Debt interest will still cost 10p in every pound even after Tory cuts

Dearest Edmund is as cynical as Sir Huffchester about David Cameron's squeals of economic pain, delivered by the man whose wife can afford to give up a £400,000 pounds a year job to spend more time with her husband.

The dishonest general election campaign has given us a cynical Government

Wearing my minarchist hat, there is only really one sentence I could have any umbrage with, but Sir Bufton Huffchester has really nailed David Cameron's Glorious Coalition, in this piece.

Obviously, wearing my secret anarchist hat, there's a lot more wrong with it.

But let's not quibble.

Ben Bernanke describes the mental age of most politicians

"It's really tiny!"

Ben Bernanke all but rules out double-dip

"No, if it even looks like a double-dip, then it's helicopter time again until we're all drowning in dollars. There will not be a double-dip on my watch. Not while there's any paper left in the world. I'd rather have a catastrophic collapse than a double dip, any day of the week."

Ben Bernanke, yesterday

And an interesting catastrophic collapse is exactly what you're going to get, Ben, as soon as the printing presses run out of ink.

Gold price hits new record as it breaks through $1,250

It's going much higher than this, pilgrims.

However, there will be dips.

Some of these dips will be immense.

Buy your physical gold in these dips.

I could be wrong about the dips.

It could just be going straight up.

Inflation Corroded Copper Coins

The Mogambo Guru comes up with The Fabulous Mogambo Plan (TFMP) to save Canada.

He also explains Mogambo's Law; though for some strange reason, he fails to abbreviate this to ML?

I am confident he will have his Mogambo Reasons (MR) for this omission.

Financial Collapse Explained in Three Minutes

If you haven't seen it yet, here's a great video Lew Rockwell uncovered on his blog:

Photograph waits for article, shock

The photograph above is crying out to be linked with a story here on Maturin Towers.

But fear ye not, pilgrims. For as soon as the right story turns up, we'll be on the mother, as they say in Quentin Tarantino movies.

It will probably be something to do with Ben Bernanke.

Pure Austrian Thinking from Bagus on Banking Reform

Ye Gods and Dear Lord,

Someone at the Cobden Centre is daring to challenge both Murray Rothbard AND Ludwig von Mises for being too cosy with government!

But this is why Austrianism is NOT a religion.

Because Uncle Murray would have loved it.

‘Meltup’ (or, ‘Lewrockwell.com: The Motion Picture’)

Although it's a heavily US-centric video, David Kramer has uncovered a superb YouTube which pretty much covers us in the UK too (and most other people in the 'western' world). Just translate dollars into pounds and change the Hugh Laurie American accent into his real English one. It's the same story:

Do You Really Believe They’re Going to Pay Off This Debt?

Vin Suprynowicz gets it.

Government debt repudiation.

It may be the only way out of this mess.

And it will stop the buggers taxing unborn children for perhaps a hundred years.

Athens Hosts the Olympiad of Debt

Uncle Gary writes about the Homer Simpson economy:

"In my previous report, "There Is No Money," I surveyed Europe's sovereign debt markets. I argued that the outgoing Chief Secretary to the Treasury of Great Britain, Liam Byrne, hit the nail on the head when he placed a note on his desk for the incoming Chief Secretary to read: "There is no money." He did this as a joke, as he later explained to the media, but the joke was on the incoming government: there really is no money. But there are expenses – lots and lots of expenses. These expenses will increase. Tax revenues will not cover them."

Make mine a large one.

Schiff Roundup

Mr Schiff discusses Friday's worldwide falls in stock values and the Hungary situation. He also Laughs With Mogambo Scorn (LWMS) at all the Wall Street analysts who are still under the mistaken impression that we are in a 'recovery':



He then fills us in on his latest political situation and his petition drive:

Mogambo Roundup

=> Inflation Still a Problem, Despite “Evidence” to the Contrary

Our hero examines how governments are going to deficit-spend themselves into the Giant Black Hole Of Debt (GBHOD)

=> Leading Indicators Indicate a Lagging Economy

The Marvelous Mogambo (TMM) wonders why he doesn't rule over the rest of us mere earthlings as a living god whose every wish is a command

=> Government Desperate. Gold Tax Imminent?

The Mogambo Guru laughs in Rude Mogambo Scorn (RMS) at all those who doubt him

=> Re-Animating a Debt Dog

The Guru genuflects on his Whole Freaking Life (WFL) and find that others are left wanting

"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.

Euro 'will be dead in five years'

Good.

If they want to keep the damn thing, then they should re-invent the euro as the 'Gold Euro'.

1 G€ = 1 gold gramme

Job done.

The Sure Thing

Casey Research (yesterday):

Digging through the entrails of the fundamentals associated with the global economy and markets, it increasingly strikes me that there is really only one investment I’d now consider a “sure thing” – and that is buying gold on dips...

...Of course, the sovereign nations could decide to resolve their massive debt problems through default – and some most certainly will. But at this point, that these nations will reduce their current, let alone future, obligations to manageable levels without crushing their respective economies – never a politically palatable choice – is literally impossible.

Thus, while there will be much grandstanding about making tough choices and hard budget cuts, when push comes to shove, you can bet that the choices made will be those most likely to return the politicos to office, and the cuts nothing more than window dressing, quickly offset by spending increases.

In a world awash in funny money, gold is the only sure thing...

Money supply, the stimulus & where is the inflation?

Really excellent piece by Midwesterner (and Laird) at Samizdata.

Very good indeed.

Peter Schiff: Gold bullion vs. Numismatics — investors want the wood, not the furniture

More from Mr Schiff on how to buy gold:

Peter Schiff: The wrong way to buy gold

The Duke talks about Goldline, a US gold coin seller. He is not impressed by their value for money:



Always check the spot price of gold before you pay for coins. Only deal with reputable dealers, hopefully whom a personal friend has recommended. You should be able to find gold coins for somewhere between 2-4% over the gold spot price, if you are not fussy about numismatic values or getting the 'latest' issues. (Though this must be tempered by the very high volatility in gold prices, at the moment.)

For instance, when buying UK sovereigns, if you want the 'latest' 2010 mintings, you will probably expect to pay more, but if going for something from 1964 or 1973, you should be in the 2-4% over gold spot range. (At least, in less volatile times.)

UK gold coin buyers should buy sovereigns. As these are still 'legal tender', they do not attract capital gains tax. Though do expect the Glorious Coalition to cut this escape route off from the horrors of being forced to use legal tender paper scrip.

Alas, because of this tax status, you will probably have to pay 'over the odds' at the moment, as every Jack Bull in England is buying sovereigns to try to avoid the Glorious Coalition's imminent rack-up in capital gains tax.

I hope all those conservative party voters out there are glad who they voted for.