We have had a gloomy couple of years with the financial crisis that is continuing to cause global concern and downturn in GDP. It is now even affecting China, India and Brazil. They may still be growing but the rate of growth is slowing down all the same.
This goes to show that the economic policies and strategies that are being used are not really working. Let's not be too cheered up with the minimal growth that appears as bumps in the road because we are nowhere on the way to recovery. However, with the appropriate policies we can be. Let's not continue to only feed the banks that caused the problems but let us support consumers to achieve growth.
It can be done and the sooner we support consumers the sooner growth will return. WE can spend our way out of this recession regardless of the current belief that we cannot. Strong consumer effect can get industry working again; without it industry will continue to struggle. We, therefore need to increase consumers spending power. This can be done in several ways; a reduction in purchase or value added tax, an increase in wages and job creation in the service industry and public sectors as well as promoting growth in private industry. This can be easily achieved by quantitatively easing consumers instead of the banks and financial institutions. Consumers in their turn can and will quantitatively ease industry, the banks and the financial institutions.
A farming analogy is apt at this point. Your land is not going to give you a good harvest if you just throw tons of seeds on arid land. By clearing weeds, and giving your plants, sufficient room to grow in with adequate amounts of water and fertiliser, they will give you a more abundant harvest. Unfortunately our modern politicians no longer come from a solid industry or work related background. Their life experience consists of nothing but a protected upbringing having only experienced theories about life and economics during their academic years and their friendship with financial institutions or their financial supporters. Alas poor us and we have voted them in.
There is only one solution out of this economic downturn and that is
SPENDING OUR WAY OUT OF IT and IT WILL WORK.
Best Wishes.
Good luck and Good Bye until the next time.
Knight Owl.
Sunday, 25 December 2011
Tuesday, 13 December 2011
Solving the Euro Crisis
The meeting of leaders of European Economic Community went ahead last Thursday night, 26 countries joining forces to tackle the problem and the United Kingdom, or Mr David Cameron, decided to stand on the sidelines. Does this, therefore, mean that the Euro is going to survive or is it heading for its demise; particularly as the rumours in the British press is suggesting that the German government is printing Deutsche Marks as a precaution.
In my opinion, the Euro can survive and is likely to become stronger as a result of the current crisis. However, to make this happen, the 26 countries need to explore some policy changes alongside harmonising taxation and regulation of the finance industry. In the main, for the benefit of all the Eurozone countries, the Euro needs to be devalued by 10%. There is likely to be some disadvantages of taking this approach, but the benefits will be much greater, and far outweigh the disadvantages.
The advantages of devaluing the Euro will benefit all the 17 Eurozone countries and also the remaining 9 or 10 if the United Kingdom decides to join the club. It will help enhance growth by making it easier to export goods produced in the Eurozone as it will be cheaper for none Eurozone countries to import these goods. It may increase the cost of imports but if played well home produced goods will become more attractive to consumers. It will also be enjoyed by local and Eurozone consumers. Therefore, growth will increase further adding to GDP. More demand will create more jobs, and more people working will increase tax revenue. There has been a decline in industries producing white goods in Europe, this can be rectified and these goods can be rolled out locally at a competitive price. Europe will once again take pride of place in the world markets.
France and Germany has already got an industrial base and so has some of the newer countries that have joined the European Economic Community. Some countries have allowed there industries to collapse; it will be an opportunity to redevelop them. The Eurozone governments can also harmonise corporation tax to enable varied and appropriate industries develop in all areas of the Eurozone and European Economic Community as long as they all co operate to make this work. The corporation tax can also be tailored to be competitive with other industrial nations. The Eurozone countries should also assist poorer former dependencies to participate with them in making this plan work. They can create additional jobs is these former dependencies and also agree favourable trade deals.
