Holiday Attacks – what the government is not telling you!

Many condolences to the many families and friends that have been affected by the killings in Tunisia. Also to the many ordinary Tunisian’s  who want to live their life in peace!

So how do these terrible events happen?

The UK government certainly does not tell its citizens the full story which goes back many years. Post world-War II there were two great powers: America and the USSR. America’s top foreign policy was to stop the spread of communism, secure oil contracts and promote western values in Arab countries. While Europe became protected under America’s nuclear program the America saw authoritarian Arab governments the best deterrent to stop the spread of communism. Western governments then proceeded to prop up these governments for self-interest and their own benefit. Arab states became reliant on oil income which counted for up-to 90% of their income. Economists call this type of economy “rent” as it is the term for income acquired by states from sources other than taxes.

In the late 1970’s and early 1980’s the free market economy became prevalent, many of these countries in return for loans from the World Bank and other Western Institutions had to implement economic reforms and later on privatisation. Yet, the majority of this money was passed down to those already in power or to their family members. There was little distribution of wealth for the general public.

When the Arab spring began again Western governments felt it was the opportunity to bring Western style democracy to these countries that had never experienced such a system. It was bound to fail! Since the end of World-War II there has been endless Western interference into Arab states. It is a fact that 80% of all arms production from the West goes to states we currently class as rogue or have been in conflict with recently. The West has interfered economically, also military, that it is hardly surprising we have the rise of groups like IS.

The ideology of IS is something many of us can’t stomach but for their supporters it’s very logical. For them, it’s payback for all years of Western interference. This is something Western governments will not tell you – that their hands are on the current situation. The UK have sent troops to kill, (in the Queens name), they send “in their eyes” troops to kill in the name of Allah and when you get down to the nitty gritty of the situation there is not a lot different in the minds of both camps.

In my last piece of work I wrote that I do not see things getting any better – in-fact, I see things getting worse. The single gunman is rarely predicted and all Western society could be a target. It’s a sad state of affairs when people are not free to travel and gain experience from different cultures.  Our world however is sadly becoming dangerous place.

With refuges increasing, armed groups increasing, pressure will mount on governments so they will increasingly take draconian measures which supress freedoms and increasingly control the news. The outcome in the end is that society will break down.

Should they stay or should they go?

Alex Salmond

With just over a week until Scotland decides the polls put the ‘better together campaign’ and the ‘yes campaign’ just a hairs breath from each other. In all the debates it seems The English voice has long been lost, possibly because we don’t get to vote.

As an Englishman, six months ago and I would have said it is better that Scotland stayed within the UK. Now, I’ve changed my mind! Whatever happens on September 18th 2014 Westminster politics is never going to be the same. As an Englishman I do not like the devo-max option now on the table. I can’t see why the UK should still fund some of Scotland’s activities and allow their MP’s to claim vast amounts of expenses while on their jollies in Westminster. The question has to be ‘in’ or ‘out’, there is no devo-max option on the voting paper.

A truly independent Scotland must vote ‘yes’. Yes, this will mean having a Scottish currency and its own institutions. The Bank of England cannot be the bank of last resort if Scottish fiscal policy goes belly up in the future. A central bank of Scotland that will control interest rates, borrow and print money. You can even call your cash the ‘Scottish Pound’.

Now, I do believe the Scots have been sold short by Mr Salmond because all this nation building takes time and buckets of cash. In the Age of Empires you get from being a tiny settlement to a mega metropolis in a few hours. It’s also very easy for those buckets filled by oil to dry up on various new institutions. With no cash crossing the wall I believe Scotland will struggle to maintain, certainly over time, this socialist utopia Mr Salmond has sold the people. Will GDP suffer? Perhaps? Do you really think the divide between the political class and the ordinary person will shrink? I don’t think so, a new Scottish political class will emerge and the gap will grow ever increasing while the general worker will find prescription and university fees introduced and their taxes increased. Maybe, this is price Scott’s are prepared to pay, high taxes for a more equal society. If that is so, then I solute you with a scots whisky! Yet, this is the risk you must take if you truly want an independent Scotland, Well, look at it this way ‘The UNION’ is only 300 years old and that’s not long in the thousands of years of history.

