Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21
Gold Price Big Picture Trend Forecast 2021 - 13th Jan 21
Are Covid Lockdowns Bullish or Bearish for Stocks? FTSE 100 in Focus - 13th Jan 21
CONgress "Insurrection" Is Just the Latest False Flag Event from the Globalists - 13th Jan 21
Reflation Trade Heating Up - 13th Jan 21
The Most Important Oil Find Of The Next Decade Could Be Here - 13th Jan 21
Work From Home £10,000 Office Tour – Workspace + Desk Setup 2021 Top Tips - 12th Jan 21
Collect a Bitcoin Dividend Without Owning the King of Cryptos - 12th Jan 21
The BAN Hotlist trade setups show incredible success at the start of 2021, learn how you can too! - 12th Jan 21
Stocks, Bitcoin, Gold – How Much Are They Worth? - 12th Jan 21
SPX Short-term Top Imminent - 12th Jan 21
Is This The Most Exciting Oil Play Of 2021? - 12th Jan 21
Why 2021 Will Be the Year Self-Driving Cars Go Mainstream - 11th Jan 21
Gold Began 2021 With a Bang, Only to Plunge - 11th Jan 21
How to Test Your GPU Temperatures - Running Too Hot - GTX 1650 - Overclockers UK - 11th Jan 21
Life Lesson - The Early Bird Catches the Worm - 11th Jan 21
Precious Metals rally early in 2021 - 11th Jan 21
The Most Exciting Oil Stock For 2021 - 11th Jan 21
Financial Market Forecasts 2021: Navigation in Uncharted Waters - 10th Jan 21
An Urgent Message to All Conservatives, Right-Wingers and Patriots - 10th Jan 21
Despite Signs to the Contrary, Gold Price at or Near Top - 10th Jan 21 -
Ultimate Guide On The 6 Basic Types Of Index Funds - 10th Jan 21
Getting Vaccinated at TESCO - Covid-19 Vaccinations at UK Supermarket Pharmacies and Chemists - 10th Jan 21
Cheers for the 2021 Stock Market and These "Great Expectations" - 9th Jan 21
How to Plan Your Child With Better Education - 9th Jan 21
How To Find The Best Casino - 9th Jan 21
Gold Is Still a Bargain Buy - 8th Jan 20
Gold Price Set to Soar as Hyperinflation Looms - 8th Jan 21
Have Big Dreams? Here's How to Pay for Them - 8th Jan 21
Will the Fed Support Gold Prices in 2021? - 8th Jan 21
Stocks trading strategies for beginners - 8th Jan 21
Who is Buying and Selling Stocks in 2021 - 8th Jan 21
Clap for NHS Heroes 2021 as Incompetent Government Loses Control of Virus Again! - 8th Jan 21
Ultimate Gaming and Home Working PC System Build 2021 - 5950X, RTX 3080, Asus MB - Scan Computers UK - 7th Jan 21
Inflation the bug-bear looking forward through 2021 - 7th Jan 21
ESG ETF Investing Flows Drive Clean Energy to Fresh Highs - 7th Jan 21
5 Financial Market Surprises in 2021 - 7th Jan 21
Time to ‘Reset’ Your Investment Portfolio in 2021? - 7th Jan 21
Bitcoin Price Collapses almost 20% at the start 2021 - 7th Jan 21
Fed Taper Nervous Breakdown - 6th Jan 21
What Will the U.S. Dollar Ring in for 2021? - 6th Jan 21
Stock market frenzy- Ride the bandwagon but be sure to take along some gold coins - 6th Jan 21
Overclockers UK Custom Build Gaming System Review Heat Test and Final Conclusion - 6th Jan 21
Precious Metals Resuming Bull Market, Gold, Silver, GDX Trend Forecasts 2021 - 5th Jan 21
Trump’s Iran-COVID-Gate Anniversary  - 5th Jan 21
2021 May Be A Good Year For The Cannabis / Marijuana Sector - 5th Jan 21
Stock Market Approaching an Important Target - 5th Jan 21
Consumer Prices Are Not Reflecting Higher Inflation; Neither Is The CRB - 5th Jan 21
NEW UK Coronavirus PANIC FULL Lockdown Imminent, All Schools to Close! GCSE Exams Cancelled! - 4th Jan 21
The Year the World Fell Down the Rabbit Hole - 4th Jan 21
A Year Like No Other for Precious Metals… and Everything Else - 4th Jan 21
The Stocks Bull Market is Only Half Completed - 4th Jan 21
An In- Depth Look At Gold Price Trend - 4th Jan 21
Building America Back After a Dark Covid Winter - 4th Jan 21
America's Dark Covid Winter Ahead - 4th Jan 21
Buy a Landrover Discovery Sport in 2021? 3 Year Driving Review - 3rd Jan 21
Stock Market Major Peak in Early April 2021 - 3rd Jan 21
Travel and Holidays 2021 - Flight Knight Cabin Bag Review - 3rd Jan 21
�� Happy New Year 2021 Fireworks and Drone Light Show from London and Sheffied - BBC�� - 2nd Jan 2
The Next IMMINENT Global Catastrophe After Coronavirus - 1st Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

UK Pre-General Election Pre-Budget Report

Politics / UK General Election Dec 10, 2009 - 01:10 AM GMT

By: Nadeem_Walayat

Politics

Best Financial Markets Analysis ArticleThe pre-budget report (PBR) was pretty much inline with my earlier expectations as I highlighted in the article (Alistair Darling's UK Election Give Away Budget Crippled by Debt and Liabilities ) :


  • The poor and working class will be bought off and relieved.
  • The higher rate tax payers will be fuming and thinking of emigrating.
  • The Bankster's will think of new ways to dodge paying their fair share of tax with representatives of the British Bankers Association doing the rounds on TV news channels with hankies out crying poverty.

