No Eye Deer

U.K. Data Confirms: Recovery Intact

There has been no recession in the UK. Labour just carried on spending. Most of the UK debt has been bought by the government itself. The country is on course for a 12% public deficit. Personally I think that is on the low side.

The market is working on the assumption that the government elected in 2010 will do the cuts. This assumption is wrong. The next election could result in a hung government. It wold mean a government incapable of delivering the cuts required to fix Browns trashed economy.

Gold's Bullish Trend Remains Intact

When a recession hits people start saving. As always people do things at the wrong time. After a while there savings start looking healthy. Maybe they could afford a meal out. That holiday is not a big deal. A car.. Well the accounts don't look to bad. A few pounds in the bank starts to give people confidence.

The prob is paying back that government debt. All that debt means growth will be slow. To get finances back on track means big cuts. Thats means being very mean.

UK, is living it large on other peoples money. Deficits reaching 18% of GDP.. Is that good for sustainable growth. Debt taking 20 years to pay back. Thats based on overly optimistic growth forecasts.

Enjoy your green shoots.

I'm sitting on the sidelines.

Gold's Bullish Trend Remains Intact

I gather the Positive signs coming out of the UK have managed to elude you.

Exactly what are they.

A government that is borrowing 1 pound in every 4 it spends. A government that has cancelled it spending review until after the election in 2010. This leaves all government departments without any budget for the financial year 2010/2011. The good news it means the opposition cannot beat them up about their spending plans. A government that produced a growth forecast for the year that was found wanting by official figures within 48 hours. A government that forecast fall in GDP of 3.5% for this year. Latest estimates place the fall in GDP as high as 4.9%. A government that seems to produce growth forecasts that beat all other forecasts for optimism. Many predicting public sector deficit touching 14% of GDP. Personally I think 14% is on the low side. A government that has allowed the public sector to pass 50% of GDP.

A country were the entire income tax collected from a workforce of nearly 30 million people does not cover the welfare bill. Many millions in the UK are defined as economically idle. Benefits in the UK may seem low. When you understand how the system works people on welfare can earn sums in the region of £30k.

A government that is using a strategy of political traps. So even if they lose the next election they will make cutting public spending a political nightmare.

Seems the market is gambling on a conservative government being elected. Once elected it will guide the public finances towards a path of sanity. First these guys are not thatcher. Even if they win I doubt they could stomach the pain required to fix the finances.

You must also understand the hatred for the conservative party in the UK regions. We have the real possibility that the next elections could produce a hung parliament. No party with overall control. No party able to force through the cuts required.


The number of MPs in parliament is 650. For a simple majority it would mean the conservative party winning 326 seats. In Scotland, Wales and NI I doubt the conservatives will get more than 2 MPs. Thats out of 117 MPs. If we take these MPs from the total the tories will need to win 326 seats from 533 English constituencies. Opinion polls though showing a conservative lead, the lead disappears when you move north into the regions. So a hung parliament is a very likely scenario.


The UK economy is in serious structural trouble. Everyday it is getting worse.

I would also take what ever the BBC says with a bucket of salt.

Commodities: A Wise Long Term Investment

This article has caught my eye in Forbes.

rivate investors should hold up to 15 percent of their wealth in physical gold, according to a German asset management company which plans to set up 500 'Gold-To-Go' ATMs in Germany, Switzerland and Austria this year.

www.forbes.com/feeds/a...

Looks like someone has found a way to get gold into the mass market. Not sure how much demand there will be,

Global Economy Is Clearly on the Mend

I don't think so..

Traders already whisper that some governments are buying their own debt through proxies at bond auctions to keep up illusions – not to be confused with transparent buying by central banks under quantitative easing. This cannot continue for long.

www.telegraph.co.uk/fi...



Lots more bad news to come,

Welcome to the Age of Bountiful Crude Oil - It Should Last About a Month

Duude, I think people will be pragmatic. Already you are seeing falling mileage. This is the effect of the recession, those in work many will have changed their driving behavior. I think we have enough anecdotal evidence for this. We have also over the last couple of years seen a dramatic rise in small car sales.


