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The UK about to go bankrupt!

Antagony said:
Hmm... strange then that the BBC are reporting better than expected economic growth.
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I know, but I am just using the same yard stick that "some" are using for the rest of Europe :)

The UK deficit is as high as the Greek and the debt is climbing up there. Also the value of the pound has been falling and falling so.

It dont really matter if the economy is "improving" as we have seen.

However saying that.

FT.com - Markets Data - Bonds & Rates Overview

check the 10 year for the UK and the 10 year for Spain.. considering people have been rambling on about Spain is next of the PIGS and what not..
 
What do you mean "about to go bankrupt"? We already are bankrupt! Of the £178 billion that had to be borrowed to cover the deficit, £175 billion was just printed by the Bank of England!

At least we have the option to devalue, print or change interest rates ... unlike Greece and Spain who are pretty much screwed.

I'm not saying we're not screwed either, though. It's just that the PIIGS are just more screwed.
 
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muffins said:
What do you mean "about to go bankrupt"? We already are bankrupt! Of the £178 billion that had to be borrowed to cover the deficit, £175 billion was just printed by the Bank of England!

At least we have the option to devalue, print or change interest rates ... unlike Greece and Spain who are pretty much screwed.

I'm not saying we're not screwed either, though. It's just that the PIIGS are just more screwed.
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If the PIIGS were "more screwed" then they would all be paying much higher rates on their 10 year.. they dont, in fact some actually pay less.

As for the options open to the UK vs the rest of Europe.. not much, since devaluing is never going to happen unless they are forced to do so by speculators.
 
PeteEU said:
If the PIIGS were "more screwed" then they would all be paying much higher rates on their 10 year.. they dont, in fact some actually pay less.
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UK 4.06% (screwed)
Spain 3.91% (screwed)
Portugal 4.57% (slightly more screwed)
Italy 4.04% (screwed)
Greece 6.69% (completely screwed)

Now then, how did the weaker economies in the EU get away with piling up huge quantities of cheap governmental and consumer debt that caused bubble growth in the various countries, which finally burst?

The Euro, and the single interest rate which was far too low for countries like the PIIGS.


PeteEU said:
As for the options open to the UK vs the rest of Europe.. not much, since devaluing is never going to happen unless they are forced to do so by speculators.
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The markets set the exchange rates, not central banks. The pound used to be over $2.00 at one point before the recession, and at its lowest point last year it was at $1.37. The Euro itself was well below parity with the Dollar a few years ago.

The last thing that Greece needs right now is a strong currency (which the Euro is, backed by the German economy) since the only way they can attract real international investment and REAL growth (and not the bubble growth that was fuelled by artificially cheap credit) is to have a weaker currency.

They should take a few tips from the Chinese.
 
muffins said:
UK 4.06% (screwed)
Spain 3.91% (screwed)
Portugal 4.57% (slightly more screwed)
Italy 4.04% (screwed)
Greece 6.69% (completely screwed)
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So Australia and New Zealand are completely screwed also?

And considering that most countries in the Eurozone are lower than even the US, then what.. they are only slightly screwed? How about the US?

Now then, how did the weaker economies in the EU get away with piling up huge quantities of cheap governmental and consumer debt that caused bubble growth in the various countries, which finally burst?
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What consumer debt? Mainland Europe have lower consumer debt by far, compared to the UK and US. We also have much higher savings rate and always have had.

The Euro, and the single interest rate which was far too low for countries like the PIIGS.
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No lol. Regardless if they had the Euro zone or not, their interest rate would have to follow the German and US rates, and they were low regardless. No matter how you slice and dice it, the problems in Greece and in part everywhere else, is NOT that they cant devalue or set their own interest rate, but that they have structural problems that they have avoided dealing with during the boom years and now it is coming to bite them in the ass.

The markets set the exchange rates, not central banks. The pound used to be over $2.00 at one point before the recession, and at its lowest point last year it was at $1.37. The Euro itself was well below parity with the Dollar a few years ago.
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No. The Euro value at the moment is the same approx as it was when the crisis finally hit the US.

ECB: Euro exchange rates USD

In fact, if you go over a 10 year period it is still wayyyy over the average, and FAR over what it was 10 years ago. That is why this hype by the media and pundits about "OMFGS THE EURO IS FALLING" and doom and gloom crap is pretty pathetic.

But that has nothing to do with the bund interest rate. That has to do with what people/countries are willing to accept as an interest on loans they can give to said country... aka the risk.

The last thing that Greece needs right now is a strong currency (which the Euro is, backed by the German economy) since the only way they can attract real international investment and REAL growth (and not the bubble growth that was fuelled by artificially cheap credit) is to have a weaker currency.

They should take a few tips from the Chinese.
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The last thing the EU needs is a strong currency so the fall in the Euro is welcome. That aint the point. Point is that people are making a mountain out of an ant hill just as I attempted to do with the first post.
 
