Malcolm Robinson

As a further aside on today's comments and my 'further questions remark' I would like to draw attention to the way Central Banks, including the UK central bank, the BoE, are stoking the fires of inflation as a seemingly economic strategy. GGG's warnings of hyperinflation might be proved prophetic but for slightly different reasons to the ones he states. There has been a distinct loss of independence by central banks as politicians claim to have saved the world from the worst effects of recession if not the prospect of a pronounced depression. They have allowed inflationary influences to build in economies as a way of combating deflation. Let's not forget politicians supposedly have no control over fiscal policy as deemed necessary by a central bank! So we could see larger and larger doses of inflation, accompanied by 'massaged' governmental statistics, looks like the ONS is already under political control, as a way of avoiding the public sector cuts which the underlying real economy needs to rebalance the deficit. If that is the case, and don't we all like a good conspiracy theory, then no wonder Brown and Darling can look so complacent when talking about addressing the deficit. It really is that £50 note going around the country!

If we consider the Greek situation and the ECB (lack of!) 'Action Plan' with regard to other central banks around the world there does seem to be acute differences not least in the QE programmes many have used. Inside the Euro zone there is no connectivity between super-national monetary policy and national fiscal policy therefore a straight QE programme was out of the question. Instead we saw the ECB cut rates and flood the short term money markets with cash. This seemed to have the desired effect for a while. However once the Greek troubles hit, the myriad of plans and bale outs put forward by the ECB and the inertia they produced actually had the effect of negating any fiscal benefits accrued from the ECB policy directed at the credit crunch. In other words the ECB lost its credibility as far as the markets are concerned anyway. Their whole effort towards Greece was to provide a borrowing requirement at modest rates but with Greek bonds now at their highest trading levels compared with Bunds that is a forlorn hope. The real problem is that Greece needs funds just to get by month on month and we can see investors in even the last round of Greek government debt issue start to turn their noses up at any more. It is now cheaper to insure Iceland's government debt than Greek. Considering other implications for the ECB we see Euro Zone economic growth figures for the 4th quarter revised down to zero! The OECD have also forecast German growth to come in at -0.4% in the first quarter of this year. Not very inspiring. Trichet's quip, 'I am the Euro,' will come back to haunt him in the not too distant future! Outside the Euro Zone the Fed have come out and said they are willing to take chances with inflation, hope they manage to get a lasso on that wild bull! Japan did go down the QE route some time ago but that has produced rampant deflation and her 'lost decade' has now become her 'two lost decades!' The UK's QE programme does hold an often overlooked question. If the BoE were given independence from government to take national fiscal decisions then how come the chancellor had to give his permission to start the printing presses? It does lead to further questions regarding inflation target figures as well! As I commented on in an earlier post UK producer prices are going up at exactly the worst time in the cycle. The (discredited) ONS have reported output price index for home sales of manufactured products rose by 5% in the year to March. Also the input price index for materials and fuels purchased by manufacturing industry rose 10.1% in the year to March and rose 3.6% between February and March. The main driver in this has been the price of oil and its associated products. Are you starting to get a picture monsta?

If we just look at the numbers the UK is in a worse position than Greece! Until we get a dedicated action plan in place (austerity plan) our numbers will get worse. Don't be fooled by the recent highs on the stock market and house prices, they are being artificially buoyed up by all that 'printed money' the chancellor threw around trying to get past an impending election! Even just consider the recent oil price movements, now what is oil priced in.........$'s and what has happened to our exchange rate.......... Costs are about to rise significantly here which leads to upward pressure on wage demands at a time when we cannot afford it and should really be repaying capital not increasing borrowing to meet running costs! As far as Greece herself goes it's a case of, 'there but for the grace of God.....' The whole lot is interconnected and if Greece fails and is still a Euro member it will probably take the euro with it. That is why the ECB are so keen to find some sort of solution. It will probably result in a revolution and possibly a junta on the streets of Athens. The Greek people have been failed by firstly their own politicians but possibly and more importantly by grandstanding Eurocrats who haven't the faintest idea in which direction they should be going. Yes they do have to accept responsibility for things like a bloated public sector with incredible rights and pay structures, a huge black labour market and misrepresented fiscal figures but these are all things which given the right leadership could have been put right. It is quickly developing into the banana republic of Europe! I am still surprised to see Greece in this position; her economy was a model for club med only half a dozen years ago. I think Berlusconi might well be thankful the international spotlight is on Greece not Italy!

