Its your fault stupid

As if there is not enough going on we now have to teach the Chancellor of the Election how the economy works.

Having spent recklessly over the last 12 years to make sure that they held onto power the current Chancellor and Prime Minister are now trying to avoid reaping the whirlwind of their own mistakes by blaming everyone else. This morning its the banks those nasty naughty institiutions that we could not live without, neccesitating the expenditure of large sums of money to prop them up, but who have turned all ungrateful and are not throwing money away on small business simple because the Government asks them to. This is the Government who have shown how to lose money propping up well nothing really other than the employment rates in the civil service, these boys know how to buy votes if nothing else.

The reason we have low base rates, 0.5%, but high lending rates, 5 to 15 percent is really quite simple. The people with money to lend are looking down the road to see what returns they will need in the future. Because the Government has for the last 14 years, yes the Torys were not the best at the end either, spent like there was no reason for repayment to ever be considered.

Now comes the problem, with the economy in collapse, and the reasons are various but generally cyclical in nature though not helped by some devastating greed, the money needed to simple stay in place is simple not there, as revenues from Tax and Customs collapse but the costs, in terms of social payments to the unemployed plus the money so recklessly spent on attempts at stimulation added to a war that is going to keep on costing more, are rising steeply.

The IMF, the World Bank and the ratings agencies have seen through the problem and are warning that the perfect storm is about to descend on the economy and the smart money has already read the script.

The only way out now is inflation and the inexorable rise in interest rates that accompanies it. If the spread at this point is between 4.5 and 14.5 percent you can see where we are going. Risk money over a longer period is costing over 15% meaning that we can expect interest rates to climb as Government borrowing increases but the Governments ability to repay the borrowings is severely constrained as the economy is severely weakened and unable to sustain the borrowings.

And we are not out of the woods yet, I am willing to bet that the Prime Minister will attempt a short term stimulation and increase further the number of civil servants reminding them at the same time that the opposition will reduce payrolls without adnitting that he will have to do so as well.

These are the times I fear for the country.

Where are they now?

The death of the last Tommy from the First Great War starts a thought train that leads so easily to today's problems and solutions.

In the first and second world wars we had as today we have a generation who through either the thirst for adventure, or nationalism, or in a effort to improve themselves financially and socially saw enlisting in the army and fighting for their country as a way through and as today they werelet down by a demogogic ruling political class who seem to be more interested in what they made for themselves rather than what they can do for their country.

Flanders fields cost us a generation of leaders and several generations of leadership, a situation that was exacerbated by the Second World War where once again those who were driven by nationalistic pride with its inevitable attachment of a sense of duty were the bulk of those lost.

To my mind, politically, those generations saw their peak with the resignation of Lord Carrington over the Falklands Crisis and war, the actions of a man of principle.

Then we have today, a Prime Minister too scared to go to the country and putting his personal vanity and greed above the national interest leading a political party that now puts its aims and personal funding again above national interest and when one Minister, Purnell, resigns over principle he is mocked and scorned and our beloved leader proceeds to bring back to government those who have been rejected, indulged in what can only be called corruption, or are party hacks, Kinnochio, whom Gordon is scared of.

While this sounds like I might want to go and top myself there is a bright light in the tunnel, its to be hoped its not a train going the other way but rather is the first signs of a new spring. To talk to my sons friends who are in the army and to listen to the new MP for Norwich North makes me think that this just might be the next Great War generation who will lead us out of thew wilderness and back into a world of principle and discipline. God knows we need it.