banks - high speed trading (HST). In HST the bank, using "co-located" computers, ie computers it has paid to have hosted in a stock exchange's own computer room so that they can talk extremely fast to the SE's own computers, intervenes in every transaction. For example if you decide to buy some Sainsbury's shares and tell your broker to buy 1000 shares "at best" but not paying more than £3 per share you will find that a high speed trader suddenly bids the price up to £3 just long enough for you to have to pay the maximum you were willing to go to. They do this by trading thousands of times for your one and discovering your price limit and corralling the whole market for a millisecond or two. They might buy and sell a million Sainsbury shares just to make sure you pay £3 rather than £2.90 for yours. But a tax on each transaction would spoil their fun. Suddenly their thousand trades would be costing them a lot of money.

There has been speculation that a financial transaction tax (FTT) would drive business offshore. Probably not much: the ordinary Joe Public punter wouldn't be much affected, and the parasitic banks need to be close to the public in order to prey on them. Some business might move from London to New York - large deals where the FTT starts to add up to a big number.

Barroso's other big idea is deeper economic union. By this he means the EU should be running the economies of member states, because obviously they're not competent to do it themselves. This means member state treasury departments would have to clear all spending with the EU beforehand, and of course, all borrowing as well. Our democracy would degenerate into an elected civil service - chosen by the people but taking their orders from Brussels.

However, since the UK isn't in the euro, it's unlikely the FTT or the further economic union will ever apply to us. If the rest of Europe wants it, let them have it.

Wednesday, 28 September 2011

Gypsy problems in Bulgaria

It seems it's not only us who have "traveller" issues. Near the Bulgarian second city of Plovdiv conflict on the scale of a small war had broken out. The Gypsy "King" Kiro had someone killed and next thing you know 3,000 outraged local residents have marched on his house and tried to run him out of town.

Violence against gypsies then spread to other cities. The prime minister Georgi Parvanov deployed special police units and there have been 120 arrests.

This makes our problems at Dale Farm look small beer in comparison.

Perhaps the most interesting thing about all this is that our mainstream media isn't reporting it at all. To learn more you will have to visit Pravda.

Thursday, 22 September 2011

Twist and shout

The yanks have a cunning plan. It's called Operation Twist. They will sell $400bn worth of short-term gilts and use the money to buy the same value in long-term bonds.

The thing to remember about bonds is the yield goes up when the price comes down, and vice-versa. So when they buy the long-term bonds this will cause a price increase, hence a yield fall.

So what they are going is making long-term interest rates lower, at the cost of making short-term interest rates higher. Apparently short-term money is plenty cheap enough, but they want firms to have access to some long-term cheap money because investing in growth is a long-term thing.

I suppose it will work, a bit.

Of course when the short-term bonds they've sold mature they'll have to sell the long-term bonds to fund redeeming them and the whole operation will reverse itself. But at least it's cash neutral and so not inflationary.

The madness of QE2

It's coming... Yesterday's MPC minutes showed a nine-to-zero majority in favour of holding the base rate at its laughable 0.5%, and worse, hints that that their next move may be another round of quantitative easing.

The last round of QE in March 2009 involved printing £200 billion and injecting it into the UK economy. The net effect is thought to be 2% GDP growth. GDP is about £1.4 trillion per year so they "spent" 14% of GDP to gain a 2% boost. Of course it wasn't really "they" who did the spending, it was us - we are paying for the £200bn QE in the form of higher inflation. Money derives its value from its scarcity. Make it less scarce and it loses value. Every time you buy an inflated loaf of bread you're paying your share of that £200bn. You will be paying for many years to come; long after the QE boost has gone away.

And now they're thinking about doing it again.

Also revealed yesterday is the fact the government borrowed £13.8bn last month. That's two billion more than the same month last year. This from a government which claims to be cutting the deficit.

It must be admitted that the main problem for the exchequer last month was lower than expected income tax receipts, so they may be cutting spending, but the effect is to reduce the tax yield by more. We're in danger of falling into the Greek tax trap here - a vicious circle of cutting spending causing tax yield to fall thus requiring even more spending cuts.

Presumably the mega-brains in HM Treasury have seen the problem looming, and thus the urge to print has returned. The printed money would of course be used to finance government borrowing - indirectly by buying gilts on the open market. Unfortunately printing money is another trap. It's a quick dose of neat sugar. First the glucose high, followed by the need for even more to sustain our energy levels: QE causes price inflation, people can afford to buy less stuff, businesses suffer and employ fewer people. (Did I mention unemployment has just hit a recent high of 2.5 million?)

