Certain things just don't add up!
I am reading Alistair Darlings book.
in 2008 he was a very astute person and my estimation in the guy as a Chancellor has gone up no end!
He lost his job, basically, because he said the UK economy was the worst for 60 years. In fact he under estimated it even then. Gordon Brown and Ed Balls had no idea.
Again even in 2008 he knew as did other European people that Dexia was in trouble. Today it's being bailed out.
In my blog last week I mentioned about this guy in Dallas making millions if not billions from the markets.
2 things to mention here:
1. There are too many Gold futures contracts for the amount of physical gold! So not enough to be delivered.
2. He said no one had previously, all the figures of Sovereign debt and he mentioned that after his investigation Ireland had debt 25 times more than it's revenues! Japan and France are 10 times.
The next thing to mention is that with Quantitive Easing in the UK what does this do?
1. Gives banks more money to lose
2. The banks are not using it for lending to businesses to get the economy moving.
3. It instills inflation.
Also, in Alastair Darlings book it became very obvious that apart from 1 Banker all the others had no idea what to do. Sir Fred Goodwin went to his house and asked the Chancellor what he was going to do!
So this is what I am coming to.
The economy will not pick up for a while. The Government and the regulatory authorities have no idea what the figures are and therefore, cannot make a final decision and that's why the problems will continue.
The UK banks are not lending, purely because of low profit. If you can get a loan today it will be at 14.9% against their funding of less than 1%.
Inflation MUST go up on any recovery. The UK banks will be the first to raise rates and then and only then will they lend.
So as I predicted some months ago Interest rates have to go up to between 10-15%. This should happen by 2016 which is the date I said recovery will be confirmed.
So if you have a long term view, buy bank shares in those banks that didn't need help from the government.
I am reading Alistair Darlings book.
in 2008 he was a very astute person and my estimation in the guy as a Chancellor has gone up no end!
He lost his job, basically, because he said the UK economy was the worst for 60 years. In fact he under estimated it even then. Gordon Brown and Ed Balls had no idea.
Again even in 2008 he knew as did other European people that Dexia was in trouble. Today it's being bailed out.
In my blog last week I mentioned about this guy in Dallas making millions if not billions from the markets.
2 things to mention here:
1. There are too many Gold futures contracts for the amount of physical gold! So not enough to be delivered.
2. He said no one had previously, all the figures of Sovereign debt and he mentioned that after his investigation Ireland had debt 25 times more than it's revenues! Japan and France are 10 times.
The next thing to mention is that with Quantitive Easing in the UK what does this do?
1. Gives banks more money to lose
2. The banks are not using it for lending to businesses to get the economy moving.
3. It instills inflation.
Also, in Alastair Darlings book it became very obvious that apart from 1 Banker all the others had no idea what to do. Sir Fred Goodwin went to his house and asked the Chancellor what he was going to do!
So this is what I am coming to.
The economy will not pick up for a while. The Government and the regulatory authorities have no idea what the figures are and therefore, cannot make a final decision and that's why the problems will continue.
The UK banks are not lending, purely because of low profit. If you can get a loan today it will be at 14.9% against their funding of less than 1%.
Inflation MUST go up on any recovery. The UK banks will be the first to raise rates and then and only then will they lend.
So as I predicted some months ago Interest rates have to go up to between 10-15%. This should happen by 2016 which is the date I said recovery will be confirmed.
So if you have a long term view, buy bank shares in those banks that didn't need help from the government.
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