As for the English, this is also a good opportunity. While once the thought of regional assemblies was laughable due to the fact they were nothing more than a talking shop. However, with real powers they could finally bring the Conservative party vision of localism to real fruition by diverting power from Westminster to the regions. Of-course, I say this with much irony as most intelligent thinkers know it’s never any party policy be that of, Labour, Conservative, Lib-Dem or UKIP to divert power away from Westminster.

The UNION is dead… long live the post union!

Time for America to make up its mind

Comment

The American election is around the corner and American’s will have to choose incumbent Barack Obama or his Republican opponent Mitt Romney. Whatever is the outcome the economy will hold both the key the Whitehouse and what happens beyond into 2017. Many would argue Obama’s presidency has been a rather lacklustre, starting off fine but not delivering its full potential. Under current economic circumstance would Romney do much better is the big question?

It’s going to be hard for any American President to deliver over the coming years as the economic power shifts from the West to the East. We yet may see in the coming years a decline in living standards both in the States and Europe. The outlook is not looking good!

Summer Holidays Over

Summer Holidays nearly over and MP’s returning to Westminster after the recess. Chancellor George Osborne has spent his summer hols deciding how to stimulate growth in a flat-lining economy. With Plan A consigned to the dustbin Mr Osborne today announced £50bn of private sector building.

Labour should be jumping for joy as the Coalition have decided what they have been saying the past year is in-fact correct;  the way out of recession is to borrow.

The coalition in 2010 cut 50% of the Affordable Housing budget but with 2011 completions and 2012 start on sites lower that any year Labour was in power the coalition have decided to inject 10bn in the hope the country will build itself out of recession.

It however, remains to be seen if any projects get off the ground as strict rules of apply and all have to start within the year. To do this the coalition will reform planning laws just 6 months after reforming them.   So only if they can reform the expensive appeals process will this make any difference. Yet there goes another Coalition policy as out of the window goes localism!

So two and a half years of saying no policy change.  The Chancellor finally admits plan A is a failure and his gamble has lost. So his solution is a 180 degree turn around and a gamble that this time it will work. Two and a half years wasted  and just two and half to go before the next general election?

Bets please?

Chancellor to win or lose

Last Gasp of the Political Cherry

Comment: As Greece teeters close to the edge of been thrown out of the Euro they now have just 6 weeks to find a solution to the terms of their bailout or enact even more tough austerity measures.

With almost all ballots counted, New Democracy has 29.7% of the vote (129 seats), Syriza 26.9% (71) and Pasok 12.3% (33).

There are 300 seats in parliament and Greece has a rule that gives the leading party 50 extra seats. However, only 40% of voters backed parties that broadly support the bailout deal with the EU and the IMF. Greeks may want to stay in the Euro but honestly this new current government may only bring a little breathing time

A cut of 15,000 state sector jobs this year – aiming for 150,000 by 2015

  • Cut minimum wage by 22%, to about 600 euros a month
  • Pension cut worth 300m euros this year
  • Spending cuts of more than 3bn euros this year
  • Liberalise labour laws to make hiring and firing easier
  • Boost tax collection
  • Carry out privatisations worth 15bn euros by 2015
  • Open up more professions to competition, eg in health, tourism and real estate

It is unlikely that Greece will be able to do any of these… cutting public sector jobs increases unemployment (which is already high), liberalising labour laws makes little sense as it does little to increase jobs. Pension cuts mean pensioners don’t spend and the unemployed do not pay taxes. In reality is there is no demand for goods therefore any need for supply.Greece will only change when this basic fact is addressed. Unfortunately political powers in Greece, Germany and the rest of the Euro Countries have no will to do this. The Greek government should instead be spending on infrastructure projects that increase employment while reforming the tax system. More employment means larger tax returns.

