Italy, Spain... (We're all DOOMED content)

Cressers

So no sooner have the US decided to solve their debt woes by increasing their debt then the markets turn again to the Italian and Spanish debts, cue another EU bailout...

At some point it all has to stop and I think that time is soon...

http://www.bbc.co.uk/news/business-14385636

stealfwayne

Would that then mean that in a years time expensive Italian frames will actually be value for money? If so I may wait to get my pinarello.

redddraggon

stealfwayne wrote:

Would that then mean that in a years time expensive Italian frames will actually be value for money? If so I may wait to get my pinarello.

Pinarellos are made in China

stealfwayne

damn, another dream machine foiled by global economics.

rick_chasey

I'm increasingly of the opinion that I know nothing about it.

People who claim to do however all seem to be saying that the US in particular is almost a carbon copy of what happened in Japan in the '90s.

derbygrimpeur

I don't know huge amounts about these countries going down the pan but do find it astonishing that some Brits still moan about the cuts over here. It was either that or wind up like the Greeks.

Keith1983

I think the truth of the matter is that most of us haven't really got a clue about the economic situation in the world. We get told what we get told by politicians purely to serve their own interests. i.e. re-election. If we actually got our hands on the figures, calulations and other information very few if any would understand it. It would be nice though if we saw value for money for our taxes, and also to not get charged the highest prices for almost everythign, including goods that are made in the uk.

guinea

derbygrimpeur wrote:

I don't know huge amounts about these countries going down the pan but do find it astonishing that some Brits still moan about the cuts over here. It was either that or wind up like the Greeks.

That's simply not true. None of the cuts we've made will make any material difference to this country's fate.

The cuts we've implemented will not help and the deficit and national debt is growing. The cuts were a policy desicion and did next to nothing to plug the hole in the deficit.

To make the kind of cuts required to lead to sustainable recovery would mean having to completely slash the NHS, the military and education. No government will do this as they will become deeply unpopular for a very long time.

So they say we'll grow our way out of it.

Well, that can't happen either. We've never in history had the protracted growth at the levels required to acheive that objective but somehow we're supposed to be able to do it in these economic conditions? No chance.

So what options to we have? We could tax high earners a bucket load, but since they run the country that isn't going to happen. So we'll just go with the old plan of printing more cash to devalue the debt we have.

Unfortunately that screws the poor by making everything very expensive while it also robs the middle-classes of their savings, but we've got to protect the wealthy.

No go and do some work you serfs.

verylonglegs

I'm still amazed at how few spotted what was going on in the decade leading up to 2008.

inkyfingers

verylonglegs wrote:

I'm still amazed at how few spotted what was going on in the decade leading up to 2008.

I think that lots of people did, unfortunately none of them were in government.

When I saw Tony Blair stand up and say that he was going to put X billion £s extra into the NHS for no other reason than to buy votes I knew that sooner or later we would be in trouble.

OffTheBackAdam

I'm still amazed that people think we're cutting things here! :shock:
They're not cuts, it's just that we're not increasing spending by as much as before!
We're borrowing £400 million a day to fund our spending habits. There's been another 4,500 Civil Servants employed since last May's elections.
The mantra about "Taxing the rich" always gets wheeled out. OK, define "Rich".
The really rich, can just go elsewhere, ditto company's HQs, so penal rates of tax have the opposite effect, the amount of revenue raised falls.

ddraver

As an expat living in the eurozone I follw the exchange rates a bit (as in I have a daily update e-mail sent to me, not much more). What has interested me, and I am absoloutely not an expert, is that the price of the euro vs the GBP hardly varies with "bad news", and is always back to normal within a week or so. Whereas a smidgen of "bad news" from the UK results in the pound dropping like a stone (and me smugly approaching the Chain reaction website with my euros)

The disaster situation that appears in the opinion columns on online websites (Independant and Guardian for me) seems to be be a desperate attempt to say i told you so rather then based in any fact...

