I remember when the tsunami struck Thailand in 2004, a young girl of twelve had been listening carefully to her geography teacher, who had explained how tsunamis happen. When the sea retreated from the beach, she warned her mother what was to happen next and they and their friends all survived having enough time to get out of the way. Most others had no idea and thought it quite fun to observe fish stranded on the beach as the sea got sucked outwards from the shore.
The current attitude of Gordon Brown and Nick Clegg remind me exactly of those poor people playing on the beach as a fast-approaching wave would soon make their deaths inevitable. In total ignorance they were lost. Brown and Clegg, though, are not totally ignorant about the effects of debt. While markets are relaxed, people will go on lending at a nice low rate. But if politicians borrow too much, and if they show that they are not behaving responsibly, the change in the markets will be fast, brutal and lethal just like the tsunami.
It will not be a tsunami of water though on this occasion, but one of fear.
Only George Osborne seems to realise that the situation is potentially exceedingly dangerous, and that confidence in Britain and other countries in an equal mess could collapse. Markets move in waves, just like the sea. Waves of hope and waves of fear. The world has not seen a large wave of fear for a very long time. Clegg and Brown are behaving in exactly the way which will bring one crashing over this country. No one can know when it will come, but make no mistake. When it happens, it will be entirely the fault of politicians who bid against each other to borrow until the confidence of markets collapse.
You might have thought better of Vince Cable. But he too shows no realisation of the terrible fate that he is gambling with. Even a 12 year old girl who had listened well to an economics lesson could warn him. Debt can dry up entirely if confidence is collapsed. The signs of such a tsunami are already present, and have already rocked the world once in 2008. Why they are so sure it will not happen again when there is so much deception in government accounts around the world, defeats me.
It’s time to get off the beach is my advice. Osborne is the only one who seems to realise that this a dangerous game, which Brown, Darling, Clegg and Cable are playing.
MY COMMENT ON IAIN DALE – If politicians duck out of taking responsibility for debts, markets inform them soon enough.
This pre-election bidding war is like a game of underwater hockey, taking place while a tsunami approaches.
These socialist fools will be blown away. The British people, who have clearly not yet learned the lessons of debt, will soon be learning them well enough.
Clegg can cluck all he likes. The coming shock will take generations to forget. Clegg will be forgotten within a week.
FT – Clegg’s speech report. Labour were “in denial” over the need for cuts, while the Tories were running a “political version of a protection racket” in stoking fears of financial calamity in the wake of a Tory defeat, he added.
THE CONSEQUENCES OF STATE INSOLVENCY –
OT – just a wee anecdote on Greece, my best friend’s hubby is Greek and, due to him being terminally ill, she’s been talking to the family in Athens quite a bit these last few days. Apparently the ones that work in the public sector, mostly health, haven’t been paid since early January. No wonder they are out on the streets.
by Kristin March 15th, 2010 at 3:13 am Political Betting comments.
It is worth pointing out to State Sector workers hoping to be paid, they will have more chance of the pay cheque arriving if they vote Conservative. If Brown wins again, the same fate will happen to Britain as Greece. The IMF will be called, but with so many state insolvencies all happening at once, will the IMF be able to cope? The reality of Britain’s finances is far worse than has yet leaked out in the media, as I have been blogging for months. When markets choose to notice this fact, that will be the moment of maximum danger. If Cameron is in Downing Street, our chances of surviving the coming crisis will be greatly enhanced.
IN FIGURES – the sum total of Britain’s public, private and corporate debt is 400% of GDP. If interest rates are kept low, these sums can be afforded. But if interest rates were to rise significantly, the load of paying it would crack the country Greek-style. It is essential that Britain has leadership which inspires confidence, brings wasteful spending back under control and rebalances the economy for growth, based on business innovation, not on pork-barrel. This is a job for Osborne and the Conservatives.