Monday, July 6, 2009

Worst is to Come, Warns Gordon Brown

(The gloves come off in the blame game for the financial crisis)


I was just getting used to the green shoots and now this!! What is going on? Who can you believe. Also Biden said that "we misread the economy". OK, guys, who is in charge here? Who has dozens of well paid economic advisors informing you what is going on?

I read a resignation or defeat in these remarks. The spin is coming that they "did everything to stop the rot, but nothing helped". And "It was not our fault, but the market's". It is only a matter of time.

We of course know better: they have been warned by thousands of people what the problem was. Just Google and you will find video's, web site, etc. But the message was not politically convenient so almost every message on the depression (not recession) received a cold shoulder.

So folks, prepare for the second downturn. It will be uglier this time. What is worse; people will start losing trust in their leaders. This in turn will create political and economic instability in many countries. With the decline in trust in leadership goes the trust in the system and currencies. Hyperinflation: here we come....
Do you have gold?


But wait...there is more in the article below: I cannot believe my eyes in what Sir John Mayor had to say:
"....Sir John Major, the former Conservative Prime Minister, said that government must “downsize”, suggesting that expanding the State further “is a route that ends in national bankruptcy”. He said that it should reduce its size by a third, including cutting the numbers of ministers and civil servants. The recession presented Britain with a “philosophical opportunity” to reassess the role of the State."

Sir John Mayor must have been doing some reading in the last year about Austrian economics.

Update: David Cameron says: "No, I have enough money. Just vote for me."

Recession may get worse, Gordon Brown warns world leaders

President Sarkozy and Gordon Brown will be testing their new-found 'entente formidable' at a summit in Evian

The worst of the recession may be yet to come and world leaders are in danger of hampering the recovery, Gordon Brown will say today (will say today (?)...proof this is part of media spin).

As he begins a week of meetings with world leaders, the Prime Minister will strike an unexpectedly gloomy note about the prospects of an upturn (obviously he is the leader in all this....) and will demand that fellow heads of government “sound a second-wake up call for the world economy”.

Soaring oil prices, rising 75 per cent this year, protectionist measures contributing to a 10 per cent drop in trade and the failure of banks to start lending again could all put the recovery at risk, according to Downing Street.

The remarks are a departure from Mr Brown’s usual rhetoric. His forecast that the British economy will emerge from recession by the end of the year is expected to form the basis of Labour’s general election campaign. Downing Street sources denied that the remarks were a change, saying that he had not spoken about the international economy for a while.

Mr Brown will sound the warning when he travels to Evian in France for talks with President Sarkozy today. On Wednesday he is heading off to L’Aquila in Italy for the G8 summit of world leaders, including President Barack Obama.

“If we do not take the necessary action now to strengthen the world economy and put in place the conditions for sustainable world growth, we will be confronted with avoidable unemployment for years to come,” he is expected to say today.(translation: "Just listen to me, I have the solution. Why don't you listen to me?")

Mr Brown will also say that although public finances need to be sustainable in the long term, “now is not the time for fiscal contraction (translation: spending > printing money > inflation to come)”. His aides said that he was referring to Britain’s public finances this year and that he was not attempting to start a debate about a second international fiscal stimulus (No? So how are you going to pay for all this in a time of less state income?)

But Mr Brown will be keen to protect the (his) legacy (point) of the international fiscal stimulus package he forged at the G20 summit in London three months ago. He faces opposition from the Swedish Presidency of the EU, which is calling for “exit strategies” from stimulus measures during its tenure, which ends in December.

Lord Mandelson, the Business Secretary, told The Times: “We in Europe have to be mindful of the need not to become complacent and not to relax. If we continue to get our reaction to the crisis right we can make Europe stronger.”

Mr Brown’s remarks may be a sign that he will blame other governments for holding back the recovery if the British economy does not improve in time for the election.

The Prime Minister’s downbeat assessment was echoed by Alistair Darling, who confirmed yesterday that the state of the economy was worse than at the time of April’s Budget and warned that public sector pay had to reflect the squeeze affecting the rest of the workforce.

Figures from the Office for National Statistics last week revealed that the economy had slumped at its fastest for 50 years, shrinking by 2.4 per cent rather than the 1.9 per cent believed previously.

The Chancellor acknowledged that public spending faced “much tighter” limits as a result of the recession.

Reports in The Sunday Times suggested that some government departments are expecting to have to cut budgets by up to 20 per cent. Mr Darling did not deny the claim, saying: “It is not attributed to the Treasury"(translated: not my fault. Ask them!)

He also acknowledged that he had almost been sacked as Chancellor. Asked if Mr Brown wanted to replace him with Ed Balls, who remained Schools Secretary in the last reshuffle, he said: “Some conversations I never ever repeat. In politics you have to be grown-up about it. I am here now and I have a job of work to do.”

Sir John Major, the former Conservative Prime Minister, said that government must “downsize”, suggesting that expanding the State further “is a route that ends in national bankruptcy”.

He said that it should reduce its size by a third, including cutting the numbers of ministers and civil servants. The recession presented Britain with a “philosophical opportunity” to reassess the role of the State.

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