"I am going to inflate massively", says Cameron

Well, no, he didn't quite put it like that, but he did put it like this:

=> David Cameron: Economic measures will be 'unavoidably tough'

When he says 'unavoidably tough', what he means is that he may really cut government spending by £6 billion, rather than pretending to do so.

But he's been banging on about how 'painful' this will be for so long, and got people into such a pre-dentist-drill state of alarm, that even the smallest twinge of discomfort is going to set off a hysterical reaction, particularly amongst all the Guardian-reading parasites who infest the UK.

So what's he going to do? The British government collects approximately £500 billion in tax, and spends approximately £700 billion. He might actually cut this to £694 billion. If we're going to be really generous to him, he might cut it by what the Guardian-reading classes will consider the gargantuan amount of £50 billion, taking government spending down to a mere £150 billion over its actual revenue. (Which is like earning £50,000 a year and spending £65,000 a year.)

Also, with the new tax increases which are coming (e.g. capital gains tax), taxation income for the government is going to drop, not go up, and there will continue to be negative economic growth. But we've been having growth, I hear you cry!  There has only been a failed Keynesian quantitative easing stimulus which has fooled people into continuing to invest in broken business models, in a frenetic attempt by Gordon Brown's miserable inept government to get re-elected again.

So, let's be generous to Dave. He won't manage it, but let's assume he gets government spending down to £650 billion  (Miracles may never cease). As the economy keeps slowly going through a road crash slowdown, and as new 'politics of envy' investment taxes from the liberals keep hitting government tax receipts, he could be left with an income of £450 billion, which means he's still £200 billion short.

So for all this 'pain' he's going to introduce (massive 'pain' for the Guardian readers, if he cuts £50 billion) there will be no perceived benefit and the economy will still be slowly spiralling into the ground. Dave's political fortunes will be toast, except perhaps for one road out.  (And can you guess, kids, what that's going to be yet?)

Yes, Mervyn King was right when he said that this really was an election to lose.

So what's the Maturin Towers position on this, I hear you cry?

Well, let me first start off by saying if you wanted to get out of this, then you shouldn't have started from here. Given that Cameron lost the election he SHOULD NOT HAVE got into bed with the socialist liberals. They will stop him from doing what needs to be done. Their instincts are to increase taxes and to keep government spending up.

That is why he made a serious strategic mistake in getting together with them. He is now completely hamstrung.

He should have instituted New Zealand style cuts in government spending and privatised everything that could move, everything that could not move, and everything else that was left (in the style of Norman Tebbit).

If I was prime minister and actually pretended to care about 'democracy', then I would also repudiate the British government's debt and tell everyone who holds gilts that I would be re-structuring this debt and giving them a substantial hair cut.  This would be to punish them for lending to the British government in the first place and to stop them from lending to it again, in the future, allowing these gigantic government spending bubbles to form in the first place.

This repudiation would then force me to only be able to spend what the government takes in, in revenue. The spending party would be over and we would be back to Gladstonian liberalism.

Even from my high and mighty tower of anarchism, I could live with that. It would certainly be a damn sight better than what we're going to get.

Because Cameron will not be able to do any of the above, because he is:

1. A wet mushy liberal in conservative clothing
2. He is in bed with the liberals
3. As a member of the metropolitan elite, he wants nothing more than to get rich and to be loved doing it

So what is he going to do then, O Mighty Sage?

He is going to inflate.  There is no other way out for him, given the kind of man he is, given who his friends are, and given his lack of courage in facing up to the Guardian readers.

Buy physical gold on the dips, and if you can, get this gold out of the country to where it cannot be confiscated by whatever government comes after Dave, when the riots push him out. (Switzerland is probably good.)

You'll be glad you did.