My SUV gets 23 on the highway - the Civic gets 33. The lack of misery is worth it, even if gas were $10/gallon.


Is that correct..

I seen figures quoting low 11/12 for SUVs

Also seen higher figures for civics. 40 mpg..

These number really suck.. I drive a ford focus.. Diesal..getting 60mpg, knock 20% off as its a UK gallon..thats 48mpg.

Seeing Polo, Seats with 80/90 mpg.

More and more coming on the market..

What I am saying is that you guys being more inefficient you have greater to gain than us.

www.seat.co.uk/generat...

Heres a link to the new seat Ibiza.. More cars comming on the market everyday. No fancy hybrids.

31OIctober.. The idea is not to force people into cars but to make people make their own decisions. Personally I think for security reason the US should not be relying on foreign nutters for energy.

No were in that post did I mention detroit or the US car history. The reason being simple. I know little about it. I do think from a personal point of view large cars is a bad idea. My logic is simple.

Take that seat, 77mpg US gallon..
That mean an average car journey per annum is 15400.
Makes the sum easier.
You average fuels spend for the following prices:
Oil $10 a gallon.. that would cost $2000
Oil $20 a gallon.. that would cost $4000
Oil $30 a gallon.. that would cost $6000
Oil $40 a gallon.. that would cost $8000
Oil $50 a gallon.. that would cost $10000

Put the same numbers in for your SUV. 23..

You average fuels spend for the following prices:
Oil $10 a gallon.. that would cost $6750
Oil $20 a gallon.. that would cost
Oil $30 a gallon.. that would cost
Oil $40 a gallon.. that would cost
Oil $50 a gallon.. that would cost


I think small cars are future proof.. SUVs are not.

The US would not need to import oil if your cars were as efficient as Europeans.

Thats a big saving.

Welcome to the Age of Bountiful Crude Oil - It Should Last About a Month

I think you should go back to the 70s. Crude oil price collapsed and remained lower for years. I think oil demand in the west will carry on falling. The biggest fall in oil demand will be in the US. The main reason being your inefficient car industry. In Europe and Asia most people drive moderately efficient cars already. In the US you guys have been drinving around in trucks. The oil price has changed that. Evidence from car sales is showing a massive increase in small car sales. 5 Honda civic drivers can get to work and back using the same fuel as a single SUV driver. As these sales increase so will the overall energy efficiency of the US transport system. This effect added with the reduction in energy demand due to the recession. I would say that the US will not see increasing oil demand for a while.
Oil demand in the US may have peaked. I have a condition for that statement, peak will depend on how large the US population gets. Seeing 700 million quotes.

The main demand for oil will come from the developing world. This segment will continue to grow rapidly. I guess there will be a cross over were this demand is strong enough to offset the falling western demand.

China Concerns, Crashing Currencies and the Future of Gold Purchases

About China buying gold.

You may be correct.

Does anyone know the figures for Chinesse gold production.

I think China will buy from source. Not from the Market.

China Concerns, Crashing Currencies and the Future of Gold Purchases

What is China upto.

A 'Copper Standard' for the world's currency system?
Hard money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal.

www.telegraph.co.uk/fi...


China could be using dollars to build up large stock piles of metals.

Even Warren Buffett Has 'Issues'

This is a serious downturn. To expect even good companies and investments not to be affected is a bit unrealistic.


Lost his magic touch.

Ask me in ten years.

G20 and IMF Gold: A Late April Fools'

This article in the spectator may help explain some of these terms..
Brown's illusory G20 deal

Making available an extra $1 trillion”. Ahh, those Brown verbal tricks. What does “make available” mean? Is it guarantees, promises, statement of intent? Real spending? Not a penny of cold hard cash has been pledged by anyone. The sum is concocted by taking the IMF’s pre-existing $500bn target for its bailout fund (a target it still hasn’t met), adding another $250bn to the target. And, then, we add a $250bn fund which the IMF would create by printing its own special money.


www.spectator.co.uk/co...

We actually have no idea what they have agreed to. Brilliant.

