Britain at the Pawnbroker?

Discussion in 'Current Affairs, News and Analysis' started by dammatt, Nov 7, 2006.

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  1. A great ship, the Maersk Emma, docks in Felixstowe and unloads millions of pounds worth of goods, and returns to China with empty containers and a few pieces of scrap plastic.

    "We are not exactly giving them much back, are we?" says an onlooker. Yes we are - we are giving them millions of I.O.U.s. However, the great question is, how long will the Chinese (and Japanese and Koreans) accept our I.O.U.s, before they refuse to trade with us and demand a few repayments?

    And what will happen when the great day of reckoning comes? Answer - a crashing pound, spiraling inflation, sky-high interest rates and millions of people going bankrupt and loosing their homes. This can only result in unemployment, hardships, poverty, civil unrest and a great wailing and gnashing of teeth. Is any other outcome possible?

    Gordon Brown a great chancellor? I think not. Anyone can run a household, a business or a country on never ending loans and debts, the problems only arise when all those I.O.U.s needs repaying. No doubt Brown was hoping that Labour would loose the last election and it would all be someone else's problem, but they did not and so it is not.

    Less of the Iron Chancellor, and more of the Three Brass Balls Chancellor.

  2. Gordon Brown is by no means the golden boy that he is made out to be, notably by the BBC. By Labour standards he is better than most of their previous Chancellors because the country wasn't bankrupted within 4 years of Labour government but he has made a number of bad calls.

    The most obvious of these is the treatment of divident income by pension funds. The effect is not known, most estimated have it at 35bn per year but some estimates have been put as high as £100bn.

    Secondly the decision to announce in advancce that UK gold reserves would be sold and replaced by holding of Euros. This depressed the gold price so that it was sold at an all-time low price

    Finally that the basis of inflation calculations was changed from RPI to CPI (as a sop to the pro-Euro lobby). The CPI excludes property taxes and mortgage interest from the cost of living. This means that inflation is approximately 5.8% rather than the 2.4% on official figures (Sept).

    On the other hand, he DID give the Bank of England the independence. So his postive contribution was over in week 1
  3. Having studies Economics I'd agree and say there is considerable* opinion in saying that far from prudent Brown has been incredibly lucky (so far).

    He inherited an economy on the upturn, and has benefited from windfalls, such as the sale of 3G licenses.

    Giving control of interest rates to the Bank of England has been successful - but that was hardly Brown's idea. I remember it being floated around the time of Lamont. And of course, unlike Lamont, if/when things go pear shaped the buck can be passed on.

    Ironically when Brown becomes PM his Chancellor is going to have to clean up his boss's mess.

    * From The Econimist printed edition, Sep 29th 2005, The chancellor's once solid reputation is increasingly at risk Available from:
  4. And if we would have problems, spare a thought for our US cousins. The US deficit to China now running at how many trillion dollars? - I figure that Beijing will probably accept a few nukes when the US defaults.

    Awaits incoming...
  5. I think we are paying them with Airbus wings, the chinese have just bought the biggest batch of Airbus planes yet.

  6. oldbaldy

    oldbaldy LE Moderator Good Egg (charities)
    1. Battlefield Tours

    On Saturday 4th November 2006, the Port of Felixstowe welcomed the inaugural call of the record-breaking 'Emma Maersk', the world’s largest container ship.

    With a declared capacity of 11,000 TEU, the 'Emma Maersk' is able to handle a significantly greater number of containers than any other ship currently in operation. It has a length of 397 metres, over 31 metres longer than the next longest container ship, the Maersk ‘G’ classes, and a width of 57 metres, 15 metres wider than any other container ship. If the containers on board were lined up end to end, they would stretch approximately 42 miles.

    Built at the Odense Steel Ship Yard in Denmark, it has a gross tonnage of 156,907, and a maximum draught of 16.5 metres. Its engine yields 110,000 Horse Power, equivalent to more than 1,000 saloon cars.

    The vessel is longer than the height of some well-known landmarks, including the Eiffel Tower, which measures 320 metres, and the Empire State Building, at 381 metres. It is four times the length of a normal football pitch, and has arrived at the Port of Felixstowe during the peak pre-Christmas season, laden with goods for the High Street. Amongst the gifts on board likely to be filling stockings this Christmas are Playstations, MP3 players and digital cameras.

    Chris Lewis, Chief Executive Officer of Hutchison Ports (UK) Limited, which owns of the Port of Felixstowe, commented:

    “The Port of Felixstowe, the shipping community, and shipping enthusiasts have all been waiting in anticipation for some time to get the first glimpse of the 'Emma Maersk'. A vessel of this size will be a spectacular sight - dwarfing its competitors - and we are more than delighted to welcome the 'Emma Maersk' here in Felixstowe.

