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General Discussion Area / Re: End of zero VAT on food/children's clothes etc?
« on: 05 January 2012, 18:44:08 »Have you had a look at the profits in the financial sector recently and compared them to a few years ago Varche ?
They are in pretty deep trouble.The golden goose isnt laying too many eggs these days.
They are also being taxed at a much higher rate than they ever have been previously.They made contributions to the exchequer of mindboggling sums of money in the boom,but unfortunately our financial genius in number 11 wasted every last penny of it.
National economies have been crippled by Govts. spending huge sums which the countries havent got. Most of the spending has been on ill considered schemes, simply throwing money at percieved problems (NHS for example) and bribing voters with stupid welfare schemes. Thats where the problems stem from and therefore is where the answers to the problems lie.
Sensible levels of public spending coupled with a tax regime geared to businesses being able to make good profits, which will allow them to be competitive and employ people in real wealth creating jobs - no other way that I can see.
Well said Albs.
Banks were the problem in 2008, along with the imposed US Government social lending policies (blame Clinton). Sovereign debt and the Eurozone straight jacket for the PIIGS is now the 2011/2012 problem. If Greece had defaulted instead of the bailout in 2010 and Eurozone Governments had cut spending and deficits then, we would have had a softer landing, than we are about to get. Think 200mph at a 200 year old oak tree and you will begin to get the current picture.
Hungary is about to default due to a failed bond issue. It is in dire trouble with Euro and Swiss Franc mortgages and business loans crippling their economy where their currency the Forint has significantly fallen against these over the last 3 years and has fallen further in the last few days.
The Italian bank Unicredit is in big trouble with its Greek and Austrian subsidiaries, with major losses in the Italian bond market and big exposure, to yes you've guessed it Euro and Swiss Franc loans in Eastern Europe. They are trying to raise €7.5bn to 'strengthen their balance sheet', ie stop themselves from requiring a Government bailout. They had to suspend their shares yesterday.
Credit Agricole in France has just successfully raised €1.5bn to strengthen their balance sheet, good you might say, except they have given that with another €500m (€2bn) to their Greek subsidiary bank to keep it going. The Greek economy is shrinking faster than a pair of gonads in ice water and warning if the second bailout is not approved they will have to default and leave the Euro (Which will lead to much short term pain, but to a long term benefit, much like when we left ERM).
In the global banking game of pass the debt, who knows who will be left holding which parcel when the music stops, and whether they have the reserves to survive, but this might give clue.
http://www.businessinsider.com/european-banks-praying-for-solution-euro-crisis-2011-11
If you have got significant savings, now would be a good time to review where they are held. The Government guarantee scheme covers £83,000 per person per financial institution. If you have savings, like an ISA or cash held in a SIPP pension in the same institution these will all go towards the total.
This is a very good analysis on EU collateral contagion:
http://www.zerohedge.com/news/why-ecbs-ltro-wont-stop-collateral-contagion
and for those that are interested several links on current news:
http://www.mindfulmoney.co.uk/wp/shaun-richards/the-fomc-is-living-in-a-fantasy-land-whose-dangers-are-highlighted-by-hungary-and-the-euro-zone/
http://www.mindfulmoney.co.uk/wp/shaun-richards/my-thoughts-on-unicredit-and-the-banking-corpses-kept-on-life-support-in-ae-or-emergency-rooms/
http://www.mindfulmoney.co.uk/9525/economic-impact/unicredit-collapse-the-invasion-of-zombie-banks.html?utm_source=Newsletter&utm_medium=05%2F01&utm_campaign=4
