The edge of the precipice is near:
=> Bank of England mulls "nuclear option" of cash injection
=> Interest rates cut: Bank of England cuts rates from 3 per cent to 2 per cent
=> Gordon Brown promises to push banks on interest rate cut
The lemmings in Downing Street must be getting really scared by now. Having used CPI inflation figures for years, which do not take any input from housing costs, and then having deliberately inflated a bubble in the housing market to steal government income from the masses to take advantage of this lack of reflection in the CPI figures, the comeuppance is going to be truly outstanding.
Expect the "nuclear option" to be taken. This government has so much debt, and has client-state supporters with so much debt that the only way out that they will be able to see, is to monetize the entire amount via the printing press.
And not just via the usual obfuscation of the open market operations division of the Bank of England, but via the front-door purchase of government bonds directly from one department of the Treasury (the Debt Management Office) by another department of the Treasury (the Bank of England), with bills of credit created out of fresh air. It will be called "prudence". It will result in chaotic hyper-inflation and the possible long-term breakdown of society.
It's time to break out the whisky. Drink it while you can still afford it. Drink it to avoid staying sober in an unpleasant land. Drink it while the streets aren't filled with desperate gangs robbing it from you at will.
There is another solution of course. That is for the government to drastically cut back its spending (and I mean by at least half), to drastically cut taxes (at least in half), and to drastically cut wealth-restricting regulations (i.e. virtually all of them). With all of the recent bailouts reversed too, the recession can then be embraced, worked through, and then put behind us, in merely a year or two. The hundreds of thousands of sacked government 'workers' will find themselves something useful to do (or starve), and we will have a country worth living in again.
Obviously, as an anarchist, I would rather the government disappeared entirely, but I'll take a halving for now! :-)
Will they do this? Of course they won't. Because in their short-term greed for themselves and their clients they would rather give us the Weimar republic and the associated political horrors that always follow such economic castrations, rather than suffer any government spending cuts of any kind whatsoever.
And isn't it nice to know that even in these times of financial toughness that the European Space Agency are cock-a-hoop over their recent increase in government funding, to over £5 billion of your taxpayer pounds! Such a splendid use of your donations to the cause of continued government spending.
It makes me feel proud to be an Englishman.