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Mervyn King Warns Winners Of UK Election Will Be Kicked Out For Decades Due To Unpopular Austerity Measures Needed
The TimesOnline notes that the Governor of the Bank of England has issued a warning that whichever leader wins the election next week will be kicked out of power for decades because of the severity of budget cuts they will have to instigate. Our own administration would be wise to pay attention to his words as America is undoubtedly next on the austerity bandwagon.
From the TimesOnline:
As the leaders of the three main political parties prepare themselves for tonight's final, economy-themed TV debate in Birmingham, the warning ringing in their ears is that the job of Prime Minister could be a poisoned chalice.
David Hale, a US economist, revealed that Mr King made the comments to him during a meeting last week.
“I saw the Governor of the Bank of England last week when I was in London and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be," Mr Hale said in an interview with Australian television.
There was no comment from the Bank on his reported remarks, although it is understood that the two men met in London in early March rather than last week, as Mr Hale suggested in his interview.
Perhaps all the hype over the November elections is misguided: perhaps the Republicans realize that should they win by a landslide, with the Obama administration desperately delaying the implementation of inevitable tax hikes until after the elections, they will be vilified as the party which will be forced to deal with the cleanup of the biggest private-to-public deficit transfer in history (and a vice versa on the wealth side), and thus result in massive subsequent losses, leading to a second term for the president and a firm entrenching of Democrats in control. Perhaps the prudent move would be to simply concede the election and let the existing administration flounder in its attempts to resolve the insolvable budget and fiscal deficits currently being created.
h/t Joel
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It should be the government that caused it that should be kicked out for decades as they were in charge for a decade!!
Stupid idiot Brown who sold gold at the lows and said we were in a new time and it was the "end to boom and bust"
What a complete fool
It should be. But it isn't. Those who institute austerity, justified or not, pay the price.
As Santayana's little brother said, "Those who don't remember history are condemned to getting an F :( "
Does it matter who wins in November? Uncle Ben is The Chairman.
This coming from the King of Quantitative Easing?
Heh - it's amusing to postulate that the GOP might try to throw the election in November. But never confuse incompetence for strategy - it's infinitely more likely that the party who never misses an opportunity to miss an opportunity will act true to form.
Case in point - signing onto Dodd's (D-Countrywide, Friend of Angelo) bill yesterday.
"the party who never misses an opportunity to miss an opportunity will act true to form."
great line
The line was originally, I believe, Abba Ebban's (from Wikipedia) of the Arabs of whom he said that : "They never miss an opportunity to miss an opportunity".
Could be right about that - I sure as heck didn't make it up!
But I appreciate the compliment all the same, Spiff!
Cheers -
It was used on the West Wing (tv show) to good effect.
"...as America is undoubtedly next on the austerity bandwagon." - never, as long as we have 2-party system without any real choice.
The people have austerity for a decade and more, the banksters have fat bonuses
Politicians want to win elections and be in power, they don't give a crap about what mess they'll be dealing with until after the election.
The goal of a politician is to be in office, period, all other considerations are secondary.
I'm not sure the UK can survive that long for it to be a problem.
Dry, GG.
As I just commented over on the Buiter thread I live in the UK and am thinking about selling my house to convert (hypothetical) GBP to gold, then renting. Its not looking so crazy as it did a few months ago...
Once corporations such as IBM catch on to "crowd sourcing" due to the health plan costs, unemployment is going to be in the 20's and Obama's dream of a welfare state will have become a reality. It won't matter who runs for election in the fall, it will be too late.
I agree about the UK, it is my birthplace and I am saddened at the entitlement multicultural cesspool the place has become, to think the little island once ruled the world.
But on a more positive note, watch Christy in NJ, he is still popular and fighting the good fight
I'm afraid Christies efforts thus far have been to push the budget cuts and pain down to the local level. I haven't seen him do much to streamline the State, which is where the bulk of the problem lies. But I'm always hopeful.
Except the fact that this is REPUBLICAN IDEOLOGY that Obama is continuing.
Much can be said the opposite way too, Dems should of lost in 2008, and let the retards in the current republican party handle this mess.
I guarantee you, they wouldn't of been the party of 'no'. But I guess that is supposition, with nary a reason to believe so.
The fact is the people that screwed up, and supported this mess, need to be kicked out. As I've said before that means about 99 percent of republicans, and the vast majority of democrats as well. Including Obama.
But what will replace them from the republican side? More Sarah Palin's? More Glenn Beck's? More Michelle Bachman's? What about the dems? More wall street centrist Clintonites? More Obamas? More Dodd's?
If so, then we will have another election after that in which, the winner, will lose for a generation. Remember, EVERY election since 2004 has been a 'change' election....being literally screamed by the electorate. 2010, 2012...and if it isn't solved by then, ROFL@the piss poor attempts to, 2014, 2016, 2020, etc, etc.
The people still don't have the answers. Those that have them are few in number. I think all such claims are basically useless since we need a couple hundred million more to understand whats going on. Both parties need to be reclaimed or abandoned.
Plus at some point, the party that tells the truth, wins. After all that's what we've been screaming about. WE WANT THE TRUTH. This guy says whoever says the truth will be punished...yeah...only if they conceed money policy authority to YOU.
Also austerity is what the BANKERS tell you is needed. The gov't is perfectly capable of printing without the federal reserve, that is, if we elect the right people.
