In the Sunday papers Ken Clarke is warning that there could be a double-dip, but it’s already started, Ken. Ken!
Ken Clarke, remember him? He was the Chancellor who steadied the public finances only for New Labour to come along and screw it all up by a £485 billion over-spend. Well, in the Sunday papers Ken is warning that there could be a double-dip, but it’s already started, Ken. Ken!
In the US, Obama has proved to be a bumma on the deficit, doing nothing at all to cut it. Instead, he increased it with that ill-timed Democratic dream of universal healthcare, his $700 billion Keynesian economic stimulus, his endless subsidies to the housing market. True, his much smaller bail-out of Motown, with its loans to the bankrupt GM, and its ’Cash-for-Clunkers’ saved Detroit, but it’s the housing slump, the stubborn unemployment figures, the consumer spending strike, and now the slump in industrial output that confirms that the double-dip – and more doses of increasingly ineffectual QE – is on its way in the world’s biggest economy.
As for the UK, it’s a foregone conclusion, as New Labour’s utter profligacy leaves the Coalition no room for manoeuvre on its appalling inherited deficit. Never trust a girl called Prudence, especially if she turns out to be a cross-dresser from Kirkcaldy.
So if the double-dip is on its way, where’s Banking Crisis 2, I hear you ask. (Yes, we’ve always said the two would reappear together). Well, look across to the less than Emerald Isle. Anglo Irish Bank’s bail-out was set to rise to €25 billion two weeks ago; now it’s up to €35 billion! “We have been in denial for two years already,” they now cry ignoring the last two weeks, as the other PIGS remain firmly rooted to the exact same spot!
The Irish deficit is set to rise to 35% of GDP; when they gleefully signed up to the €uro, they agreed that their deficit should only be 3% of GDP: you don’t have to have your 11+ to work out the simple arithmetic on this shenanigans of an overshoot.
An official at the Irish Finance Ministry said they they would not resort to the EU €450 billion stand-by facility: “That would be to lose all economic sovereignty!” What an idiot: they lost that when they signed up to the €uro in the first place, like the unmarried virgin who got pregnant and was asked what the father looked like, replied: “I dunno’, he didn’t take his hat off!”
Remember who said the UK could not survive outside the €urozone? Why, the man with the Hush-Puppies, a pint of Lager and a Castella, old Ken himself, who hadn’t even read the Treaty of MassTrick and signed the Dublin Security and Stabilisation Pact without reading that either: what a serial Saga Lout! (Along with Heseltine, Major, Hurd, Lawson, Meddlesome, Kinnock, Prescott and other assorted luminaries – remember when that lot shared once a New Labour platform with Tony B.Liar to promote the €uro?)
So, who’s responsible for the Second Dip and Banking Crisis 2? In the US, it was undoubtedly the greed of the bankers coupled with the Fed’s policy of choosing not be responsible for pricking market bubbles, whilst it left interest rates at ridiculously low levels for over three years.
In the EU it was primarily the politicians, however, who introduced the €uro for the political aggrandisement of their constructivist folly, but who overlooked the obvious economic consequences, where the ‘One-Size-Fits-All’ meant negative real interest rates in the PIGS, as real interest rates, as with the Fed, were held far too low for too long to allow accommodation of German re-unification.
Have another pint on me, Ken, and I’ll tell you all about it, and how it lead to the Double-Dip and Banking Crisis 2. Don’t worry, Ken, you won’t have to read a thing, just have a Castella with the Pint and block the centre of your head, so that what goes in one ear doesn’t come out the same ear seventeen years too later. Otherwise, you might as well apply for the job of turning a Celtic Tiger into second-hand Bubble-Gum overnight, although an Irishman – or a Greek or a Portugesa or a Spaniard – would probably beat you to the post.