Mark Carney's 'Beyond Brexit' ... (with bolts on)
In short Carney's plan to cut interest rate and risk possible deflation is to stimulate the UK economy by .... devaluing the pound.
Adversely punishing pensioners ... annuities market will be hit with wise olds deferring pension plans.
Bolt 1: Bonds ... Govt. Bonds fallen by 8% : "Falling gilt yields have swiftly sparked cuts to the already pitiful rates which retirees are offered to exchange a pension pot for an annuity, a type of insurance product that pays out an income until you die". Old and Guilty? Nope, these Bonds/Gilts are used by 'Widows & Orphan' funds as a safe haven for income investment and many younger folk will suffer too. Basically you get less return for your money: http://www.thisismoney.co.uk/money/pensions/article-3666110/Annuity-rate... Perhaps they should lower the annuity age to 30 and not 55... expect a huge surge in premium bonds.
Imports will become more expensive and exports cheaper. For those already committed to loans who have invested in hard assets rather than liquid, currency that is good news. As Sterling devalues (since 2008 I estimated 20%) (don't forget economies are cyclic) wot Carney hopes to achieve is that savings will be out weighed by investment into goods, services, stocks shares... (see the Japanese model and more lately the China model)... The risk is that sterling as a currency will go outward (as seen by the fall last week, (China has two currencies and many other states have currency restrictions). Austerity measures for savers to spend their hard earned rather than hide it away don't work if you put the fear of god in them... softer austerity or harsh reality is a political choice.
Right now IMV Carney is about to force recessional measures. For the South of England who were recovering from the 2008 crash/recession they will be hardest hit, with property market becoming stagnant. However for many up North who had yet to feel the benefit of the so called 'recovery' this could be good news. One nowt much will change, and two, those business that have survived have become leaner, meaner fitter and are more prepared to face what May.
Bolt 2: Reality Check? The UK Current Account: http://www.bbc.co.uk/news/uk-politics-eu-referendum-36684838 "The UK has had a continuous current account deficit since 1984. Since 2011, it has widened considerably. In the first three months of 2016, it was 6.9% of national income or £32.6bn. A current account deficit means a country depends on being able to borrow money overseas and on foreign companies wanting to invest in the UK..." "...current account deficits "appear not to matter until, well, they suddenly do". And what would make them suddenly matter would be something that happened that made overseas companies think twice about investing in the UK. Or if there were a reduction in other countries' confidence in the pound - confidence is important if you are running a big current account deficit. If you try to run a current account deficit without confidence then you get a sterling crisis and the value of the pound falls further..."
This also goes someway to explain IMV the North/South divide over Corbyn. https://www.theguardian.com/business/2015/dec/10/north-south-divide-set-...
Anyhow this is fag packet thought stuff.
This is also good news for the York Potash project as returning to a 'state of affairs' when the project was concieved (2008/9) jobs, investment, infrastructure now needed politically and economically (was wondering if the will was fading with 'recovery' heading North) Is Brexit a good kick up the political backside to get this Northern project moving?
http://www.whitbygazette.co.uk/news/local/european-exit-leads-to-split-o... "Chris Fraser, director of Sirius Minerals behind the York Potash mine project earmarked for Sneaton, said the exit was beneficial to them in terms of doing deals in the global market. He said: “Volatility of the current markets does not change anything about our business. “We do not have any long term contracts within the EU.” He added that it would be easier to negotiate trade deals with developing countries as at the moment they have to be led by the EU and “simply don’t happen”. He added: “Once we are outside the EU, we can go back out and reinvestigate the Commonwealth ties which is where a lot of our product ends up going.” One assumes the commitments for importing machinery, (TBM's), technical expertise etc etc are already in place following the recent announcement of contractors and the costs under the DFS are fixed give or take 10%. and these still hold?
Mind if you haven't got a pot to pee in... (Up the Khyber) ... "Cllr Dennett warned of job losses and a potential lack of money for reinvestment into industry and local groups and organisations. He told the Gazette: “There is a grave danger of another recession, and I fear that jobs in Whitby will be vulnerable. Unfortunately, if you lose your job, Scarborough JobMatch and Scarborough EnterpriseMatch will probably no longer be able to help you, as they depend on European money to survive and have so far already benefitted to the tune of £1.5 million. “We are fortunate enough to live in an area of outstandingly beautiful countryside, managed by our farmers who benefit from £4 billion a year of EU payments. “Can we be sure that this will continue?" The answer is erm no.
Advertently SBC's build projects are almost complete, Skardiborg in a bubble .... funding for the Cliff stabilisation etc may be vulnerable. (The Waterpark, Sports Village, Coventry University, Academy, Market Hall etc would cost a lot more tomorrow than yesterday.) SBC's risk averse capital investment management may protect it from external forces. Though the Future of the Futurist remains open to challenges.... and the Local Plan may need adjusting depending on the outcome of Offshore Wind Turbines. (Local authority credit ratings run on a par with Govt. ... so their credit rating will have dropped too... aka no more daft schemes or perhaps more diligence in strategic forward planning.)
The goal posts for small business and SME's have been widened, many EU funded charities will be foreclosed. There will be many gaps opening in the free 'market'. Sad, for those reliant on 'charity' but good for those with their thinking caps on. CAPS ON!!! Conscription to the NHS, voluntary services, ... has already been happening via community payback. Should this be expanded in future then that may give some credence and acceleration to the 'basic living income'. Green.
Not a good time to borrow money... as the criteria just got much harder. Good for those already in lots of debt. Thinking of moving house? Be cautious ... consider it a trap.
NB: Ignore the 'Modern Aristrocracy' & Black Market Economy ... no doubt will rise exponentially on its own accord.
NB II: Brown turned downs the Lib Dems... and IMV that was because political cycles are as natural as economic ones.
Tis all about the balance. ... With Theresa May installed as PM, will there be any need to remove the soft option that is Corbyn?
Osborne may even get his Northern Powerhouse... dope on a soap ;-) https://www.youtube.com/watch?v=F-ZcOdNN4VY
Brexit: Britain just got exciting.
Wot do ya mean its not Texas?