Now i ve said this, let's watch the euro implode...

EKIMIKE

Cressers wrote:

So no sooner have the US decided to solve their debt woes by increasing their debt ...

I appreciate you may be being sarcastic but i can't help but point out this is wrong. All they've done is increase the stakes. When the Chinese want their money back, more US assets will be on the table for them to take their pick from.

Ultimately, this is all money that no-one owns/doesn't exist but some 'clever' people on the stock and bond markets have synthesised out of perceived 'wealth' or 'confidence' or 'assets'. Some countries may default, some may strike 'deals' which are by any other terms a default on their debts (essentially China will become the worlds bailiffs).

In stead of mass hunger, illness, disease and death (which would be the logical end-game for a country/person with no money in this particular form of capitalism (thanks in particular to Milton Friedman, you c*nt) the debt problem will be geographically manoeuvred around the world and through societies until it no-longer exists as a problem for the ruling class.

Ordinary people will be unemployed, African countries will take more loans from Western governments and the World Bank and the language of 'Sovereign debt crises' will make way for talk of 'Corrupt African dictators and officials' and 'It's a free market, everyone has the freedom to make money for themsevles' but 'they lack entrepreneurial spirit and strong work ethic'.

The rich will get richer (well they already are getting richer) and the poor will get poorer.

What we require as a global society is a move away from our current paradigm of free market economics and greed driven capitalism and capital accumulation. I'm not a communist, i'm a realist - what we have now doesn't work.

derbygrimpeur

guinea > I think you're misunderstanding the cuts perhaps? The defecit is the amount the country is spending more then it's income (apologies to those that are aware of this). The national debt is increasing because the cuts plan to remove the defecit over a 4-5 year(?) period. So it's no surprise things aren't drastically different after only 1 year. Whilst there is a defecit, the national debt WILL rise. Only once the defecit is gone will the national debt come down. The cuts WILL make a difference and already are, it's just not that visible yet. If the cuts that have happened had not, we'd be in a much worse state and would certainly be in Spain/Greece territory.

There are two ways to reduce the defecit, increase taxes, or reduce spending.

Taxing high earners more won't achieve anything. The number of high earners is relatively few (of the entire population) and the amount raised by taxing them more wouldn't make even the slightest difference to the billions that needs to be raised. To think this is a case of rich v poor is rediculous. The only realistic way to reduce the defecit is to cut spending. The only argument then is whether the spending is being cut in the right places.

The current government are in a no-win situation, they're making tough decisions that the voting public don't like, but the decisions need to be taken.

guinea

OffTheBackAdam wrote:

The mantra about "Taxing the rich" always gets wheeled out. OK, define "Rich".
The really rich, can just go elsewhere, ditto company's HQs, so penal rates of tax have the opposite effect, the amount of revenue raised falls.

Bull.

The tax rate for top earners in the US was 91% in the US. Didn't really do them any harm, did it?

The tax revenue into the government coffers stays almost constant as the top line tax changes over time. However, the profile of where that money sits changes. The higher the top line of tax more more evenly the cash is distributed throughout society.

Low top line tax rates massively enriches the top couple of percent or earners. This just makes the other 98% poorer.

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

guinea

derbygrimpeur wrote:

guinea > I think you're misunderstanding the cuts perhaps?

No, I get your point.

It's just the amount of savings we're talking about are tiny and will do nothing long or short term to get us out of our current situation.

Look at the size of the national debt and the deficit and them look at the recovery plans and the growth they rely on.

The required level of sustained growth has never ever happened in history and it certainly is not going to happen in this economic climate.

SickAsAParrot

Watch 'Inside Job' if you want to see how a small group of people can totally f**k up an economy, and get away with it.

inkyfingers

guinea wrote:

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

I'm afraid that's rubbish, if you increase taxes too much not only will rich people leave the country and cease to pay tax, businesses will also relocate to foreign countries with lower taxes, in the same way that manufacturing has shifted to the far east in the last 20 years due to lower wage costs.

EKIMIKE

derbygrimpeur wrote:

The defecit is the amount the country is spending more then it's income (apologies to those that are aware of this).

Which results in an accumulation of debt.

Oh and add to your list of 'ways to reduce the deficit': Borrowing money which the US govt has just increased their capacity to do.

At the moment we're reducing the deficit (through spending cuts and tax rises) of money required to eliminate the deficit. Until we eliminate the budget deficit then we will continue to borrow money to plug the gap.

Ultimately we are not avoiding default, but merely delaying it. The debts will forever have a due date. However we're unlikely to default in the conventional sense. We're more likely to strike deals with our creditors (mainly China) which transfers our assets to their ownership.

Ron Stuart

Over the not inconsiderable years that I have been on this planet this subject seems always to be completely dominated by the concept of confidence. So if we stopped talking crisis then there would be less chance of there being one me thinks.

The money markets are just one great big Gambling Casino after all, buy low sell high, who pays for the profits made, there has to be looses yes?

Globalize: The goal is to increase material wealth, goods, and services throughout the world for the major players, trouble is when things go wrong they go wrong for everyone.

Buying bloody money to keep you in power when you can’t generate profit enough to at least pay the interest is a crime against a Nation.

Money was invented to barter for goods….. time we got back there.

derbygrimpeur

guinea wrote:

derbygrimpeur wrote:

guinea > I think you're misunderstanding the cuts perhaps?

No, I get your point.

It's just the amount of savings we're talking about are tiny and will do nothing long or short term to get us out of our current situation.

Look at the size of the national debt and the deficit and them look at the recovery plans and the growth they rely on.

The required level of sustained growth has never ever happened in history and it certainly is not going to happen in this economic climate.

I agree with what you're saying about sustained growth but without the cuts things will only get worse. At least there's actually some effort in trying to improve things.

term1te

guinea wrote:

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

Did I read last week that Virgin are moving to Geneva so that they could ride or ski in the alps after work, or was it to avoid UK tax?

guinea

inkyfingers wrote:

guinea wrote:

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

I'm afraid that's rubbish, if you increase taxes too much not only will rich people leave the country and cease to pay tax, businesses will also relocate to foreign countries with lower taxes, in the same way that manufacturing has shifted to the far east in the last 20 years due to lower wage costs.

Evidence?

Rich people can leave. The market they vacate will be taken by someone else who also pays tax.

Empolyees of multinational manufacturers are generally not rewarded in the highest tax rate bands, so that argument doesn't fly. THere would be no difference to manufacturing cost.

A 60% tax rate on all private income abouve £1m/year is a pretty fair tax my historical standards.

Ron Stuart

Term1te wrote:

guinea wrote:

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

Did I read last week that Virgin are moving to Geneva so that they could ride or ski in the alps after work, or was it to avoid UK tax?

One part of the business, which may actually save taxes but may become a ruinous PR move.

rick_chasey

guinea wrote:

inkyfingers wrote:

guinea wrote:

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

I'm afraid that's rubbish, if you increase taxes too much not only will rich people leave the country and cease to pay tax, businesses will also relocate to foreign countries with lower taxes, in the same way that manufacturing has shifted to the far east in the last 20 years due to lower wage costs.

Evidence?

Rich people can leave. The market they vacate will be taken by someone else who also pays tax.

I work in senior city recruitment (in fact, just investment banks). Everyone I deal with is well into the 50% tax bracket. I mean, really really into it.

I map markets, so I've come across maybe a thousand people, maybe more.

I don't know of anyone, bar a few high profile buy-side guys who moved to Switzerland, but then again, they'd probably have moved anyway.

TheStone

With the NIs, the top rate is really closer to 65%. This makes no sense when dividends, capital gains etc are taxed at a much lower rate.

By all means raise tax (if more income can be gained), but I don't think employment taxes can take much more. Anyone who thinks we can keep spending as we are is crazy. It's really just stealing from our children as the longer we think we deserve to borrow to pay for our current services, the less that will be available for them.

