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Voter Backlash Coming Against Labour Government Economic Incompetence

Politics / UK Economy Oct 15, 2008 - 07:05 AM GMT

By: Nadeem_Walayat

Politics Best Financial Markets Analysis ArticleWhilst Gordon Brown continues to enjoy and revel in the financial armageddon bounce, that looks set to ensure that the leadership challenge has been delayed until September 2009. However as the UK economy plunges into recession increasingly voters will become outraged at the Labour party effectively doubling the national debt by an additional £500 billion of which at least £90 billion is money lost, never to be recovered. After all this is what socialism is all about i.e. to stop bankrupt companies from going bust, whilst ratcheting up enormous amounts of debt.


As voters are met by City and Local Authority demands for payment of council tax bills, from the same incompetent councils that have lost £800 million in bankrupt Icelandic banks now demanding that the Treasury recompense them. Which the government will do through the back door, however if the councils are recompensed then so should all corporate depositors.

Whilst the blame for the current credit crisis is being placed squarely with greedy banks who's employees sought to bank huge bonuses by ratcheting up the leverage deployed on highly speculative investments that were valued off the official regulated exchanges using voodoo maths in the support of hypothetical valuations and profits that in reality never existed which is effectively tantamount to fraud, that left the biggest banks in the land as mere hollow shells.

However the blame also squarely lies with the Labour government, Bank of England and FSA for the 10 year loose debt binge that is now in the process of unwinding. The government fuelled the eventual outcome of the current crisis through their own repetitive incompetent actions right from the very beginning when Gordon Brown as the chancellor had the brilliant idea to sell more than half of the nations gold reserves at $250 an ounce right at the very bottom of the gold bear market which has soared to new all time highs in sterling terms barely a week ago and stood at $900 in dollar terms.

Voters need to and will punish the labour party for economic incompetence, that is not to say that the Conservative party would have proven any better in government as its city backers would probably have demanded an even laxer regulatory regime then which has transpired and thus an even bigger economic bust then the stagflationary deep recession that the economy is plunging towards as I warned of 6 weeks ago - Credit Crisis Phase II - The Economic Crunch

Whenever the election comes, the incumbent will be punished that will herald in a change of government regardless of who leads the Labour party for things are only going to get worse over the coming years as unemployment soars and families fall behind on their payments as costs soar. Gordon Brown blew his one and only chance when he bottled out of the October 2007 election as I voiced at the time. Gordon Brown 's bottling out of calling the October 2007 general election

Remember to subscribe to our FREE weekly newsletter for the Stock Market Crash Investment Strategies as well as the Real Secrets of Successful Trading on the 21st anniversary of 1987, that are to be emailed later this week.

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

Copyright © 2005-08 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 is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 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.

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