Friday, 24 April 2009

Green shoots on the allotment, dead wood in Whitehall

So it is now very clear that Alistair Darling was working from a spreadsheet that was designed to look good, not to reflect reality.

I don't blame him, he is only behaving the way that any scheming, power crazed politician would. Follow his thinking...

I'll talk the economy up because:
  • I can't get told off for talking the economy down;
  • if it does recover (and he knows it probably won't), then I'm seen as a genius and visionary;
  • if it doesn't recover, it doesn't matter as someone else will have to cope with the fallout.
Likewise, he doesn't have to worry about making the cut-backs in public services, as he must know that his days are numbered. It's a bit like leaving a kipper behind the radiator for the next occupant of the hotel room. Unfortunately the whole country is being screwed by his taking this absurd path. Brown has managed to bankrupt the country.

So no wonder he's screwed the higher earners, because he wants them to be unhappy with his successors. The Tories just won't be able to afford to reverse the Income Tax changes, unless they decide to make sensible changes and abandon the Liberal Capitalist model.

Prediction... OK guess...

2010 onwards will see inflation rising to substantial levels - probably in the form of stagflation. This will be quietly welcomed by the government because it will solve many problems. Unfortunately, it will also see many of our pensioners driven into abject poverty as their meagre savings become worthless. The plan for this has already been put in place.

Let's just hope they haven't over done it - 10% for 7 years pretty much halves the value of your savings... 41% for two years does the same thing.

Technical note:

A quick and dirty way of dealing with compound interest is to divide the period percentage into 71 - and this gives you the number of periods before doubling. So, 10% inflation for seven years means that money has lost about half its value. It works well for values less than about 20%.

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