The PBR in a nutshell has delayed the pain for voters until AFTER the next general election so as to ensure the Labour Party maximises the number of votes. The Chancellor did nothing to cut spending and pay down the huge and unsustainable deficit, it is only after the next general election that we will find out how and to what extent the next government will attempt to cut the horrendous budget deficit that currently stands at 15% of GDP and 13% for next year which remains on target to accumulate an additional £510 billion over the next 5 years as discussed earlier in the earlier in depth analysis Britain's Inflationary Debt Spiral as Bank of England Keeps Expanding Quantitative Easing.

The Labour party intends to carrying on boosting public spending by an additional £31 billion coupled with tax rises which sets the opening scene of the inflationary mega-trend to unfold as the Labour government's actions are the complete opposite to what it should be being implemented i.e. Labour is boosting the size of the unproductive black hole public sector whilst at the same time crippling the private sector with huge tax rises whilst at the same time FAILING to cut the budget deficit.

This now sets the scene for Britain to start entering a stagflationary environment during the second half of 2010, with all of the consequences associated with higher inflation of a weakening economy, higher long term interest rates and eventually short-term interest rates as a consequence of foreign investors dumping sterling assets and hence sending the British Pound lower in relative terms (all fiat currencies are devaluing against hard assets).

Bankster Bonus 50% Tax Election Publicity Stunt

The big headline item in the PBR was the 50% bank bonus tax on bonus payments over £25,000. Unfortunately the tax is only proposed for 1 year and therefore leaves many loopholes for bankster's to once more escape paying their fair share in taxes, as any of the profits generated by the bailed out bankrupt banks is as a consequence of government interventions i.e. money printing and low interest rates for the purpose of bankrupt banks to rebuild their balance sheets and not to pay the artificially engineered profits out as bonuses. Loopholes include bringing forward bonuses or delaying bonus payments until the next tax year, which therefore means very little will be actually raised by this tax.

The bankster's representatives much as expected reacted with anger and were doing the rounds on British TV and write ups for the gullible mainstream press that lapped up their scare mongering of an exodus of thousands of bankster's from the city of London, though they failed to say where to ?

The facts are clear and irrefutable in that the bankster's have saddled tax payers with liabilities of £850 billion according to the National Audit office, which is near double the total tax receipts from the banking sector during the life time of the Labour Government. So in effect for every pound the bankster publically paid in taxes, they have saddled tax payers with twice as much during the bank bust.

The chancellor also raised his budget deficit target for the Financial year from £175 billion to £177.6 billion. Which might not sound like much of an increase, however also slipped in on the quiet during the day was news out of the Debt Management Office that Government would actually borrow £225 billion this financial year thus putting an even greater strain on the Gilts and Interest rate market then the headline budget deficit figure implies.

Alistair Darling Cloud Cuckoo Land Growth Forecasts

Alistair Darling also basically admitted that he is clueless at making forecasts given the contraction of 4.75% for 2009 against his forecast of -3%, though the rest of the mainstream academic economists were similarly way off the mark in terms of making economic forecasts. The growth forecasts for the coming years are equally optimistic as they do not even take into account the sharp drop in tax revenues that followed April 2009. Alistair Darling is forecasting 2010 growth of 1.5%, 2011 of 3.5% and 2012 of 3.5%. Whilst 2010 growth of 1.5% is achievable, however 3.5% for 2011 and 2012 is completely ridiculous which has no fundamental supporting basis as accumulated debt will force the next government to CUT public spending by as much as 10% per annum or more than £60 billion. Especially as the government is going hit companies hard by a series of tax rises over the coming years.

The immediate impact of the pre-election pre-budget will be / is being felt in the financial markets as sterling assets are marked down i.e. the British pound fell followed closely by stocks and government bonds. The key longer-term impact of which will continue to be on sterling and government bonds as the spread is expected to widen further between Gilts and foreign 'safer' bonds such as German Bund's.

Therefore the UK economy remains on target towards drifting towards a double dip economic depression triggered by necessary public sector spending as originally projected in February 2009 (17 Feb 2009 - UK Recession Watch- Britain's Great Depression?) with the key difference this time being that the second leg will be coupled with the inflationary consequences than that at the start of the first leg of the Britians Great Depression during 2008-09 primarily due to the wide gap between government spending and revenues that will trigger much more quantitative easing aka money printing to monetize debt.

You can read the full text of Alistair Darlings Pre-budget report here.

For more on my inflationary mega-trend ensure your subscribed to my always free newsletter, especially as I converge towards including major forecasts for all key markets for 2010. I.e. what will become of the stocks stealth bull market that has soared during 2009 ? What about the debt fuelled UK housing market and economic bounce.

Source:http://www.marketoracle.co.uk/Article15696.html

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 400 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules