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UK GDP - what's going on?

including Budgets
ursaminortaur
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Re: UK GDP - what's going on?

#356343

Postby ursaminortaur » November 13th, 2020, 9:01 pm

Nimrod103 wrote:
tikunetih wrote:
dealtn wrote:Then we hit the potential Brexit wobble in January where it is still too early to accurately predict what will happen given the terms of transition are still unknown and negotiations continue).


Technical point of order: we left the EU on 31st Jan this year, and we are currently in the transition period, during which the UK remains subject to EU law and we continue to participate in the EU's single market and customs union.

But, that transition period ends in ~50 days time because the UK Govt declined to seek, by the 30 June deadline that applied for such an action, the 12-24 month optional transition period extension which the Withdrawal Agreement had made provision for.


How much transition do we need? It's been 4 1/2 years already.


Since things like the necessary IT systems, needed whether there is a bare-bones deal or not, are either not completed or not fully tested it looks like we could certainly do with a little more time.

tikunetih
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Re: UK GDP - what's going on?

#356345

Postby tikunetih » November 13th, 2020, 9:13 pm

New HMRC CDS system - having already been reduced in scope/functionality - entering Beta testing on 23rd Dec. Interesting!
In reality, likely to be Alpha-level in completeness/stability, but rushed out into Beta for optics.

On the plus side, Northern Ireland looks "all set"!
'No realistic chance' CDS will work for Northern Ireland shipments by 1 January
https://theloadstar.com/no-realistic-ch ... 1-january/

1nvest
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Re: UK GDP - what's going on?

#469261

Postby 1nvest » December 30th, 2021, 6:27 pm

zico wrote:Sky are covering the news that debt exceeds 100% of GDP for the first time

£2.2Tn debt. BoE holds around 900Bn of Gilts, where all the interest paid by the Treasury on those Gilts is returned back to the Trreasury. The BoE in effect printed money to buy those Gilts, could equally just tear them up.

2007 UK debt was around £500Bn and cost around (paid interest of) 5%. £25Bn/year to service.
1.3Tn recent debt (excluding what the BoE holds) costs around 2%, £26Bn/year. Since 2007 there's been around 40% inflation

Much of 2007 debt was "restructured", older higher cost debt bought up by the BoE who printed money to buy them. Treasury issued new debt spanning across longer periods to maturity costing less to service (2% instead of 5%), of which many are nominal bonds i.e. that 2% compares to target 2% inflation rates.

Recent inflation spikes will further erode the real (after inflation) debt liabilities. The main issue is as/when each Gilt matures the choice of either repaying in full or rolling into another issue may be faced with rolling costing more (2% cost against maturing bond replaced by another that might cost 4%/whatever). But that's spread out over many many years.

The Bank of Japan buys up most of Japans debt that stands at 266% of GDP and where the BoJ holds around 45% of that debt. In effect if the Treasury need money then the 'independent' central bank can print money and give it to the Treasury, but with the smoke and mirrors illusion that the two are separate/independent. Printing/spending money benefits those who do the print/spend, at the cost of devaluing all other notes in circulation, is a form of micro-taxation, commonly called 'inflation', might otherwise be called devaluation. Some states, such as France, would like to push that to the extreme, print enough money to buy up all bonds, stocks, land/properties, a grand nationalisation. Others opine that fiat currencies and promises around the acceptance of such have been pushed too far and that some new paradigm is required. China/Russia favour a return to some kind of gold standard, where money was finite and backed by something tangible. The US assumes 'there is no alternative' (TINA) and strive to keep it that way as being the primary reserve currency setup to replace gold they can print/spend and export inflation onto others despite having (broken) promised to act responsibly. Yet others opine there should be a basket of currencies used to replace the US$ as the primary reserve 'currency'.

Interesting times.

GoSeigen
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Re: UK GDP - what's going on?

#469339

Postby GoSeigen » December 31st, 2021, 7:27 am

Bemused when people write about money (as issued via QE or indeed by commercial banks) as if it is not a government liability.

GS

1nvest
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Re: UK GDP - what's going on?

#469355

Postby 1nvest » December 31st, 2021, 9:29 am

The whole fractional banking (your money becomes the banks money after being deposited), money backed by nothing ... is fubar IMO. "Avoid deflation at any cost as otherwise money sits idle in awareness prices will become cheaper tomorrow" that has induced just inflation since the 1930's ending of the gold standard (for centuries when on the gold standard there was broad 0% inflation, but in a volatile manner with some localised periods of high spikes in inflation/deflation that tended to cluster and generally cancel each other out, such as across the WW1 era, flat leading up to that, inflation spike, deflation back down again 'blip').

Image

Since the 1930's idle money left 'deposited' in idle land and gold has generally seen prices of products/services become cheaper (deflation). At first mildly so, rear view mirror type expectations of flatness from 1930's to 1960's, but a break-down (broader down-slope 'deflation') since the 1970's

Central Banks policies to avoid deflation, only maintain inflation, has the opposing effect that in non legal tender alternative commodity currencies such as land, gold ...etc. leaving that 'cash' longer before buying stuff is inclined to see cheaper general prices (deflation). The exact same deflationary effect they strive so hard to avoid.

Fundamentally replacing the gold standard with the US$, on the broken promise to act responsibly, is in the process of failure. Sustained only by spouting 'TINA' (US belief (hope) that There Is No Alternative).

Money isn't a government liability, its vapourware. Pretence of a government liability based purely on trust/faith alone. Given how casually MP's work in Parliament more often as their second day job (£80K MP salary compared to £200K main job salary (bribe)) and break manifesto promises/are clearly in it for their own best interest etc. such faith/trust is very stretched to put it mildly. As are the suggestions of Central Banks being 'independent'.


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