torsdag 11 december 2008

£ slides relentlessly

The relentless slide of the UK pound continues. Commentators try to explain it away by suggesting that it will make exports cheaper but our manufacturing capacity is a shadow of what it was. Britain's biggest "industry" of recent years - making money by moving it around - is no longer an effective means of livelihood. And with most of the world in a similar mess, though not, seemingly, to such an extend, there is not going to be a rush of visitors coming to spend all their money in Britain.

The economic "experts" assure us that there is a danger of deflation, but the falling exchange rate will soon enough translate into higher prices in the shops, and the growing body of government debt will unleash a tidal wave of inflation around 2011.

The interest rate cuts are proving useless except as a means of driving down the value of the £, whilst hitting the thrifty and provident, and since the recession will continue for at least three years longer than the Chancellor has confidently assured us it will end, the government debt will be about three times more than it is counting on, which means that inflation will continue until 2015 or so, probably at the same rate as in the later 1970s.

The whole unfolding disaster is a monument to the incompetence of British politicians and the people who advise them, bankers, and, behind them, the entire body of "professional" economists. In more barbaric times, those responsible would have lost their heads.

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