Looks like the beginning of the end for Greece as her debt yields spiral out of control. Trichet is trying to talk the market calm but Greek 10yr debt, which I like to benchmark against the Bund, is now 7.33% making it impossible for the Greek government to borrow at anything like a realistic rate and for that read repayable. Default looks to be the only option if it continues in this way. I feel sorry for the average Greek who was part of a pretty decent economy just a few years ago. Now through international chicanery and political double dealing they are about to be forced into a situation no one would like to go through. It's always better to lead a charge rather than be at the head of a stampede. Worth reflecting on this quote by Alexander Tyler in 1778, "A democracy cannot exist as a permanent form of government. It can exist until the citizenry discovers that they can vote for themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship” Anyone else think we could easily attach that quote to our own democracy? We don't see to have learnt anything in the last 250 years!

Monsta, thing is oil is selling for 85 dollars a barrel and its hit an all time high at up to 125p per litre at the pumps! whats going on there the greedy....... You haven't been paying attention have you! It's all about supply and demand, as long as the likes of China and India keep buying at whatever price we don't stand a chance. Have a look at China's recent activity in raw material producers, they are taking them over or buying them outright to protect supply lines. This is economic warfare! Every time you buy a 'made in China' item you contribute to the problem! We have just recently seen the Indian approach to steel production, same sort of thinking, protect your own and sod the rest! should there not be a stop to this crippling tax the government puts on fuels? This is an interesting concept, especially when all political parties are saying they are for fiscal help during a 'recovery' stage in the economic cycle. What better way to stimulate the economy than to reduce one of the most crippling costs? Course that has to be counterbalanced with the loss of income in the chancellor's coffers but if they can print money to 'give away' then........... should alistar darling not be tied down a flogged for looking like a thunder bird? Yes!

We really do need to get back to Greece owing to events over the Easter weekend. Again we see the Eurocrats posturing at the expense of Greece and her peoples. It all boils down to the 'agreement' European leaders reached over the Greek bailout. Germany is insisting the interest rate for any bilateral loans made to Greece by the other Euro members have to be at market rates and suggest 6-6.5%. Other members suggest 4-4.5% quite a difference. This is probably down to the nightmare of the German constitutional court making a ruling! Anyway the result, Greek 10yr bonds have topped 7% even worse than the 6odd% they were. Greek ministers are now publicly asking, and in pretty caustic terminology, why should they give the Germans a return on their investment of 3%+ as German Bunds are edging up to around 4% meaning Germany could borrow what it lends to Greece and made a tidy profit on the deal, not really what was hoped for! While this is going on Greece is hawking her wares around the USA trying to get American investment, although why they think the yanks will be any kinder than Germany is somewhat unclear to say the least! We only have to look at our own 'American' debt which we took on after the war to see the sort of stipulations they make! I think we also have to consider the all but bankrupt situations many of the American great cities are facing themselves! If the other members of the Euro club get their way and reduce the actual cost of borrowing for Greece, look to that as a template for other member states in similar financial difficulties! As it stands however the paymaster isn't having any of it. Anyone know of any UK companies making riot gear and supplying to the Greek government, I think they are about to go onto overtime and it wont stop there!

If the economic 'white paper' NCC have just published is anything to go by they are setting great store in becoming carbon neutral, a decent passenger rail infrastructure would seem complimentary to that ideal? Course we are now talking about influencing a private company in the private sector, I wonder just how much clout we really have in those decisions?

Ok Monsta just to broaden the view somewhat............ Taking a general overview of the world economic situation is there anything we should be especially concerned about? Oil prices! Over the last year we have seen a 65% rise in oil price. This has clear implications for our domestic recovery considering our place in the global marketplace and also (our) inflation prospects. It is generally accepted that upward pressure of oil prices has preceded western recessions since the 1970's. Given our fragile economic state that is worrying. It is also worth asking if the $147 a barrel spike in July 2008 actually had a major part to play in the current world recession, notwithstanding the effects of the credit crunch? It would seem reasonable to suggest that anymore upwards movement in the oil price will have a corresponding effect on our economy and we might once again see our political leaders blame global effects for our predicament. Thing is this time they might be right as India has doubled her oil imports from Saudi and China has still increased hers by around 15% this year.