Thus no austerity, or limited only to the effects of the fallout of a switchover to a REAL economic system. In others words, much, much less, with an eventual upside. The other way is much, much more, with even MORE downside.
Either Labour will win,(you know the same clowns who sold most of the gold off at the bottom - notifying the markets in advance to ensure the worst possible price) or it will be a LABOUR/LIBERAL coalition,that will bicker on everything and agree on nothing.
Outcome either way:sterling is toast,money printing Zimbabwe style.
Paging Mr Soros, paging Mr Soros.
As a brit but 15yrs out of the country, are any of the parties proposing an Austrian school solution?
I assume sarcasm.
No.
I just got off watching Gordon Brown in the last of the televised debates. Apparently he thinks management of the economy is his strong point. You just have to laugh.
No,all the parties are waffling away but saying nothing concrete about their plans to cut spending.
Cameron tried telling the electorate the true state of the countries finances a couple of weeks ago and how the Tories would slash spending, and overnight turned a twenty point lead into a five point deficit.
Reminds one of the wise old words of Jack Nicholson,"the truth? you can't handle the truth."
The simple fact is I believe the country has gone past the tipping point,here there are so many immigrants,people on the dole,people working for such low wages they have to have them topped up with benefits or just the shear number of people who now work for the state,there is simply no way a political party will get in by saying they will cut spending,when the majority of the electorate depend on the state for their very livelyhood.
The UK and sterling are history.There are now in excess of 500,000 British people emigrating every year now,and politicians like Cameron think it is responsible to replace them with 500,000 third world economic migrants who will be a further burden on the taxpayer.With policies like that,it can only accelerate the emigrating hordes,desperate to escape the country that was once their own.
So true. Although maybe the GBP turning into loo paper will actually stop some of the emigration - it ain't much fun emigrating to spain if you have to live in a basement appartment inland rather than a villa on the beach...
.... on second thoughts maybe spain wasn't the best example ;-)
I think that was done already when they had McCain/McSame running against Obama. Old man McCain who was one heart attack away from having Palin become his successor. I think the ones in the know knew that the economy was going into the crapper and will be that way for decades, so they made a show of fighting on the republicans side and then they allowed as a token McCain to run knowing he would loose. They probably hoped that the problem will be so severe for a few years that by the time the presidential election came around, Democrats would be a bad name. But as I said before, this is going to last at least a few decades. And for the British Central Banker to come out and say that for Britain he knows alot more than he's letting on.
Previously mentioned EURO buying support has returned...
MARKET UPDATES:
http://www.zerohedge.com/forum/latest-market-outlook-0
I've been saying this for months - Labour doesn't care if it leaves a scorched Earth for the Tories to pick up - whoever gets voted in (unless it IS a hung Parliament), if they actually DO anything to fight the problem, will not get voted back in for a long time.
And yet they all go on TV saying 'Vote for me'....pathetic
DavidC
In 1920 – 1921, President Harding reduced federal spending by 20%, which brought a quick end to the Depression of 1920. Could you imagine the boost to the economy that we would realize today if we reduced federal expenditures by 20%? It should be a lot easier to reduce federal spending by 20% today because we waste so much more than we did 90 years ago.
The primary problem in the United States is the extremely high level of debt which was brought on by deficit spending by each President and Congress since 1960. Only two Presidents, Nixon and Clinton had the nads to balance the budget, but on the whole, they too increased the debt. Even the so-called Great Conservative, Ronald Reagan quadrupled the debt from $700 Billion to $3 Trillion. The amount of the debt increase was greater than the tax cuts. The bull market of the 1980’s was therefore more attributable to increasing debt rather than reductions in taxes.
The increasing debt papered over an underlying problem that we have had since the 1960’s. The problem is that the United States faced increased international competition, because everyone else had recently recovered from World War II. The United States can’t meet the increased competition because our overhead (federal spending) is too high. Before World War II the U.S. manufactured half of the world’s manufactured goods with the highest median personal income. The U.S. was the world’s low cost, high quality provider. Every temporary improvement in the economy since 1960 has been the result of increasing debt and / or temporary bubbles. The problem is that this is not a sustainable way to manage the economy because in the long run there is a limit to the debt that can be serviced. Welcome to the Long Run. Even Keynes didn’t recommend the practice of deficit spending for a half century.
So how do we get out of this hole? There is only one way, we have to reduce the nations overhead (federal spending). President Harding had one advantage in his budget, he was reducing military spending after World War I. But we still haven’t wound down the military from World War II! We operate 190 military bases outside the U.S. Every one of them should be closed. We are spending half the world’s military budget. Military spending needs to be reduced by 75%. Excessive military spending is the single biggest reason the United States is uncompetitive. Other countries may have higher levels of government spending than the U.S., but they tend to spend it on useful expenditures like healthcare, rather than military spending, which is mostly waste. Don’t get me wrong, the military is necessary, but the level of military spending in the U.S. is far beyond what is necessary for self defense.
What do we have to show for this excessive military spending? We kept the communists out of half of Korea. That’s it. That’s our only accomplishment. We may have accelerated the demise of the USSR, but there was ample evidence that the USSR was unsustainable in the mid 1970’s anyway. Oh yeah, we also whacked the only person in Iraq that could keep order, Saddam Hussein. This is what we get for a half century of excessive military spending. And our one accomplishment came before spending got out of control.
CEO of the SOFA
“There is nothing to be learned from the second kick of a mule.”