The UK rate is high due to the qualitative easing (printing money ) the UK is doing

The PIGS dont have that mechanism to fund deficits so buyers of Greek bonds do not have the same currency risk they would with UK bonds
 
Lord Tammerlain said:
The UK rate is high due to the qualitative easing (printing money ) the UK is doing
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They would be even higher if it were not for the Bank of England buying the vast majority of the Gilts with freshly printed paper money.

There is the Austrian school of economics, there is the Keynesian school of economics and there is the Mugabe school of economics.

Guess which one we're following

:roll:
 
Lord Tammerlain said:
Australia has high rates out of concern for inflation, not because of risk
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It is a different thing. Totally different. I am talking about the 10year bund/bond/T-Bond or what ever a county calls it, and not the interest rate each country can set.
 
PeteEU said:
Forex: GBP/USD hits fresh 9-month low below 1.5270 on weak claims data

The pound is falling badly, and the economy is in the toilet.....

Or... it is the speculators yet again targeting a country.. who will be next?
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British Pound and Euro: (vs Dollar)
FXB is the pound/FXE the Euro

5 days:
FXB: Basic Chart for Rydex Specialized Products LLC - Yahoo! Finance

3 Mos
FXB: Basic Chart for Rydex Specialized Products LLC - Yahoo! Finance

6 months
FXB: Basic Chart for Rydex Specialized Products LLC - Yahoo! Finance

1 year
FXB: Basic Chart for Rydex Specialized Products LLC - Yahoo! Finance
 
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PeteEU said:
I know, but I am just using the same yard stick that "some" are using for the rest of Europe :)

The UK deficit is as high as the Greek and the debt is climbing up there. Also the value of the pound has been falling and falling so.

It dont really matter if the economy is "improving" as we have seen.

However saying that.

FT.com - Markets Data - Bonds & Rates Overview

check the 10 year for the UK and the 10 year for Spain.. considering people have been rambling on about Spain is next of the PIGS and what not..
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Our economy can handle our deficits and debts better than the Greek economy can for two reasons; structural differences, differences in size of the economies.
The BBC is a pro-EU source and have never published anti-EU or EU criticising articles from its journalists, but they are constantly on the Greek crises and realize the dire situation it is in. I dont see the need for this uneccesssary attack when the hype about Greece, even from anti-EU members of Europe, barely constitute hyperbole, because the situation is as bad as it gets.

This is a common thing to be expected from EUFascists, however. When the EU ****s up, they point the finger at the opposition. Infact Pete made a point of blaming the German school attack on America, and now the UK is being exposed to his slur campaign and elitist nonsense because he is "sulking" about all the attention his poor little EU dog Greek friends are receiving.
 
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muffins said:
There is the Austrian school of economics, there is the Keynesian school of economics and there is the Mugabe school of economics. Guess which one we're following :roll:
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How about the Irving Fisher [ame=http://en.wikipedia.org/wiki/Debt_deflation]Debt deflation - Wikipedia, the free encyclopedia[/ame] school? At least a few smart guys are willing to bet real money on it.

Hugh Hendry's Eclectica Fund August Commentary ~ market folly
 
bet the US can beat the UK in a race to the ****tiest economy.
 
Arch Enemy said:
bet the US can beat the UK in a race to the ****tiest economy.
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A lot will depend in whose policy makers are dumber--ours or theirs. Rather ominously, America under Obama seems to be following the Japanese model of attempting to support bubble assets and reflate its way out of the debt mess with government spending funded with more debt. This will not permit us to clear out the deadwood, reduce the overall debt burden, and start with a clean slate. Thus, I see economic stagnation in our future:

The surprise might concern the role that rising leverage has played in boosting GDP and in anchoring investors’ expectations to an unrealistic level of nominal GDP. We knew that there would be a "zero-hour" for the economy when the creation of new debt would not contribute to GDP growth. The government’s reaction to last year’s demand shock has been to increase its own leverage. But, with the economy operating at its zero-hour, we believe this incremental leverage will actually have a negative impact. That is to say, the public sector will fail in its attempt to bring the economy back to its previous level of nominal GDP. In this scenario, the outcome will disappoint the market’s expectations, which are rampantly bullish as evidenced by this year’s dramatic re-pricing of risk assets.

Hugh Hendry: The US Economy Has Reached Zero Hour
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I guess all the years of Labour rule have caught up to the UK. The world's governments are spending what they don't have, and it's typically due to social programs and money wasting bureaucracy. It does seem there is hope, more conservative parties in Europe have been elected to parliaments.
 
Phantom said:
I wouldn't put too much faith in the dollar...
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I was being ironic... just using the usual fear mongering tactics out there to drive currencies down for short term profit for the speculators.
 
Phantom said:
I wouldn't put too much faith in the dollar...
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I wouldn't either in the long run, but until Ben Bernanke starts dropping dollars from helicopters people around the world will need them to pay off all of those dollar-denominated debts.

Total_Credit_Market_Debt_vs__GDP.png
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Why don't they use the euro?
 
Is a mortgage backed security really an asset? If it says on the paper that it's worth $X amount, but the value of the house has halved and the home owner has stopped paying the mortgage and plans to just default and walk away ... is it really an asset?
 
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