The Goblin King and The Badger never tire of telling us that "Britain is well placed to withstand a recession" and as they have lied about everything else, we automatically assume it is not true.
But think about it - if the exaggerated/simplified view of the UK economy is correct, perhaps in a funny way they are right.
The exaggerated/simplified view is that the UK produces nothing, and that our economy was based on a massive credit bubble/property price bubble. We borrowed shed-loads of money on the back of rising property prices and spent it all on cars, flat screen TVs, holidays etc, all financed by loans from abroad. On the other hand, the hard-working exporting countries like Germany, China and Japan have been churning out all these goodies and selling them to us on credit.
This model has now ground to a halt. But seeing as most of our spending was 'discretionary' (once you have a car and a flat screen TV, you don't need to buy another one for ten or twenty years, and a holiday in the sun, while welcome is hardly an essential) we can easily tighten out belts for a while. On the other hand, Germany, China and Japan have now lost an important export market. Faith in the ability of UK borrowers has collapsed and with it our currency, so the amount that we will have to repay them is a lot less (in their terms) than what they expected.
So we now have received a twenty-five per cent retrospective discount on all those goodies, and what do Germany, China and Japan have to show for it?
Meh
1 hour ago
3 comments:
If nothing else they will have a long memory.
Japan has a devastated and polluted countryside.
MW
Slight problem is how we'll pay for our food and energy. Now that our primary service industry has been comprehensively buggered by incompetent regulation (via Gordo's tri-partite dildo-fest) and incontinent lending (funded by incontinent borrowing) we provide very little of what the world requires. The upshot is that we will fail to export enough to feed ourselves or keep ourselves warm. We haven't been self-supporting in food production since, what, the mid 19th century and AFAIAA we've already returned to being a net importer of gas (as well as electricity generated by - horrors! - nuclear means in France).
The "solution" will be rationing (not by price but by fiat). Whoever wins the next election the socialists, whether red or blue, will be in charge and socialists generally end up running the better sort of command economy (mind you, they've had most of the experience). Whatever, it won't be the Germans, the Chinese or the Japanese who'll be starving or waiting for the wind to blow so they can illuminate their empty larders.
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