Gordon Brown Announces British Public Assets Fire Sale
ElectionOracle / UK Debt Oct 11, 2009 - 09:22 PM GMTBy: Nadeem_Walayat
Gordon Brown hell bent on going out with a financial bang announces a fire sale of British assets to the tune of £16 billion in exchange for a short pause (1 month?) to the size of the growing debt mountain rather than seek to cut public spending in an election year.
Gordon Brown an expert at selling British assets at the worst possible price as evidenced by the sale of 50% of Britain's gold reserves virtually at the Gold bear market bottom price of $252, which has subsequently more than quadrupled to $1050.
Now Gordon Brown again targets the sale of public assets at rock bottom prices including -
- Channel Tunnel Rail link
- Thames - Dartford Bridge / tunnel
- Urenco uranium processor
- Student Loans Book
- The Tote
- Local Government property
The estimated £16 billion is just a drop in the debt ocean and as a one off event is a pointless exercise if it is not accompanied by spending cuts that make deep inroads into the annual structural deficit that could breach £200 billion this year. However Gordon Brown could target the privatisation of the NHS which could realise as much as £200 billion which would also force market forces onto a bureaucratic and increasingly ineffective health service as I have suggested several times during the year and therefore be accompanied by a cut in the NHS annual budget of 10% which would amount to a £13 billion annual saving on top of the receipts from the sale of the NHS and thus avert Bankruptcy.
- 17 Aug 2009 - Conservative Government to Privatise the NHS and Save the Economy from Bankruptcy
- 03 May 2009 - Privatise the NHS and Save the UK Economy from Bankruptcy
The current total public debt (PSND) at approx 68% of GDP is NOT at crisis levels, what is at crisis levels is the BUDGET deficit of £200 billion per annum which expands the debt at over 15% of GDP per ANNUM!, it is this which sets Britain on the path towards bankruptcy. Therefore the sooner the government acts, the lower will be the eventual pain as less debt will have been accumulated and the lower the risk of waking up one day in the not too distant future to a Black Wednesday as Financial Markets dumping sterling, UK bonds, stocks and assets Iceland style.
The Conservative party announced cuts of £7 billion which is again just a drop in the debt ocean. My Analysis clearly shows that it would require an additional £50 billion a year of spending cuts and tax rises to bring the deficit to under 6% of GDP, £7 billion is not going to do anything.
The politicians following their academic economist guru's continue the mantra of saddling the next generation with debt. However as I have pointed out repeatedly it is not the NEXT generation that will pay the price but THIS generation, because the financial markets are not going to hang around and wait for the children in nursery schools to grow up and take up the debt burden, the markets tend to act in the PRESENT on the basis of FUTURE expectations!
UK Economy Election Bounce into Double Dip Recession
Gordon Brown's prime objective of achieving an strong economic bounce into May 2010 is coming to pass. My on going analysis confirmed a bounce into a May 2010 general election as long ago as February 2009, with more recent analysis confirming this outlook (UK Economy Set for Debt Fuelled Economic Recovery Into 2010 General Election)
Whilst the OECD and other mainstream organisations / press have been busy in recent months revising their economic forecasts, my forecast remains as is and continues to project towards post general election tax hikes and deep public spending cuts that will in my opinion trigger a double dip RECESSION, even DEPRESSION 2011 to 2012 as illustrated by the graph below.
To find out what I expect to transpire over the NEXT 5 years subscribe to my always free newsletter to receive this in your email box.
By Nadeem Walayat
http://www.marketoracle.co.uk
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Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 400 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
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