Does anybody remember that economic genius; Gordon Brown, the unelected Prime Minister? The man that “saved the world” with his wisdom. Perhaps we should have a look at the results of his actions now, some ten years later.
Brown tackled the financial crisis with several hundred billion pounds of Quantitative Easing (money printing). We were assured that this money would be kept on bank balance sheets and wouldn’t result in massive inflation, as was seen in Weimar Germany. The British currency is nearly always compared to the US dollar, Euro or Yen, all economies that have since engaged in massive Quantitative Easing, looked at like this things don’t seem too bad.
It is usually considered that gold is the best store of wealth in inflationary times, but according to some sources, the price of this too is manipulated. A truer picture emerges when we compare our currency to that of a country that hasn’t pursued Quantitative Easing, a country like New Zealand.
For decades, three NZ dollars to the UK pound, give or take a cent or two, was considered normal. Today there are less than two NZ dollars to the pound. Sometimes New Zealand attracts foreign money looking for a safe haven, causing fluctuations in its value, but overall the strength of its currency has been trending upwards for years, now at times up at around forty to forty five percent on its normal trend against the UK pound.
It’s not as if New Zealand has become an economic superpower, far from it. It is the 53rd largest economy in the world measured by gross domestic product and 68th largest in the world measured by purchasing power parity. A country of four and a half million people, a largely agricultural, tourist driven economy with a GDP of one hundred and thirty five billion, compared to the United Kingdom it is a Shire inhabited by Hobbits (no offence NZ).
The United Kingdom has an official population of sixty five million people, is the world’s fifth largest economy measured by gross domestic product and ninth largest measured by purchasing power parity. The UK has a gross domestic product of in excess of two thousand six hundred billion, compared to NZ’s hundred and thirty five billion and yet the Pound is diving against the NZ dollar.
It isn’t that the NZ dollar is getting stronger, it’s that the UK pound is getting rapidly weaker. We’re starting to see the results of a succession of economic geniuses like Gordon Brown. Sometimes, through the lies, spin, rhetoric, platitudes, false smiles and promises, the truth will emerge. Our currency is being tuned into confetti, it becomes ever more apparent that our political leaders are willing to throw us to the wolves to protect their banking and corporate buddies: ‘they’re too big to fail.’
According to an article in the Financial Times, after ten years of Quantitative Easing and other financial stimulus, Western economies are still sluggish, still showing little sign of life. The bond market is under extreme stress and interest rates will continue to rise, this at a time of record debt. Trillions in various currencies have been printed, stoking massive asset bubbles, creating debts upon which interest must be paid.
That our economy is rotting from the inside out, I have no doubt, and that we’re heading into disaster, I have no doubt, I’ve just given up trying to predict exactly how it will manifest itself. Jobs are still scarce, those that remain increasingly involve zero hours contracts, people are in record amounts of debt with the income multiples being required to buy a home at obscene levels, no way will real incomes in any way keep up with the inflation pent up in the system. Underneath the lies and subterfuge of our politicians there are just too many numbers that don’t make sense: there will be no happy outcome to this, there really will be blood on the streets. All this at a time when our population is rising exponentially.
In recent times, our political classes from whichever party have moved towards a left, liberal consensus, they all espouse socialistic ideas. A quote often attributed to Margaret Thatcher goes:
“The problem with socialism is that eventually you run out of other people’s money.”
When this current era of socialist induced financial illusion and deceit ends, this quote could be very profound indeed.
UKIP has a leadership election soon. I’m not resident in the UK and hence not a UKIP member, I really feel that I shouldn’t write articles supporting any particular contender. I will say this though; since Nigel Farage stood down as UKIP leader, his immediate successors tried to join the mainstream political consensus and it has been a failure.
Mainstream, Liberal, Left politics is getting to be a very crowded place, it must be a very lucrative place to be. These politicians though have utterly failed the British people. The time for consensus politics is coming to an end, I think it’ll only be months now before their lies are exposed, although they’ll claim they didn’t see it coming.
As disillusioned as I have become with UKIP in recent months, I still think that it is the only political party likely to give any real representation to the British people: I hope you choose your new leader wisely.