G20 Protest: Financial Fools on Parade

What exactly, in the act of protesting a mismanaged (& largely fraudulent) global economy, makes these people fools?

Anyone with a sign saying capitalism isn't working. Yet over the last 20/30 years over a billion people have escaped from poverty.

China, Mexico, Russia, Eastern Europe, Brazil, Chile, Vietnam, India. I doubt any off these fools could beat that.

Why Gold Is Overpriced

Sorry Sanjeev, like another poster commented I was looking forward to reading a bearish outlook on gold.I have a bit of gold. I have sold all my equities. I am now sitting on the sidelines. I will not invest in equities as I think the full political and social impact of this downturn has not kicked in. I think the full impact will kick in when they stop borrowing.

This is why I am always seeking out the opinion of others.

Contango's Gold Standard

Russia backs return to Gold Standard to solve financial crisis

Russia has become the first major country to call for a partial restoration of the Gold Standard to uphold discipline in the world financial system.



www.telegraph.co.uk/fi...

Global Currency Risks, Market Worries All Point to Gold

Living in the UK the reason I'm buying gold is mainly for political reasons. Let me explain. The Prime Minister of the UK is elected by MPs, Brown has never been elected by the people, like Tony Blair. Without saying going into detail Brown hates Blair. For Brown not to win the next election would be a total, personal, political and public humiliation. I believe that, our PM, Gordon Brown is mad.
The guy is so desperate to get re-elected that he will take the UK down with him. For many in the UK there is no recession. In many parts of the UK up to 70% of the economy depends directly on the state. We have 25% of the working population defined as economically idle. Many are allowed to live on benefits for years, decades: Single parents; disabled. These groups will never appear in the unemployment figures. I doubt if any of these people have noticed the credit crunch. To fund all this requires large amounts of taxes, Brown calls it investment. I will be long dead before I see any return on this investment. During the boom years he had to borrow to fund this generosity. Now he is printing money. Lots of it.
I am also noticing the political mood changing. The polls are predicting that the Conservative party, the party of Thatcher, a centre right political party, will win the next election, Under Labour the UK has devolved into several elected regions, Northern Ireland, Wales and Scotland. This was done to placate the nationalist tendencies in these regions. Scotland has the greatest amount of autonomy. England itself is split along a north south divide. The north being mainly labour dominated.
The left in the UK consists of the labour party, unions, pressure groups and nationalist parties. The labour party happily defines itself as a broad church. This means it has a range of political thinking from centre left democrats all the way to Marxists. It explains why the other socialist parties have no real support or power in the UK. I have included the nationalist parties as part of this shallow left alliance. The nationalist parties seem to compete with labour on spending. They also use spending restrictions to raise tensions and conflicts with the central government. How socialist these parties really are I guess we will only discover if they ever get independence.
With little under a year before he has to call an election. Brown and the left are turning up the heat, raising the political temperature. To the left the choice is obvious and simple. Vote Labour for a government that will support the public sector and the vulnerable in society. Vote Tory, slang for Conservative party, for an attack on the public sector, for an attack on the vulnerable in society. The truth is of little importance, the facts are of little importance.
I’m not predicting riots, I’m not predicting blood on the streets. What I am predicting is serious social problems trying to restore the public finances to some form of sanity.
Going forward the UK will suffer massive loss of tax revenues from the private sector. The UK private sector will not be as big. The growth attributed to borrowing and from the financial sector will not return. No matter how hard Brown tries to make the people borrow they will not. The increasing pension liabilities that have never been addressed. The bureaucratic procedures implemented by Brown to help the poor, the tax credits, working credits, pension credits. These systems have created large poverty traps. The benefit system that allows some families to have incomes in excess of £40K per annum, twice the national average. The thousands of schemes, charities and quangos totally state funded. No one really knows what they do. No one knows whatever they do actually works. Add the serious opposition to anyone who attempts to fix these problems. You start to see the immense challengers ahead. In a bizarre way Brown wining make make him fix his own mess. Fixing the Browns legacy with all the vitriol and hatred it entails is not something for the faint hearted.