The problem is debt. We've (private and govt) borrowed too much over the last decade. The 'growth' we've seen is really just debt (offset by inflation, which was kept low because of cheap imports). We can't have growth now, without creating more debt, but we can't pay off the debt we've already created.

We either pay down debt, or hyperinflate, but either way someone's gonna lose and the general standard of living has to drop.

Say if you earn 20k and one year you borrow and extra 10k and have a great year. Then next year, you either pay back to 10k and have a rubbish year, or default on the 10k and whoever lent it to you will have a bad year. ...... or as the govts (and almost a whole generation) seem to think, we can just try and borrow another 10k and hope for the best.

Whatever happens: Spending has to drop, there will be no growth for at least 5 years, standards of living will drop further.

Ron Stuart

Rick Chasey wrote:

guinea wrote:

inkyfingers wrote:

guinea wrote:

There is no evidence that moeny would leave this country if taxes were raised. Sure, people may leave, but the businesses and money remains.

I'm afraid that's rubbish, if you increase taxes too much not only will rich people leave the country and cease to pay tax, businesses will also relocate to foreign countries with lower taxes, in the same way that manufacturing has shifted to the far east in the last 20 years due to lower wage costs.

Evidence?

Rich people can leave. The market they vacate will be taken by someone else who also pays tax.

I work in senior city recruitment (in fact, just investment banks). Everyone I deal with is well into the 50% tax bracket. I mean, really really into it.

I map markets, so I've come across maybe a thousand people, maybe more.

I don't know of anyone, bar a few high profile buy-side guys who moved to Switzerland, but then again, they'd probably have moved anyway.

Why is it then that all these European countries are richer than we are per capita and the one thing they don't have is a major financial market.

In desending order starting with the richest per capita as of Jan 24th 2011 your top ten:

Liechtenstein
Luxembourg
Norway
Ireland
San Marino
Iceland
Netherlands
Switzerland
Austria
Sweden

I think you will find that London as a financial centre is as San Marino is to Italy. :roll:

rick_chasey

Ron Stuart wrote:

Why is it then that all these European countries are richer than we are per capita and the one thing they don't have is a major financial market.

In desending order starting with the richest per capita as of Jan 24th 2011 your top ten:

Liechtenstein
Luxembourg
Norway
Ireland
San Marino
Iceland
Netherlands
Switzerland
Austria
Sweden

I think you will find that London as a financial centre is as San Marino is to Italy. :roll:

I never said that financial centres were amazing. I was just giving my take on the departure (or lack of) of high earners in light of a new, higher tax rate for high earners, given that, you know, it's my job.

Beyond the tiny tax havens, your list has countries who properly tax and spend.

Ron Stuart

[[/quote] I never said that financial centres were amazing. I was just giving my take on the departure (or lack of) of high earners in light of a new, higher tax rate for high earners, given that, you know, it's my job.

Beyond the tiny tax havens, your list has countries who properly tax and spend.[/quote]

Not my list I merely reproduced it.
The list was reproduced to highlight that the city of London isn't necessary to the wealth of the citizens of the UK and as far as the banking industry is concerned it has turned out be a tremendous burden on the UK tax payer.
We need a diverse wealth base so we in the UK don't get crippled by just one to big industry catching a cold. What’s more the money markets are too volatile to put that many eggs in the money markets basket.

rick_chasey

You're arguing a totally different point to me.

I'm saying in my professional experience with high earners, they don't tend to leave when faced with a high rate of tax.

You're making a point about the value of having a competitive advantage in finance or not.

Ron Stuart

Rick Chasey wrote:

You're arguing a totally different point to me.

I'm saying in my professional experience with high earners, they don't tend to leave when faced with a high rate of tax.

You're making a point about the value of having a competitive advantage in finance or not.

Maybe but it's got yourself engaged, life’s about optimizing the marginal gains as Dave might say :P