Someone who saw it all coming…

Why the fuck wasn’t this guy in our government back in 2007?

One of his comments on one of his own blog entries:

Mountjoy wrote @ 7 September, 2007 at 8:39 am

Well, I have to admit that part of my motivation is that, as an economist, I can see where the housing market is going … sub prime mortgage crisis in the US … Bank of England buffoons tinkering with the interest rates (still on hold yesterday … swines) … Gordon’s tax and grab economic policies haven’t yet come home to roost.

I well remember being clobbered when Brown raised tax – i.e. National Insurance – some years back, so I don’t intend to get clobbered again when the bubble bursts.

At any rate, I need to move in the next 6-9 months and I might as well get it on the market now. I’m not going to be able buy again immediately where I’m llikely to move to, which will give me some time to see what exactly is going on in the market.

So, why wasn’t he advising the government on financial matters?

Ah…he’s a Tory…er, Lib Dem…er, UKIP, er…

Oops.

I’m confused

Lots of comforting noises started to come out of No 10 when everyone realised that the credit crunch was actually a full-blown global catastrophe of the first magnitude and that the government could no longer pretend it was all going to go away.

There’s been talk of real help with mortgages, jobs, retraining, loans, etc.

But what’s actually happened?

The billions of quids loaned to the banks are sitting there doing bugger all, jobs are haemorrhaging on a daily basis, the pound is now worth a euro, Mandy is being tough and not loaning Jaguar Land Rover the billion they’re asking for and a leaked government document has suggested that lending the hardest-up people in society money at an interest rate of 27% apr is being considered (since strenuously denied, natch) at a time when interest rates are at their lowest ever and, to add insult to injury, Gordon Brown has said he likes the X-Factor winner’s version of “Hallelujah” and that he will buy it for someone as a present – which is possibly the most fucked-up thing he’s come out with so far…

If this is helping us, I wouldn’t like to see our government turn against us…

My head hurts

I’m still trying to make sense out of what Gordon Brown – our esteemed Prime Minister – has said about oil prices.

He’s claiming that the volatility of oil prices has jeopardised the global economy by forcing interest rates to remain high over the last few years…not any more, matey…

So, define ‘high’, Gordon?

A rather nifty chart here shows that on February 7th this year UK interest rates stood at 5.25% . Then they started to fall as the performance of the global economy started to reveal the effects of the looming subprime situation in the US.

However, for the nine years previous to February 2008, the interest rate rattled around within a fairly narrow band between 3.75% and 6.00% and no-one thought that they were particularly high during that time.

Just in case you can’t be asked to click on the link, here’s a graph showing the UK interest rates for the past 20 odd years.

Nowadays we’d love that degree of stability and welcome the higher rates (higher than they are today) as a sign that money was moving around within the economy…

In fact, you have to go back to 1992 and the preceding 8 years or so to find interest rates in double figures.

We had a mortgage then but I don’t remember much about coping with what would now be considered punitive interest rates – perhaps I’ve blotted it all from my memory…

Anyway, I digress.

So, what’s Gordon banging on about?

Has he harboured a long-felt desire for rates just above zero all these years and just never said?

Beats me.

Shame he did bugger all about it, eh?

Anyway, he then goes on to say that we need to invest more in alternative fuel technology.

Now, as I understand it, when oil prices go up the duty on fuel goes up so that the motorist may have to pay more but the government gets more revenue in the form of increased duty.

Could this bonus not have been used to fund more research into alternative energy?

Too late now though – it’s propping up the banks…

Personal financial footnote – I’ve just bought some euros for our New Year break.

I got a rate of 1.01 euros to the pound…ouch!