The world as a whole will benefit. However, we need someone to have sufficient courage and conviction to make this happen. Someone to be prepared to take the risk and have the authority and wherewithal to make it happen. It can work and will work; action speaks louder than words. Meetings on their own are not going to solve the problem, action will. Let's hope somebody is brave enough to take the steering wheel and guide this train in the right direction. ACTION is needed now not next year or the year after, if we do not want to look back at at the next ten years as a lost decade.
Good Luck and Good Bye until the next time.
Knight Owl
In my opinion, the Euro can survive and is likely to become stronger as a result of the current crisis. However, to make this happen, the 26 countries need to explore some policy changes alongside harmonising taxation and regulation of the finance industry. In the main, for the benefit of all the Eurozone countries, the Euro needs to be devalued by 10%. There is likely to be some disadvantages of taking this approach, but the benefits will be much greater, and far outweigh the disadvantages.
The advantages of devaluing the Euro will benefit all the 17 Eurozone countries and also the remaining 9 or 10 if the United Kingdom decides to join the club. It will help enhance growth by making it easier to export goods produced in the Eurozone as it will be cheaper for none Eurozone countries to import these goods. It may increase the cost of imports but if played well home produced goods will become more attractive to consumers. It will also be enjoyed by local and Eurozone consumers. Therefore, growth will increase further adding to GDP. More demand will create more jobs, and more people working will increase tax revenue. There has been a decline in industries producing white goods in Europe, this can be rectified and these goods can be rolled out locally at a competitive price. Europe will once again take pride of place in the world markets.
France and Germany has already got an industrial base and so has some of the newer countries that have joined the European Economic Community. Some countries have allowed there industries to collapse; it will be an opportunity to redevelop them. The Eurozone governments can also harmonise corporation tax to enable varied and appropriate industries develop in all areas of the Eurozone and European Economic Community as long as they all co operate to make this work. The corporation tax can also be tailored to be competitive with other industrial nations. The Eurozone countries should also assist poorer former dependencies to participate with them in making this plan work. They can create additional jobs is these former dependencies and also agree favourable trade deals.
The world as a whole will benefit. However, we need someone to have sufficient courage and conviction to make this happen. Someone to be prepared to take the risk and have the authority and wherewithal to make it happen. It can work and will work; action speaks louder than words. Meetings on their own are not going to solve the problem, action will. Let's hope somebody is brave enough to take the steering wheel and guide this train in the right direction. ACTION is needed now not next year or the year after, if we do not want to look back at at the next ten years as a lost decade.
Good Luck and Good Bye until the next time.
Knight Owl
Friday, 9 December 2011
Euro Zone Crisis
Although this is referred as a Eurozone crisis, it is a Global Economic crisis but some nations are trying to see themselves as being out of it. Even Europe, particularly the countries in the European Economic Community who do not have the Euro as their Currency are seeing themselves as being separate from this crisis. This being so, the Eurozone countries should work to protect themselves and their interests and let Europe and and the rest of the world flounder.
The crisis in the European Economic Community, particularly the Euro zone is getting worse. The politicians are trying to stop the Euro crashing down the cliff and disappearing like Atlantis. Hence the meeting yesterday in Marseille and last night and today in Brussels. The problem is solvable but how likely are to solve it? It depends on whether they work in the interest of the European Economic Community or National (Self) interest. When I refer to interest of the European Economic Community, I mean the all the people that form that community and not individual nations, the politicians or their masters the financiers.
The peculiar set up of the European Economic Community into Euro and none Euro zones is also adding to the problem because the none Euro zone countries are trying to protect their own currency and markets thus adding extra pressure to the Euro and the Euro zone countries. The English Media and Euro-sceptic members of the conservative party are acting as doom mongers and praying for the Euro to fail. They have asked David Cameron, a financier by birth and upbringing, to protect the financiers and stab the Merkozy plan to death so that they can dance round the funeral pyre of the Euro as a result.
In my opinion, if all the countries in the European Economic Community cannot agree to a consensual agreement, then the 17 Eurozone countries should work together as a Eurozone Community to defeat this crisis and save the Euro. It is going to make them and the Euro a lot stronger in years to come. The none Eurozone countries of the European Economic Community should remain on the fringe and stop interfering in the progress of the rest. If it means a two tier European Economic Community, an inner sanctum and an outer sanctum, so be it.
The Eurozone Community should start by working together by creating a level field where all 17 nations can work and play under the same rules. The referees should also come from the Eurozone Community and not from the none Eurozone Community for fear of undue interference. They should start by halving the European Commission Budget. The European Economic Community (and the nations in it) and the people are more important than a bunch of overpaid, over-privileged, bureaucrats who spend their time giving the impression that they are members of a special cosy gentleman's club instead of a bunch of civil servants serving the European Economic Community. After all most of the people are having to contribute towards the deficit and are subject to austerity measures. They are facing higher taxes, lower wages and increasing living costs.
The bankers and financiers should also be treated in the same way. They are the ones who got us in this mess and they are still walking with their heads in the air and their hands in their reinforced pockets, jingling their lose change, and whistling "what a happy day". They will also have to contribute to the deficits, but all we have done is lined their reinforced pockets with quantitative easings and taxed the nation a bit more. Do not be taken in by and give in to their threats. Whether it is Standard and Poor or David Cameron, they are just a bunch of financiers protecting their own interests.
The Eurozone problem is solvable and it can be solved. As a Community let us stand together and fight the predators whoever they may be and wherever they may come from. Let us work together, share the pain together and we can then savour the joy together. Also remember, we are all in together, everybody including the financiers, the politicians, the privileged bureaucrats and the people that is the community (and the nations). For now we must all suffer the austerity in equal measures and later as a result of our hard work share the gains equally.
Good luck and good bye until the next time
Knight Owl.
The crisis in the European Economic Community, particularly the Euro zone is getting worse. The politicians are trying to stop the Euro crashing down the cliff and disappearing like Atlantis. Hence the meeting yesterday in Marseille and last night and today in Brussels. The problem is solvable but how likely are to solve it? It depends on whether they work in the interest of the European Economic Community or National (Self) interest. When I refer to interest of the European Economic Community, I mean the all the people that form that community and not individual nations, the politicians or their masters the financiers.
The peculiar set up of the European Economic Community into Euro and none Euro zones is also adding to the problem because the none Euro zone countries are trying to protect their own currency and markets thus adding extra pressure to the Euro and the Euro zone countries. The English Media and Euro-sceptic members of the conservative party are acting as doom mongers and praying for the Euro to fail. They have asked David Cameron, a financier by birth and upbringing, to protect the financiers and stab the Merkozy plan to death so that they can dance round the funeral pyre of the Euro as a result.
In my opinion, if all the countries in the European Economic Community cannot agree to a consensual agreement, then the 17 Eurozone countries should work together as a Eurozone Community to defeat this crisis and save the Euro. It is going to make them and the Euro a lot stronger in years to come. The none Eurozone countries of the European Economic Community should remain on the fringe and stop interfering in the progress of the rest. If it means a two tier European Economic Community, an inner sanctum and an outer sanctum, so be it.
The Eurozone Community should start by working together by creating a level field where all 17 nations can work and play under the same rules. The referees should also come from the Eurozone Community and not from the none Eurozone Community for fear of undue interference. They should start by halving the European Commission Budget. The European Economic Community (and the nations in it) and the people are more important than a bunch of overpaid, over-privileged, bureaucrats who spend their time giving the impression that they are members of a special cosy gentleman's club instead of a bunch of civil servants serving the European Economic Community. After all most of the people are having to contribute towards the deficit and are subject to austerity measures. They are facing higher taxes, lower wages and increasing living costs.
The bankers and financiers should also be treated in the same way. They are the ones who got us in this mess and they are still walking with their heads in the air and their hands in their reinforced pockets, jingling their lose change, and whistling "what a happy day". They will also have to contribute to the deficits, but all we have done is lined their reinforced pockets with quantitative easings and taxed the nation a bit more. Do not be taken in by and give in to their threats. Whether it is Standard and Poor or David Cameron, they are just a bunch of financiers protecting their own interests.
The Eurozone problem is solvable and it can be solved. As a Community let us stand together and fight the predators whoever they may be and wherever they may come from. Let us work together, share the pain together and we can then savour the joy together. Also remember, we are all in together, everybody including the financiers, the politicians, the privileged bureaucrats and the people that is the community (and the nations). For now we must all suffer the austerity in equal measures and later as a result of our hard work share the gains equally.
Good luck and good bye until the next time
Knight Owl.
Thursday, 24 November 2011
Work Related Pensions
Public Service Unions have called for and a majority of their members have voted to strike on the 30th of November 2011. This is in response to the UK government's plan to increase public sector workers contributions towards their employment pensions, the age at which they can retire and reduce the value of their pensions. The government argues that this is already the case in the private sector and they are creating a level playing field.
This is true to a certain extent but is this right? There is already a discrepancy between employees pensions in both the public and private sectors. Management staff have better pension arrangements in both sectors, as well as, having bigger pay packets and higher annual pay increases. They can also retire earlier. In the private sector the gap between management pensions and employees pensions is even more pronounced.
In my opinion, all employees have a right to decent employment pension. They should not rely on or expect the state to subsidise their pensions through "old age pensions". They should also not have to wait to receive their pensions until they are to old to enjoy the fruit of their labour. Otherwise, any pension they receive will only go towards paying their "care home bills".
Employment pensions, particularly in the private sector, have in the main failed because of abuse of pension funds by some private sector companies and pension fund managers. During the 1980s and 1990s many private companies misused pension funds as capital investments or used it as loans to bail themselves out during financial difficulties. Very often they were not able to put the funds and interests back in the pension pot. Even now, pension fund managers are not only earning extremely large sums but also taking increasingly larger sums in bonuses regardless of the performance of pension funds being managed. [One such person appearing on UK television, this week, claimed she is worth more than the pension fund contributors.] They are, therefore, receiving proportionally higher returns on the investments than the people contributing toward their pensions. Pension contributors have lost out in the past and they are still losing out; and this, particularly, include public sector workers and lower to middle earners in the private sector. They are subsidising the state through taxes, subsidising pension fund managers luxurious lifestyles and disproportionately boosting private sector profits and entrepreneurs and shareholders dividends.
The current proposed system of employment pensions, whether in the private or public sector is both unjust and highly regressive. There is a rational solution, but it is unlikely to be adopted as most governments have and share monetarist views and are supported in their position of power by capitalist funds. The solution is simple. Employment pensions and pension funds for both the private and the public sectors should be managed and regulated by the state. There should also be a truly independent audit system in place. It should not be abused or misused and fund managers should only receive adequate, not exorbitant, remunerations. Employees should contribute an agreed percentage of their salaries, with a similar arrangement for employers. The retirement age should be the same for managers and other employees. The pension to salary ratio should also be comparable.
To put it simply, there should be a universal employment pension system for all. It should be a right and enshrined in law. And similarly everyone should have a right to employment. However, this is unlikely to happen in the UK. The UK government is hell bent on punishing public sector workers for the financial problem created by greedy bankers who are going scot free and still enjoying huge wages and bonuses. This is lunacy. Is it because senior politicians in the UK government come from banking and financial institution background? Readers you can be the judge.
Good luck and good bye until the next time.
Knight Owl
Tuesday, 15 November 2011
Eurozone Crisis; What Crisis?
The so called economic and financial demise of several European countries continues on a downhill trend like a motorcars with faulty brakes. It started with the Republic of Ireland, then Spain and Portugal were threatened. However, Greece and Italy seems to have slipped even further. Quantitative easing and bale-outs are being pledged by the governments but the economy is slip sliding regardless.
However, in the UK it is difficult to accept that their is an economic downturn especially if you live in London or the South-East. Some Londoners are still buying second home as the two home lifestyle continues to grow. Luxury goods traders, such as Burberry, are also seeing increasing profits as the sales in luxury goods is increasing. I am sure the same applies in other European countries and the USA and the rest of the world that has been affected by the economic crisis. This suggests that the wealth is there but it is not being distributed in a fair and equitable manner. Some have most of the world resources and riches and most have very little. Even the bankers who contributed to the economic disaster are still enjoying a lucrative lifestyle and huge bonuses.
The austerity measures that are being legislated by the governments are in the main hitting the less well off and reducing their meagre income. The greedy rich however, continue to amass wealth by raising commodity prices and playing monopoly with the world's economy. Will the governments even dare take a penny off them? Wait and see! The governments have not legislated to regulate the banks or reform the banking system as proposed at the height of the banking crisis and that was over 3 years ago. Many wealthy people continue to avoid paying taxes and they are legally allowed and encouraged to do so. At the time of writing our British Chancellor of the Exchequer is reported to be contemplating cutting the top rate of tax. Therefore those who even feel guilty enough to pay their taxes will be helped to pay even less.
It is difficult to judge whether we are having an economic crisis or not. The wealth is still there; few have most of it, some have have just enough, the majority have very little or nothing. So what is this crisis about? What are the austerity measures about? Upon the requirement of the International Monetary Fund (the wealthy), the governments (the instruments of the wealthy) are directed to pawn off or hand over public services (public sector industries) to the wealthy. To what effect? To reduce public funding of these services or increase private profiteering? I'll let the readers be the judge of that.
Good luck and good bye until the next time.
Knight Owl
However, in the UK it is difficult to accept that their is an economic downturn especially if you live in London or the South-East. Some Londoners are still buying second home as the two home lifestyle continues to grow. Luxury goods traders, such as Burberry, are also seeing increasing profits as the sales in luxury goods is increasing. I am sure the same applies in other European countries and the USA and the rest of the world that has been affected by the economic crisis. This suggests that the wealth is there but it is not being distributed in a fair and equitable manner. Some have most of the world resources and riches and most have very little. Even the bankers who contributed to the economic disaster are still enjoying a lucrative lifestyle and huge bonuses.
The austerity measures that are being legislated by the governments are in the main hitting the less well off and reducing their meagre income. The greedy rich however, continue to amass wealth by raising commodity prices and playing monopoly with the world's economy. Will the governments even dare take a penny off them? Wait and see! The governments have not legislated to regulate the banks or reform the banking system as proposed at the height of the banking crisis and that was over 3 years ago. Many wealthy people continue to avoid paying taxes and they are legally allowed and encouraged to do so. At the time of writing our British Chancellor of the Exchequer is reported to be contemplating cutting the top rate of tax. Therefore those who even feel guilty enough to pay their taxes will be helped to pay even less.
It is difficult to judge whether we are having an economic crisis or not. The wealth is still there; few have most of it, some have have just enough, the majority have very little or nothing. So what is this crisis about? What are the austerity measures about? Upon the requirement of the International Monetary Fund (the wealthy), the governments (the instruments of the wealthy) are directed to pawn off or hand over public services (public sector industries) to the wealthy. To what effect? To reduce public funding of these services or increase private profiteering? I'll let the readers be the judge of that.
Good luck and good bye until the next time.
Knight Owl
Rights and Responsibilities
Do people have a right to protest and are they responsible enough to do so. In Europe and the USA this does not seem to be the case, although some protest is tolerated. However, Europe and the USA not only condone this form of action in the Middle East but overtly support it. Why is there one right for the Middle East and another for Europe and the USA. In Europe and the USA, the governments are taking forceful action to stop and discourage any such expression of dissatisfaction with the state or the creators of the economic doom.
