Eames Posted October 7, 2011 Share Posted October 7, 2011 I can see a flaw, British Wine ? Is actually bloody lovely. My local Vinyard Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 Is that available in supermarkets ? Link to comment Share on other sites More sharing options...
Eames Posted October 7, 2011 Share Posted October 7, 2011 Errr maybe Waitrose in the South East...... but not nationally I dont think. Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 Exactly, it's overpriced and crap by comparison to proper wine I'm all for best of British etc, but we don't do wine well Link to comment Share on other sites More sharing options...
Eames Posted October 7, 2011 Share Posted October 7, 2011 Order the 6 bottle tasting case and thank me later. We DO do wine, and very very well......... (I don't work for them by the way) Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 Yeah but how much is the 6 bottle "tasting" case ? Can I use your staff discount card ? Link to comment Share on other sites More sharing options...
Eames Posted October 7, 2011 Share Posted October 7, 2011 Yeah but how much is the 6 bottle "tasting" case ? Can I use your staff discount card ? £65 - so £12 a bottle which is par for the course for a decent plonk....... Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 Err no it's not, a very good French wine is no more than £6 Link to comment Share on other sites More sharing options...
peterms Posted October 7, 2011 Share Posted October 7, 2011 I didn't see Osborne's speech but what's the story with the Credit Easing scheme? It seems like a pretty good idea on face value. The detail will be explained in November - they clearly haven't thought it out yet. In essence it's supposed to involve the govt acting as guarantor for corporate bonds issued on behalf of SMEs. However, SMEs don't issue bonds. So someone will presumably need to put together packages of loans to groups of SMEs, risk-rate them, and manage the sale of the resulting bonds on the markets. Sounds like putting together packages of subprime mortgages... Who will do it? Can't be the government, unless they are going to start employing lots of people to deal with all the SMEs, get to know them and their businesses, assess the risks that we as taxpayers will be taking on (I suppose there will be some sort of risk assessment, some judgement of whether the loans requested are likely to be repaid). That's what banks used to do. Possibly they could carry out this role on behalf of the government, for a consultancy fee. They have the local networks, and probably still employ some staff who have experience of actually dealing with businesses rather than just relaying the message "the risk committee says no", which seems to be what they've been reduced to doing over the last few years. If so, then instead of banks lending to SMEs as agreed under Project Merlin, they will be getting paid for managing the scheme, but with the risk being taken by us instead of them. Of course it could be handled completely differently. We'll know in a few weeks time. Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 Why don't the BoE just print off enough money to pay off the nations debt? Job done Link to comment Share on other sites More sharing options...
mjmooney Posted October 7, 2011 VT Supporter Share Posted October 7, 2011 Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 What does that actually mean? Link to comment Share on other sites More sharing options...
LondonLax Posted October 7, 2011 Share Posted October 7, 2011 Why don't the BoE just print off enough money to pay off the nations debt? Job done Because the more money you print the less that money is worth. Money is just a concept, a piece of paper with something written on it. If people lose faith in the concept because more and more is being printed for no cost then it becomes worthless. Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 So is creating another 75bn of "new money" not a sign of desperation and a road to ruin and hyper-inflation?? Link to comment Share on other sites More sharing options...
LondonLax Posted October 7, 2011 Share Posted October 7, 2011 I'd say it's a sign of desperation all right Whether it leads to ruin is up for debate. £75b is not all that much in the grand scheme of things. Link to comment Share on other sites More sharing options...
mjmooney Posted October 7, 2011 VT Supporter Share Posted October 7, 2011 What does that actually mean?It means that paper money is worthless unless the BoE has the actual gold in the coffers to back it up. OK, things are much more complex than that, but that's the general concept. Link to comment Share on other sites More sharing options...