Germany’s insistence on austerity may mean the social breakdown of Greek society as the 60% show their rejection. Greece’s only hope of staying in the Euro will be political and monetary union within the Euro currency countries. This is something that looks far away.

I fear for the future of Greece – they are of the brink of complete social breakdown and the latest elections were the last gasp of the polictical cherry. The Greek people failed, they failed to see that a currency that is sucking the last life out of their country. The elections will mean Greece will have years of austerity, pain and no reward at the end. The end ‘by the way’ will see them leave the Euro.  It is  inevitable after the sticky plaster has failed

It’s time for a policy rethink

Comment: The UK government issued another round of bank lending in the hope that this money is filtered out to small business in cheap loans. The Coalition’s Programme for Government set out that deficit reduction, and continuing to ensure economic recovery, is the most urgent issue facing Britain.  The government’s response was to cut spending, increase VAT, and to increase the pension age. But has the government fundamentally got their sums wrong and is it time to rethink policy?

The new money the Bank will now offer cheap loans to banks on the basis that they increase lending. This will make it easier and cheaper for banks to borrow at least £5bn every month to cover any shortfalls in cash.

New money may provide short-term bank liquidity but at long-term expense. Currently private pension schemes are in deficit. According to the Pension Protection Fund (PPF) deficits have reach 312bn with only 929 of the 6,432 schemes currently in surplus.

Many private pensions buy government gilts but with the influx of printed money yields have fallen by 0.55 percentage point and overall 1.73 percent by May 2012. The National Association of Pension Funds (NAPF) continued to blame the Bank of England’s policy of quantitative easing for much of the recent ballooning of deficits.

The policy has been explicitly aimed at driving up the price of government bonds, which in turn depresses the returns they provide to investors, such as pension funds.

When it comes to retirement it seems many people will be disappointed with their payout. The government feels rising the retirement age will decrease its outlay on ageing population. Yet it will be false economy and only store up problems for future generations. As older people cannot retire until 67, 68 or 69, and will not be able to access a generous private pension they will hog jobs that younger people could fill. Those first years after school or university are important to mould young people into the work ethic. Two or three years of doing nothing they will be a lost generation relying on government handouts.

There are radical things the government could do to raise more capital but would be very unpopular. Extend VAT on newspapers (VAT is already charged on a newspapers internet business), VAT on children clothes, and abolish child benefit. They could also let some banks fail or as I would put it consolidation. At the same time they need to set a national price for fuel to keep consumer bills stable.

A UK GDP growth rate around 0.8 per cent this year I feel is still an optimistic outlook which I believe will be lower, a lot lower if the Euro collapses although we could still be a few years off a full collapse. However, it is coming!

Time for a revolution?

The row over rising executive pay has once again been reignited as a survey reveals a 10% increase inbayofFTSE100 bosses. Median total remuneration increased by 10 per cent to 3.7m, five times the increase in average earnings across the economy and despite 5 per cent fall in the FTSE 100.

Some of the biggest City’s biggest investors are starting to get nervous warning that excessive pay was against the ‘mood of the times’ when people were losing their jobs and struggling to remain employed.

The survey found basic salaries if FTSE 100 bosses rose by 2.5% but were boosted by deferred bonuses and long-term awards.

Comment: FTSE boss’s have shown their true colours! They need to tread carefully because if the Indians feel they are ‘taking the Michael’ off with their heads. Seriously the FTSE is down and they really don’t care about those who are less fortunate. As long as they can keep their lifestyle, expensive cars, dinners out, holidays, and second homes.

No wonder the masses feels very little sympathy for them when they fall. However social cohesion is vital for a society to work and at the moment society is straining to hold itself together not just in theUKbut many European countries. Anymore strain and both politicians and FSTE 100 bosses will feel the wrath of cain.