The UK’s coalition will no doubt blame the eurozone, albeit with some justification, as the main cause of its missing its own OBR-approved targets
Just as America and China show some signs of tentative recovery, the eurozone continues to plunge. Even the ECB has said the eurozone GDP will decline by 0.1% to 0.9% in 2013, which allows for a wide margin of error, to say the least.
The decline will probably be even more, however, as even the mighty German economy contracted in Q4 2012 by a significant 0.6%, which was also the average for eurozone decline, as Club Med fell out of bed in the middle of its siesta.
In an interesting symmetrical correlation, eurozone unemployment in 2012 rose by 1.9 million to 11.9%, at 19.1 million. Unemployment stands at 25 million throughout the wider EU. It defies description that the unelected bureaucrats in Brussels sought a 6% rise in their own budget, when it is clear that it is their constructivist folly that is the root of the problem in the first place – namely the flat-earth euro, the new enemy of the European democracies and its peoples.The UK’s coalition government will no doubt blame the eurozone, albeit with some justification, as the main cause of its missing its own OBR-approved targets. Its main problem however – apart from the Lib Dem cries for ‘fairness’ regardless of the cost – is that it misunderstood where the post-WW2 global economy stood in relation to the Kondratieff Long-Wave cycle namely, looking at the last dip of the K4 downward slide to 2018.
IT ASSUMED, WRONGLY as it happens, that having got rid of New Labour just as it had spent the last of other people’s money and maxed out on every credit card known to man, that a normal short-wave rebound was in the offing. (So did Obama’s Democrats.)
It was hardly ever likely to be that simple anyway, after the bankers had busted the global banking system, as the politicians chased their own profligate deficits even higher by bailing out the banking dens of thieves with taxpayers' money, and thereby creating sovereign debt crises of their own, on top of the bankers’ bonus-driven excesses.
And now the banks are being forced to deleverage their over-stretched balance sheets, still stuffed with unprovided-for losses, by new and untimely regulatory capital ratios, with the result that the real economy, traditionally financed by savings, hasn’t even got the strength to get out of bed.
No wonder there is no growth left in the old G7 economies – all the hard-earned cash has been stolen by the greedy bankers or squandered by the reckless politicians. Now, try and get out of that one, Mr Houdini!
How to do it, that is the question… There is only one way for the UK to do it right now: slash taxation and government expenditure, and stop all inflationary QE, Mr Osborne, on 20 March, or you risk getting everything else wrong – and quite quickly too.