If I was going to stand in this election I would stand as the 'None of the above' party,if only to get it on the ballot papers! I don't think it is apathy either Stephen just lack of connection with the main political parties. The three main candidates (Wansbeck) have just taken part in a debate in Morpeth talking about rail infrastructure. They were given 10 minutes each to say what they thought about the topic. Thats whats wrong!!!!!!!! They should have taken part in an open debate where us mugs could have told them how we wanted them to act. They are OUR representatives its not the other way around!

This is the problem when you have career politicians who will say only what they think is needed to sway narrow sections of the electorate. Without core beliefs and principles (far too radical a thought these days!) they float around like jellyfish trying to appeal to everyone yet satisfying no one. Hardly any have done a days graft in their lives how on earth can they identify with the normal man and woman in the street, much less understand the concerns and pressures we have to deal with on a daily basis. The Prime Minister we have has never stood for a national election as leader of that party and even if they win it looks likely he will face a mutiny amongst the ranks and himself be replaced. Already he has so little confidence in his group of MPs he has had to go outside of elected members to fill cabinet posts, that should be a clear signal as to the capabilities of the elected MPs he has to choose from! The main opposition is led by a couple of Hooray Henrys who have absolutely no comprehension how the other 99% of the population live. Even the third place offering didn't know if he wanted to be a conservative or something else having initially joined that party although he now claims he cannot remember that episode in his life! It is therefore not surprising the electorate as a whole is having trouble identifying with any of them. We don't elect a government we only elect an MP, maybe its time for us and them to take that responsibility a bit more seriously? One last point, Labour isn't a political party in the strictest sense of the word it is a wholly owned subsidiary of the Trade Union movement paid for by their subscriptions. (OK as well as some rich guys buying grace and favours!)

Considering Greece and the ECB/IMF bale out is there another European country where we can look and see any similarities as to what might happen? There could be as Latvia is going through an IMF austerity programme over the course of which her GDP has actually fallen......30%! Of course timing has affected this as her austerity programme has taken place during a world economic contraction but still, 30%! If we look at her recent history we see she acceded the EU in 2004 and almost immediately had a debt fuelled consumer boom with loose fiscal policy by government which resulted in a housing bubble. In 2006 her economic growth rate peaked at 12.2%, which given other indicators should have warned of an overheating economy. Coming down off these highs she found herself with an inflation figure of 18% in 2008 and international investment has all but deserted her. In the 4th quarter of 2008 GDP shrank by 10.5% and government bonds had been downgraded to junk status by Standard and Poor. In December of 2008 the IMF were called in and lent 7.5B Euros. Interesting to note that the Nordic countries contributed heavily to this fund as they had invested strongly into the housing boom of only a few years previous! So she was in quite a mess and the cost of IMF involvement, an austery package which has actually made the situation worse having contracted the economy too much. In 2009 GDP was estimated to fall 5% but fell 12.2% and so we see a downward spiral which is hard and even costlier to break free of. Greece could easily fall victim to this scenario however it is worth noting IMF involvement is only 1/3rd of the Greek bailout and the ECB might be able to counterbalance IMF implications. Problem is I can only see this bailout getting Greece through the next few months, what happens next time as her austery programme will take time to implement and add any sort of value? The Greek government have predicted a fall of around 0.3% in GDP for 2010 while DB have predicted a fall of 4% with an overall figure of around 8% over the course of her austery programme and unemployment levels about double the 10% figure they are today. Given the Mediterranean temperament and what we have already seen with regard to public sector pay freezes and cuts it doesn't take a genius to extrapolate an explosive result if these figures come anywhere near true! I can easily see a handful of basket case economies relying on QE programmes by the major players to keep them in the game! Problem is that UK PLC has very similar figures!

That's the $64,000 question GGGG and it's getting harder and harder to answer! Going forward we have to factor in less and less disposable incomes as far as entertainment and leisure goes anyway. Whatever we do come up with has to be embraced by the whole community or it will be a non starter. As always in these cases a good place to start would be listing the 'assets' and the 'liabilities'. In other words what do we need or aspire to, set against what do we have? The discrepancy will be where we need to focus our efforts.