peterms Posted October 7, 2011 Share Posted October 7, 2011 Why don't the BoE just print off enough money to pay off the nations debt? Job done Why issue debt in the first place? There's no actual requirement. The experience of Australia is interesting. When they were running budget surpluses, they weren't issuing debt, and the finance sector didn't like it at all, because this debt assures a risk-free steady income for corporate finance - money for nothing. There's a discussion of this here, and an extract below. ...in the 2011-12 Budget Paper No 1 you come across Statement 7: Asset and Liability Management... ...you read that: Not only are the Government’s debt levels extremely low by international comparison, the expected return to budget surplus in 2012-13 means that the Government is well placed to reduce net debt. A return to budget surpluses will strengthen the balance sheet further, thereby ensuring Australia continues to have the flexibility to respond to any unanticipated future events that have a fiscal impact. It is clear that a sovereign government’s ability to “respond to any unanticipated future events that have a fiscal impact” is not dependent on its level of net debt. The capacity to respond is definitional – that is, if a government issues its own currency and doesn’t take on debt denominated in a foreign currency then it always can buy anything that is available for sale in its own currency. That doesn’t mean it should always exercise that capacity. But it has it whether it has run deficits or surpluses in the past and whether it has accumulated debt liabilities. But I want to focus on the first part of that quote – that running surpluses will leave the Government “well placed to reduce net debt” levels. This leads to a section under Statement 7 entitled Future of the Commonwealth Government Securities Market. Here is an edited version of that section: During the global financial crisis, the stresses confronting financial markets around the world were unprecedented. The crisis led to significant disruption to capital flows, difficulties in pricing and hedging risk, and a general flight of investors to high-quality, safe-haven assets … the continued functioning of a liquid, AAA-rated Commonwealth Government Securities (CGS) market through this period was critical to managing risk and retaining confidence in Australian financial markets. … In 2002-03, the Review of the Commonwealth Government Securities Market was undertaken in response to concerns about the future viability of the declining CGS market. Since this review, successive governments have committed to retaining a liquid and efficient CGS market to support the three- and ten-year Treasury Bond futures market, even in the absence of a budget financing requirement. The term “budget financing requirement” is highly misleading. It is not a financial requirement that is intrinsic to the monetary system. It is a voluntarily imposed rule that the government issue debt to match its deficit spending. The rule could be abandoned at any time without any change in the government’s capacity to spend resulting... ...In effect, the Commonwealth government was retiring its net debt position as it ran surpluses and were pressured by the big financial market institutions (particularly the Sydney Futures Exchange) to continue issuing public debt despite the increasing surpluses. At the time, the contradiction involved in this position was not evident in the debate. We were continually told that the federal government was financially constrained and had to issue debt to “finance” itself. But with surpluses clearly according to this logic the debt-issuance should have stopped. While the logic is nonsense at the most elemental level, the Treasury bowed to pressure from the large financial institutions and in December 2002, Review to consider “the issues raised by the significant reduction in Commonwealth general government net debt for the viability of the Commonwealth Government Securities (CGS) market”. I made a Submission (written with my friend and sometime co-author Warren Mosler) to that Review. The Treasury’s (2002) Review Of The Commonwealth Government Securities Market, Discussion Paper claimed that purported CGS benefits include: … assisting the pricing and referencing of financial products; facilitating management of financial risk; providing a long-term investment vehicle; assisting the implementation of monetary policy; providing a safe haven in times of financial instability; attracting foreign capital inflow; and promoting Australia as a global financial centre. That is the logic noted above that during the GFC, the liquid and risk-free government bond market allowed many speculators to find a safe haven. Which means that the public bonds play a welfare role to the rich speculators. Link to comment Share on other sites More sharing options...
LondonLax Posted October 7, 2011 Share Posted October 7, 2011 That used to be how it worked when the pound was linked to gold. The notes in your pocket were just a way of carrying around the equivalent in gold whilst the Bank of England held it for you. Whoever held the note could "on demand" go to the BoE, hand over their note and ask for the gold in their vaults. It is no longer linked to gold anymore so the phrase is now more historical but the concept of the note being worth an equivalent to something else still remains. Link to comment Share on other sites More sharing options...
CI Posted October 7, 2011 Share Posted October 7, 2011 Good job because Gordon brown bless him sold off a lot of the nations gold Link to comment Share on other sites More sharing options...
TheDon Posted October 7, 2011 Share Posted October 7, 2011 What does that actually mean?It means that paper money is worthless unless the BoE has the actual gold in the coffers to back it up. OK, things are much more complex than that, but that's the general concept. Except it's no longer backed by gold, and so is actually worthless full stop. The "promise to pay" is now just a design feature calling back to a bygone time, it's no longer something that actually has any meaning. Link to comment Share on other sites More sharing options...
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