    He continued:

    “Vessels of this scale have been predicted for some years now, and we are finally starting to see them materialise. This proves that containerised trade is growing at an amazing pace, and underlines the need for new facilities such as at Felixstowe South and Bathside Bay to meet this growing demand.”

    Overall, the 'Emma Maersk' has a deadweight approximately 40% greater than its nearest rival, the Xin Los Angeles, operated by China Shipping Container Line. This ship was the previous holder of the world’s largest container ship accolade, when it called at the Port of Felixstowe in July.

    Employed on the AE1 Service, the 'Emma Maersk''s service rotation includes: Bremerhaven, Rotterdam, Algeciras, Singapore, Yantian, Hong Kong, Tanjung Pelapas, Felixstowe, Rotterdam, Bremerhaven, Gothenburg.

    An awful lot of Christmas pressies on that beastie.
  7. Are you completely off your rocker Danmatt?

    When was the last time you popped down the High Street and were given free Japenese, Korean or Chinese goods? They may be cheap - but they ain't buckshee. IOUs for fcuk sake! What planet are you on? Those goods have been bought and paid for. End of.

    Now, if you want to talk about the balance of payments... That's a different matter.

    There's one simple solution to this. Eliminate the minimum wage and unemployment benefit and make it mandatory for everybody to work unless completely incapable due to major injury. ie get the work-shy off their fat arrses. Low and behold, with significantly lower wage bills, UK factories will be able to churn out products at a competitive price and we won't need to buy the cheap Asian tat.
  8. .

    Hmm, you don't understand Middle Eastern politics, and you also don't understand international finance!

    The pound in you pocket is NOT a method of payment, as many people seem to think. Get that £20 note out of your pocket, Merkator (mind the moths), and read what it says under the banner headline.

    It says "I Promise to Pay the Bearer On Demand The Sum Of...". In other words the £20 not is NOT a settlement of your account, it is a Promisary Note, it is merely a (tranferable) IOU (effectively Fiat money). Same with international finance. When we pay with all those wonderful pounds, they are all just IOUs - millions and millions of them.

    Now some IOUs almost act like a payment, like all those petro dollars that never went back to the USA (well, not yet anyway). But in normal terms those IOUs have to be settled with real exchange in a reasonable time span, and if that is not possible the value of the IOUs drops rapidly (a currency crisis).

    And regard Chinese goods, I can now by complex electronic and other goods for less than a tenner. That is less than two hours labour in this country, and that is not including the cost of the factory buildings, rent, heat light, office staff, raw materials and transport. Bearing in mind we paid for that item with a worthless IOU in the first place, I call that free.

    Will our A380 wings (and engines) settle all these IOUs? Well, our import bill from China this year will be about £20 billion. Now, if China takes 20 A380s, that is about £3 billion total expenditure. But only half of that is to the UK, and payment will be spread over 5 years. That's err, £0.3 billion a year.

    Sorry, thats £19.7 billion not yet paid for. See the problem?

    (And yes, the USA IS in a worse position that us.)

  9. and why would they give us the products for I.O.Us??

    i argee with merkator, scrap the unemployment benifits all, (apart from the medicaly incapable) and make people work. this will make the country's econamy grow like hell!!

    people will have more spending power thanks to lower taxes and the goverment dont need to spend £20,000,000,000 on benifits!!!

  10. Lets get rid of all the benefits to single mothers\fathers aswell (except in exceptional circumstances).

  11. And you do?

    Lesson number 1: What is money?

    Lesson number 2: Trade

    Lesson number 3: Exchange Rates

    We can move onto more advanced topics later.

  12. That story about banknotes only being IOUs because of those historical words is just the sort of story that I can hear down the pub told by the guy in the panama hat, wax jacket and shooting stick. All the accoutrements of education and knowledge, a deliberate attempt to impress with fancy words with a grain of truth - but, nevertheless, sadly only wibble spilling from the mouth.

    What are the 'words' again? "I Promise to Pay the Bearer On Demand The Sum Of..."

    So what happens? You turn up at the Bank of England and you demand you £20 on the basis of this IOU/promissory note. What do you get? Probably another £20 note, or 2 10s!!! :D Ask yourself Dammit, what else is the Bank going to give you? £20 is £20.

    As Passing Bells suggests, you need to spend a little more time with your studies.
  13. PB-instead of claiming the high ground against Dammatt and then linking to Wikipedia (education by consensus/lethargy/apaththy) with its 1001 links, why not explain in a clear, concise manner why Dammatt is wrong?
  14. msr

    msr LE

    It doesn't matter - countries are not companies and you can't compare them.

  15. Because I'm a lazy bastard, who can't be bothered to reinvent the wheel, when an easily referencable, publicly available, document does it for me.