The right answer of course is to get inflation down. The whole aim of government economic policy should always be: non-inflationary growth. Growth at the price of inflation is not worth having. You feel good today but even worse tomorrow. And to get this non-inflationary growth they will need to raise the base rate - taking the pain on the chin - until inflation is squeezed out of the system and people's real, after-inflation, spending power starts to go up. Then businesses will find sales rising, revenues increasing, and will hire more people and the whole economy will splutter back into life.

But of course that does mean taking some short-term pain. And they've prevaricated for so long that the pain will be significant. A rise in base rates will cause more unemployment, a fall in house prices, and will suck in imported goods which will seem cheaper. But there is no real alternative. A Nationalist government could deal with the unemployment issue by removing immigrants. This government wouldn't of course. And if they keep hitting the sugar we'll find out what an economy in a diabetic coma looks like.

Thursday, 15 September 2011

Oil in the Falklands

Oil prospector Rockhopper has announced an interesting oil find in the Falkland Islands waters. They reckon they'll be able to extract $40bn worth of oil from under the sea.

Argentina is hopping mad. Their simple logic is: the Falklands (Malvinas) belong to them, therefore the oil also belongs to them. No British oil company should be digging it up.

And this is just a little, early-day find. There could be a vast amount more oil. The islands could be sitting on a trillion dollars worth of the stuff.

So one has to ask. Is this a good time for the UK to have no aircraft carriers at all capable of launching fighters?

Monday, 12 September 2011

Freedom go to hell; democracy go to hell

During yesterday's commemorations for the 9/11 victims outside the American Embassy the minute's silence was filled with chanting muslims. The following slogans can be discerned...

Freedom go to hell
Democracy go to hell
Down, down USA
USA, you will pay
The muslims are on their way
USA terror state

Watch a video from the Telegraph here. (The BBC don't seem to have covered it.)

Greece cannot survive

The Greek economy is effectively dead! Not legally dead, but effectively it's a gonner. Short-term Greek debt yields on the open market have just reached 100%. That means the cost of borrowing one million euros for the Greeks is: one million euros. That's the market's way of saying, "Don't bother asking."

The Greeks are still chowing down on bailout money from the EU, but this comes with strings attached. The Germans are demanding "Austerity". But the Greeks tried austerity, and they found that for every euro of spending they saved their economy shrank by enough to cut their tax base by a euro. So there was no gain.

They're like a man standing in quicksand with the Germans on the sidelines shouting, "Run!" But the man in quicksand knows that he's only sinking  slowly at the moment; if he were to start running he'd sink a lot faster and be dead a lot sooner.

So all that remains is for Germany to gather the relatives, make a short but moving speech, and pull the plug on Greece's life-support.

In this case "pulling the plug" means either Greece leaving the Eurozone, or having its sovereignty revoked and being run by Germans. It's a tough call which way the Germans will jump on this one. Either way though, the future for the average Greek on the street is penury.

Wednesday, 7 September 2011

NS&I have pulled their savings certificates

Boo hoo! Savers across the UK are in mourning. The only savings account that actually kept up with inflation (ie was a savings account rather than a losings account) has closed. National Savings & Investments have stopped sales of their 5-year, RPI+0.5 pa, tax-free certificates. Yesterday you could have had £15,000 worth of these little treasures - today you can't.

Meanwhile bankers everywhere are celebrating. They hated NS&I for offering the saving public a good deal, alright, an adequate deal.

The deal has been pulled only four months after it was first offered. The two billion pounds the government wanted to raise has been raised. The rest of the £120bn deficit will come from gilts instead. The government seems to have decided that raising money this way will be cheaper for them.

Yes, paying 3.5% on gilts will be cheaper for the government over five years than paying RPI+0.5%. Can you work out what the government actually thinks is going to happen to inflation over the next five years? (As opposed to the "return to the 2% target over the next two years" mantra they normally chant.)

Monday, 5 September 2011

Police to commute in uniform

The Policy Exchange "think tank" has come up with the whizzy idea that police officers should commute to and from work in uniform. Apparently in London alone at least 2,000 officers are in mid-commute at peak times and they would provide more visible reassurance to the public and deterrence to wrong-doers if they travelled in uniform.

But even if we over-look the fact that people commuting are on their own time so can't sensibly be told how to dress, do we really want the consequences that wearing a uniform in personal time entails?