Is this because in Europe and the USA, the governments legislate in favour of the rich against the "plebeians"? Of course, the rich fund their election campaigns and gets them the seats in parliament and the senates and the voters do not matter. May be that is a way of repaying their dues. Let the Masters rule the governments. The "plebeians" are no more than slaves to the demands of the Masters. The governments are instruments used by the Masters to control the "plebeians" and keep them in check. In the UK, the government is even considering legislations against the right of workers to strike. Soon workers will have no rights at all, "and they will be no better than slaves".
"Plebeians" beware! During election times think; do you votes really count?
Good Luck and good bye until the next time.
Knight Owl
Is this because in Europe and the USA, the governments legislate in favour of the rich against the "plebeians"? Of course, the rich fund their election campaigns and gets them the seats in parliament and the senates and the voters do not matter. May be that is a way of repaying their dues. Let the Masters rule the governments. The "plebeians" are no more than slaves to the demands of the Masters. The governments are instruments used by the Masters to control the "plebeians" and keep them in check. In the UK, the government is even considering legislations against the right of workers to strike. Soon workers will have no rights at all, "and they will be no better than slaves".
"Plebeians" beware! During election times think; do you votes really count?
Good Luck and good bye until the next time.
Knight Owl
Friday, 14 October 2011
Politics and Politicians
There is a lot going on in politics at present and it is difficult to choose a specific topic to write about. However, with the goings on with secretary of states in the UK, I thought that might be one topic of interest.
Dr Liam Fox, secretary of state for defence, or now ex-secretary of state for defence, fell foul of his friend's involvement with his official position. Dr Fox's friend had posted himself as his advisor although he had not been officially appointed as such. He was photographed attending various official meetings with him. It was reported in the press that he had also arranged some of these meetings. Pecuniary arrangements for this friend was rather dubious. It was claimed that Dr Fox's political sponsors were supporting him financially. Dr Fox's friend claimed to have special interest in the arms trade. The unanswered question remains whether these sponsors were arm traders or not? Dr Fox has now resigned his government position but will this stop the speculations or further revelations. We shall have to wait and see.
Today, it has also been revealed that another Cabinet Minister has been photographed on several occasions dumping official government papers in public litter bins in St James's Park in London. I am not going to speculate, he may have just been offloading himself of the weight. I shall leave the speculating or revealing the true reasons, if there is one, to the media.
Going back to politicians, governance and political influence. There was a time when politicians and politics was about national interests. However, this has long gone and no politicians or political parties are immune to it. And this is not only a UK position, it is a worldwide issue. Although governing a country is about working in the interest of the whole nation, this is no longer the case. The governments only really work in the interest of about 20% of the nations and these are the plutocratic investors and industrialists. Legislations are always in favour of these minority groups, and this include TAX avoidance legislations. Whereas legislations for the remaining 80% is punitive and negatively weighted. The current austerity measures of high taxes, low wages, increasing living costs and pension changes also only apply to the majority 80%. Whilst this 80% are sweating Calories turning the wheels of industry, the other 20% are putting on Calories and increasing their wealth enjoying the fruit of the former's labour.
I suppose the duties of governments and politicians nowadays are about helping their financial sponsors who bankroll their prospects of getting elected and political careers and not the nations. There is also this principle that trade and industry is the heart of the modern world. This being the case, may be politicians are delivering the goods that their wealthy clients have paid for and not acting in the interest of their voters. How this applies to the labour party in the UK is a bit confusing. This political party is financially supported by both trade unions and wealthy plutocrats. The trade unions and trade unionists do not get anything in return but the plutocrats do. Are the plutocrats support more important, and/or are the trade unions and the trade unionists just taken for granted?
This whole process calls into question the belief related to elections and democracy in electing politicians and governments, particularly in the western world that boasts about its democratic principles. Does this reflect the diminishing number of voters who actually turn up at the polling stations? Do the voters feel that no matter who they vote for the elected representatives do not work in favour the majority voters anyway?
Good bye and good luck until the next time.
Knight Owl
Knight Owl
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