Paul, Trouble is you have to consider running costs, set up costs, overheads etc for a place on Front Street. Write a business plan and then sit back and try to justify the turnover figures you are using! (Monsta's posting.) It would seem this topic is essentially about youth provision, (Deb's posting) or the abject lack of it here. Should we as a community try to have a focussed effort in this area or do we just content ourselves with moaning about the problems associated with kids hanging around with nowhere to go? Given present constraints on capital spending by councils I think we have to be more innovative than ever and address this problem using a by product, almost, of other projects which can justify social investment. We need a holistic approach and that is why I think we need a strategic 'development' plan for Bedlington.

I have been talking to some American economists regarding comparisons between Greece and California and I came across this in one of their links. Its a sobering read whose end result is more to do with contemporary effects rather than causal ones! The Great Depression was a worldwide economic crisis that in the United States was marked by widespread unemployment, near halts in industrial production and construction, and an 89 percent decline in stock prices. It was preceded by the so-called New Era, a time of low unemployment when general prosperity masked vast disparities in income. The start of the Depression is usually pegged to the stock market crash of "Black Tuesday,” Oct. 29, 1929, when the Dow Jones Industrial Average fell almost 23 percent and the market lost between $8 billion and $9 billion in value. But it was just one in a series of losses during a time of extreme market volatility that exposed those who had bought stocks "on margin” – with borrowed money. The stock market continued to decline despite brief rallies. Unemployment rose and wages fell for those who continued to work. The use of credit for the purchase of homes, cars, furniture and household appliances resulted in foreclosures and repossessions. As consumers lost buying power industrial production fell, businesses failed, and more workers lost their jobs. Farmers were caught in a depression of their own that had extended through much of the 1920s. This was caused by the collapse of food prices with the loss of export markets after World War I and years of drought that were marked by huge dust storms that blackened skies at noon and scoured the land of topsoil. As city dwellers lost their homes, farmers also lost their land and equipment to foreclosure. President Herbert Hoover, a Republican and former Commerce secretary, believed the government should monitor the economy and encourage counter-cyclical spending to ease downturns, but not directly intervene. As the jobless population grew, he resisted calls from Congress, governors, and mayors to combat unemployment by financing public service jobs. He encouraged the creation of such jobs, but said it was up to state and local governments to pay for them. He also believed that relieving the suffering of the unemployed was solely up to local governments and private charities. By 1932 the unemployment rate had soared past 20 percent. Thousands of banks and businesses had failed. Millions were homeless. Men (and women) returned home from fruitless job hunts to find their dwellings padlocked and their possessions and families turned into the street. Many drifted from town to town looking for non-existent jobs. Many more lived at the edges of cities in makeshift shantytowns their residents derisively called Hoovervilles. People foraged in dumps and garbage cans for food. The presidential campaign of 1932 was run against the backdrop of the Depression. Franklin Delano Roosevelt won the Democratic nomination and campaigned on a platform of attention to "the forgotten man at the bottom of the economic pyramid.” Hoover continued to insist it was not the government's job to address the growing social crisis. Roosevelt won in a landslide. He took office on March 4, 1933, with the declaration that "the only thing we have to fear is fear itself.” Roosevelt faced a banking crisis and unemployment that had reached 24.9 percent. Thirteen to 15 million workers had no jobs. Banks regained their equilibrium after Roosevelt persuaded Congress to declare a nationwide bank holiday. He offered and Congress passed a series of emergency measures that came to characterize his promise of a "new deal for the American people.” The legislative tally of the new administration's first hundred days reformed banking and the stock market; insured private bank deposits; protected home mortgages; sought to stabilize industrial and agricultural production; created a program to build large public works and another to build hydroelectric dams to bring power to the rural South; brought federal relief to millions, and sent thousands of young men into the national parks and forests to plant trees and control erosion. The parks and forests program, called the Civilian Conservation Corps, was the first so-called work relief program that provided federally funded jobs. Roosevelt later created a large-scale temporary jobs program during the winter of 1933–34. The Civil Works Administration employed more than four million men and women at jobs from building and repairing roads and bridges, parks, playgrounds and public buildings to creating art. Unemployment, however, persisted at high levels. That led the administration to create a permanent jobs program, the Works Progress Administration. The W.P.A. began in 1935 and would last until 1943, employing 8.5 million people and spending $11 billion as it transformed the national infrastructure, made clothing for the poor, and created landmark programs in art, music, theatre and writing. To accommodate unions that were growing stronger at the time, the W.P.A. at first paid building trades workers "prevailing wages” but shortened their hours so as not to compete with private employers. Roosevelt's efforts to assert government control over the economy were frustrated by Supreme Court rulings that overturned key pieces of legislation. In response, Roosevelt made the misstep of trying to "pack” the Supreme Court with additional justices. Congress rejected this 1937 proposal and turned against further New Deal measures, but not before the Social Security Act creating old-age pensions went into effect. Brightening economic prospects were dashed in 1937 by a deep recession that lasted from that fall through most of 1938. The new downturn rolled back gains in industrial production and employment, prolonged the Depression and caused Roosevelt to increase the work relief rolls of the W.P.A. to their highest level ever. Hitler's invasion of Poland in September 1939, following Japan's invasion of China two years earlier and the continuing war there, turned national attention to defence. Roosevelt, who had been re-elected in 1936, sought to rebuild a military infrastructure that had fallen into disrepair after World War I. This became a new focus of the W.P.A. as private employment still lagged pre-Depression levels. But as the war in Europe intensified with France surrendering to Germany and England fighting on, ramped up defence manufacturing began to produce private sector jobs and reduce the persistent unemployment that was the main face of the Depression. Jobless workers were absorbed as trainees for defence jobs and then by the draft that went into effect in 1940, when Roosevelt was elected to a third term. The Japanese attack on Pearl Harbour in December 1941 that started World War II sent America's factories into full production and absorbed all available workers. Despite the New Deal's many measures and their alleviation of the worst effects of the Great Depression, it was the humming factories that supplied the American war effort that finally brought the Depression to a close. And it was not until 1954 that the stock market regained its pre-Depression levels.