An officer leaves work; he's had a hard day, decides to have a pint in the local pub. Now you've an officer drinking in uniform. Decides he'll have a cigarette so pops outside. Now you've got an officer in uniform out in the street drinking and smoking. A friend calls him. Now he's outside drinking, smoking, and having an obviously personal call on his phone. A load of colleagues turn up; they also have a pint and smoke and raucous conversation ensues. Meanwhile the public walks past muttering disapprovingly at this gang of uniformed officers letting their hair down.

One of the officers decides he's a bit hot and opens his jacket and takes his tie off. Now he's in uniform but not in uniform. Is that even allowed?

The first officer finishes his pint then has a couple more. Fair to say he's a bit tipsy now. He decides he's had enough and walks off home. He's not breaking the law. Being drunk is not illegal. Drunk and Disorderly is, but not just drunk. He's fully entitled to be drunk in his own time.

While walking home a street crime happens. Our man is still in uniform. Everyone in the street is looking at him; he must intervene. He grabs the hoodlum who has just run out of an off-license without paying for a bottle of cider. It's a local homeless man. Now what's our officer to do? No handcuffs; no Airwave radio; no way to call for a van or for assistance. His mobile? Oops battery's dead! "Someone call 999," he shouts to the world at large.

Now the hoodlum is beginning to realise this arrest isn't going like all previous arrests. This officer doesn't have kit, or colleagues. The hoodlum pulls out a knife. Where is our officer's stab-proof vest? Back in his locker at the station is the answer; along with his CS gas spray, his ASP, and his cuffs. The cuffs he could take home with him, possibly the ASP (truncheon) as well. The gas, no, must be kept in a locked box when not in use.

How does this story end? However you like. Maybe the officer subdues the criminal without taking an injury. But then it goes to court. In the witness box the officer is obliged to admit he'd had quite a bit to drink when he made the arrest. The defence brief suggests that maybe his judgement was impaired at the time. He's forced to admit it could have been.

Or maybe he does get stabbed and the hoodlum runs off. Hopefully there are members of the public around to call for help, because the station doesn't know there's an officer down; they won't even begin to miss him until the start of his next shift.

This blogger reckons that police commuting in uniform is a can of worms best left closed.

Dale Farm riots scheduled

Major conflict is timetabled for the week after next; starting the 19th September to be precise. That's when police from all over the country will converge to effect the eviction of the 1,000 or so members of the Irish Travelling community illegally resident at Dale Farm in Basildon, Essex.

Dale Farm

Converging from the opposite direction will be hoards of loony-left trouble-makers intent on a good ruck as they attempt to defend the Travellers. This blog understands that defences are being built right now: tyre mountains, oil-soaked haystacks waiting to be set on fire, broken glass scattered to impede police vehicles. Meanwhile the local council are preparing bulldozers and earth-moving equipment to destroy all the illegally-built houses.

Strange, isn't it, that Travellers are only controversial when they stop travelling? They should take to the roads again, preferably the roads leading to County Limerick in Ireland, where they all come from.

Friday, 2 September 2011

Beeb showing gay porn

From the gaps between your fingers consider the image below...

Two men: shagging

It depicts two men; on a bed; both naked; having sex. It was shown on BBC1 Thursday last week; in a children's programme!

The programme was Torchwood. It's a spin-off from, and an anagram of, Doctor Who - the children's show first broadcast in the early 1960s. In the same family you also have The Sarah Jane Adventures. But a family programme it clearly is not.

What are the BBC thinking of broadcasting this unsuitable material? The audience consisted mainly of children; of the rest only about one or two percent may have been homosexual men who enjoyed the scene, the rest of us were just revolted.

The BBC is not doing it unknowingly. It's not a case of, "Oops some gay porn snuck into that programme; we just don't know how that could have happened!" No, it's there with malice aforethought.

It's there for a reason. And it's shown to children for a reason. Adults mainly have fully developed critical faculties. Show them something they find abhorrent and they'd just be disgusted. Children on the other hand are still open to persuasion. Show them something in a normal context and they will come to accept it as normal. Their minds are still malleable - for good or evil. And the BBC has decided that a perverse act, one that confounds nature and is an abomination in all religions should be inserted into the minds of children as normal.

There is a reason they want children to consider homosexual intercourse normal. It's part of a much bigger picture. They actually want all forms of self-gratification and licentiousness to be considered normal. At the moment this is as far as they dare go, and ten years ago they wouldn't have dared even this much. A decade in the future they will have pushed the boundaries of decency further: they'll be showing paedophilia; drug taking; public sex; drunkenness - all as quite normal and "approved of" by the lead character of the programme.

They aim to create a generation of children who grow up believing in no personal standards at all; having no self-respect, no boundaries.


It's because the programme-makers are perverts and our children are being groomed as their future victims.