Looking at that quote from the Gov of the Bank of Ireland made me wonder just how much of the toxic debt the Irish state will have to pick up. Clear implication here in the UK if we ever get around to actually sorting the mess out! The National Asset Management Agency, NAMA, is to be the holder of Irish toxic debts and starting the clean up this week paid 8.5B Euros for assets with a face value of 16B Euros. These are bad property loans held by the banks and the hope is once cleared off their books the banking sector will get back to normal. This would seem a haircut of around 47% and going forward this might have to be raised considerably considering the other 81B which will find its way into the coffers of NAMA. Considering this and the Tier one capital requirement the Irish regulator has just announced for the banks there it looks like only the Bank of Ireland might get away with a minority state stake! It is worth noting that the capital requirements for the Anglo-Irish Bank are almost the same as how many government bonds Ireland planned to issue this year, that gives a pretty good picture of the size of the Irish economy. So it looks like Ireland needs to trade into profit whilst implementing a pretty steep austery drive notably in public finances, never very good bedfellows! At least the planned cuts announced straightaway in her austerity budget should add up to about 6% of GDP which shows willing. The markets seem to be accepting that and Irish bonds are trading in the region of +1.39% over Bunds which is within recent trading range.

Given the statement I made the other day regarding California and the similarities with Greece I have had a cursory look at the Californian situation in a bit more detail. California, New York and other states are showing many of the same signs of debt overload that recently took Greece to the brink — budgets that will not balance, accounting that masks debt, the use of derivatives to plug holes, and armies of retired public workers who are counting on benefits that are proving harder and harder to pay. Let's not forget pensions are debts in the same way as bond issues are and need to be repaid over time. If we look at California's stated debt that would seem manageable being about 8% of its total economy but if we perm in pensions, that figure more than quadruples to 37% according to independent statisticians. If we then take in unstated debt, the stuff which has been 'deliberately' hidden such as derivatives, then the graph goes off the chart! Clearly similarities with the Greek debt problem especially when the new Greek government came in and said their national debt had been misrepresented by the previous government by a factor of 3! Like Greece, California does have the option to default on its debts, the last state to do that being Arkansas in the Great Depression, but we have to consider the wider political union California is part of. Under the American Recovery and Reinvestment Act of 2009 the Treasury announced the implementation of the Build America Bond program. This is designed to provide the needed funding for state and local governments at lower borrowing costs. Quite a divergence to the EU offering for Greece! With California basically using IOU's for last year's operating costs giving it access to lower priced funds might be advantageous. However without full disclosure of its real debts, including its pension deficits, how can the unquantified fiscal black hole be filled? Seems a common slight of hand and one our own NCC use! Considering the default route the California's Centre for Economic Research has concluded, "Unfortunately, a formal bankruptcy is not the likely scenario. There is no provision for it in the law. Consequently, absent framework and rules of bankruptcy, the eventual default is likely to be very messy, contentious and political”. It would appear there is no clear way forward for California if she defaults. In fact the likelihood is actually making the situation worse as she has to offer larger and larger yields to attract investment. (The paradoxical situation already mentioned for Greece!) We do have to consider the Californian economy and its ability to repay the debt levels it needs. We already see public costs slashed in efforts to bring the deficit under control and of course the resulting populous unrest these measures always produce. With internal tax revenues dropping in the region of 25% and foreclosures still stubbornly high leading to further taxable losses hard to see how the state can trade its way back to solvency without some imposed special measures. Arnie might not 'be back' this time!

Getting back to the UK economy it may be worth looking at the QE program as it has now been 'stopped' for about 1 month. The BoE purchased some £200, 000 million of assets. Of this some £198,275 million was spent on UK government bonds. So very little of it actually went on UK corporate paper. This clearly differentiated us from the programme undertaken by the Federal Reserve in America. In March 2009, the Monetary Policy Committee announced that, in addition to setting Bank Rate at 0.5%, it would start to inject money directly into the economy in order to meet the inflation target. The instrument of monetary policy shifted towards the quantity of money provided rather than its price. But the objective of policy is unchanged – to meet the inflation target of 2 per cent on the CPI measure of consumer prices. Influencing the quantity of money directly is essentially a different means of reaching the same end, or so the MPC said. With inflation now at 50% over the agreed figure something hasn't worked. If we add in recent fuel price increases and exchange rate changes we can clearly see GGG's inflationary bubble starting. What the QE measures seem to have done is produce or hold up asset bubbles in themselves and in particular things like the stock market and residential housing prices. This would seem to have had the effect of using all of our reserves, and our children's, to get us back into the position which caused the fiscal problems in the first place? That might have more to do with the transient nature of the political class who seem to be behaving in the same way the music chair game went with the toxic debt bundles, as long as it's passed on it isn't our problem! The claimed effect was to resume normal banking operations and in particular restart bank lending. The figures don't support any claim that that has worked. The annualised 3 month figure for Feb was -1%, M4 lending figures were down £3.8 billion and we have all seen the mortgage approvals figures for Feb fell. The BoE have now half intimated their policy in this regard has had 'limited success.' One thing is for sure the BoE do have to get all of these UK bonds off their books at some point and any correction in the self inflected asset bubbles ain't going to help it!

There has been an interesting quote from the Governor of the Bank of Ireland on Anglo-Irish Bank' 'As the dust settles, it is clear that most of the damage in this crisis – reputational and financial – has been done by just one institution, Anglo-Irish Bank. Meeting the bank's net liabilities, in accordance with the guarantee of September 2008, has already cost the government more than €12bn and is likely to cost about €10bn more. This is a truly shocking figure, albeit one that is affordable for the state.' As time goes by we will be able to judge more fully if Ireland can afford this burden and there are clear implications for her nearest trading partner the UK.

As I have mentioned the Irish and their plan to get out of their fiscal troubles it may be worth considering them in relation to the UK. The Irish banking sector, like the Icelandic one, holds vast swathes of property in the UK with one estimate of £22billion, not an insignificant figure! The fact that a lot of this is commercial paper is worrying especially at a time of recession. At least the Irish grasped the nettle and implemented an austery plan but that only goes so far along the path to recovery. What should be disturbing to us is that their bank bale out and nationalisation will inevitably lead to a fire sale of assets at some point in the future. As part of the bale out they have taken an almost 50% haircut on asset prices and given the state of the commercial sector at the moment that might not be enough. If Ireland and Iceland for that matter do dump their commercial paper the knock on effects will spread to our domestic housing market. Not only that if HMG do manage to privatise their banking stakes our banks will have to carry out similar revaluations which will lead to losses and almost certainly drastic action to redress the imbalances they hold. After the much heralded election is there any reason to hold our interest rates at unrealistic levels, which seem only to protect home owners, when set against rising inflation? We seem far from out of the woods yet!

Greeks they invented gayness! Probably but they also gave us philosophy, reasoned thought, debate, science, government and its structure, Olympics, mathematics, etc, etc........so not just greasy kebabs! The whole point of this thread is to show that fiscal union cannot be enacted without political union, however much the federalists would like it to! Greece is paying a heavy price for this indulgence. There are clear similarities with the Californian situation however because they are part of a wide political union they have options Greece, and read any other of the PIGS, do not have. Ireland would seem to be at variance to this at the moment but the question has to be asked, will the end result be worth the suffering? So monsta next time anyone says we will be better off being in the Euro ask what mechanisms are in place when things go wrong. Clearly there has never been any serious thought given to that from what we see on an almost daily basis emanating from the Eurocrats!

Sym, I was just having a sideswipe at what I see as the Thatcher legacy in this respect. Personally I don't like labels; I prefer to judge someone on what they bring to the party not how they dance when they get there. Interesting point in the recent series Prescott did when he asked single mothers living on state benefits in sink estates which class they belonged to. The ones who replied all said middle class.

With this new 'bailout' package last week Greece now looks set to issue around 5 billion Euros worth of bonds. With her 10yr bond rates still stubbornly high, 6.18% can she afford the repayments? Going down this route would mean about 309 million Euros a year in interest payments, given the yield on the bond issue at today's prices. So we see Greece 'forced' into austerity measures by the ECB and having to pay around 11% of her public spending on interest payments. It would seem paradoxical to lend Greece the money it needs to invest and build its infrastructure at levels which jeopardise the needed growth to repay? Austerity measures are only one part of the changes and Greece needs to trade into profit to repay these loans. Looks to me like Greece should consider withdrawing from the euro and going down the strictly IMF route if only to get away from the self serving machinations of the rest of the euro members? At the very least that should take the needed fiscal and economic decisions out of the hands of her own leaders who seem hamstrung for political reasons.

One for the ladies and guys you can laugh too if your recognise any of this stuff! One day my housework-challenged husband decided to wash his Sweatshirt.. Seconds after he stepped into the laundry room, he shouted to me, 'What setting do I use on the washing machine?' 'It depends,' I replied. 'What does it say on your shirt?' He yelled back, ' Newcastle United !' And they say blondes are dumb... ---------------------------------------------------------------- A couple is lying in bed. The man says, 'I am going to make you the happiest woman in the world.' The woman replies, 'I'll miss you.' ---------------------------- 'It's just too hot to wear clothes today,' Jack says as he stepped out of the shower, 'honey, what do you think the neighbours would think if I mowed the lawn like this?' 'Probably that I married you for your money,' she replied. ------------------------------------------- Q: What do you call an intelligent, good looking, sensitive man? A: A rumour ------------------------------------------- Dear Lord, I pray for Wisdom to understand my man; Love to forgive him; and Patience for his moods. Because, Lord, if I pray for Strength, I'll beat him to death. AMEN ------------------------------------------------------------------------------------------------------------------------------- Q: Why do little boys whine? A: They are practicing to be men. -------------------------------------------------- Q: What do you call a handcuffed man? A: Trustworthy. --------------------------------------------- Q: What does it mean when a man is in your bed gasping for breath and calling your name? A: You did not hold the pillow down long enough. ------------------------------------------ Q: Why do men whistle when they are sitting on the toilet? A: It helps them remember which end to wipe.. ------------------------------------------- Q: How do you keep your husband from reading your e-mail? A: Rename the email folder 'Instruction Manuals'

Senior Health Care Solution So you're a senior citizen and the government says no health care or pension for you, what do you do? Our plan gives anyone 65 years or older a gun and 4 bullets. You are allowed to shoot 2 MP's and 2 Senior Government Officials. Of Course, this means you will be sent to prison where you will get 3 meals a day, a roof over your head, and all the health care you need! New teeth, no problem. Need glasses, great. New hip, knees, kidney, lungs, heart? All covered. And who will be paying for all of this? The same government that just told you that you are too old for health care. Plus, because you are a prisoner, you don't have to pay any income taxes anymore. IS THIS A GREAT COUNTRY OR WHAT?!

Such cynicism for ones so young...............