|Joined||04 Feb '06 18:48|
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|Last Post||25 Oct '14 11:50|
Last 10 posts
25 Oct '14 11:50The 2010 UK General Election
Contribution on the BBC's DateLine London today questioned why EU members with less than strong economies are expected to pay more into the club. This can't continue forever. The EU rules must be changed. Moreover the world economy needs rethought it can be ventured. The argument for a new Bretton Woods is getting more compelling.
Of course the publicly funded 'Metro Growth Commission' may not support a new Bretton Woods.
25 Oct '14 08:04Finance and Investment
At least we can agree there is a financial trend that Washington is very worried about: For example the United States expressed its concerns about the new rival to Western-dominated multilateral lenders.
It's worth recalling one of the postings in the Europe forum a few days ago:
The rest of the world became so opposed to the lack of even-handedness that the IMF was obliged to introduce an independent internal audit section at the Washington based IMF. The Independent Evaluation Office
However this section confirmed the lack of even-handedness - which the G20 communique in November 2008 referred to as a cause of the financial collapse. But little could be done under Washington's rules, hence the BRICS starting to do their own thing. Will the EU?
Anyway, first things first: The key problem seems to be enforcing a set of rules for political economy that key players can agree. But the UK, for example, has shown it can't even stick to its own national rules for finance. Until this is resolved international progress is unlikely.
24 Oct '14 15:30Finance and Investment
Some would argue instead that for some time it's been the policy of China and Japan not to buy US debt; it was talked about for long enough. The AIIB is just another symptom of the trend.
Still on the trend, the public economic agencies in England proposed by the Metro Growth Commission - with its Goldman Sachs connections - recommend innovative money earning consultancy where it is offered.
24 Oct '14 15:14Finance and Investment
No doubt lots of western firms are rushing to Beijing to help make the AIIB a success, despite Washington's displeasure at the trend.
24 Oct '14 14:10Finance and Investment
In addition to China and Japan stopping the purchase of US debt [UK General Election forum, 23 Oct '14 16:40], we learn from 'Foreign Policy':
India joined 20 other countries on Friday to launch the China-backed Asian Infrastructure Investment Bank (AIIB) to aid infrastructure development in the Asian region (Economic Times, NYT). Usha Titus, joint secretary, economic affairs division of the ministry of finance, signed the memorandum of understanding on behalf of India. AIIB, is expected to be operational by next year, and will be headquartered in Beijing. The new bank will be capitalized with $50 billion, and India is expected to be the second largest shareholder of the bank after China. . . the United States expressed its concerns about the new rival to Western-dominated multilateral lenders.
24 Oct '14 11:13The 2010 UK General Election
So far, like most states, the UK is a member of numerous international organisations [including the UN]. Membership entails fees [taxes]. Non-payment of taxes sets a precedent that some will surely applaud - especially frustrating to the trend in the G20.
23 Oct '14 16:40The 2010 UK General Election
Will the formula of the Metro Growth Commission succeed, within the international political constraints we have at present? Here is the report. http://www.citygrowthcommission.com/wp-content/uploads/2014/10/City-Growth-Commission-Final-Report.pdf
If Greater Manchester – our second largest metro area – is in annual £4–5bn fiscal deficit to HM Treasury, the underperformance of our major cities is a problem that will not be solved by anything less than a radical reshaping of the UK’s political economy. To achieve this transformation the Commission advocates a clear shift towards a more decentralised political system.
These constraints will no doubt change soon now that China and Japan appear to have stopped buying US debt, and the US ends its QE next month. The global political economy will surely alter as a result.
Anyway the Commission hopes that all the new metro areas it recommends will raise their games. For comparison, the news from Scottish Enterprise is disappointing: " not enough of our companies export and not enough innovate. We need more companies in more sectors investing in innovation and exploring more markets."
23 Oct '14 09:36The 2010 UK General ElectionWhat is the point of a Conservative Party?
Or it could be asked, what is the point of political parties in big decisions in a valueless global economy?
Perspective is the responsibility of the Federal Reserve in the US.
the Federal Reserve will finish its bond-buying program at the end of this month. . . the Fed’s next task is to decide when to raise interest rates from their prolonged ultralow levels.
The Fed at the Crossroads
Technically, the decision is straightforward. . . raise rates
Politically, however, the decision is fraught. The Fed is not supposed to be swayed by elected officials or special interests. But bond holders [*big contributors to political parties] generally want the Fed to raise rates sooner rather than later. . . Their aim is to pre-emptively attack inflation, which diminishes the value of their bonds.
But it is not the Fed’s job to protect investors’ bond portfolios.
Incidently the news today is that the case for HS2, which was queried in the run-up to yesterday's 'Unleashing Metro Growth' report, is now being re-examined. Poor VFM in public investment seems to be a problem in Britain as well as Germany.
22 Oct '14 14:51The 2010 UK General Election
In the news today is 'Unleashing Metro Growth', the report by the city growth commission chaired by former Goldman's banker Jim O'Neill.
The essence is that power should be devolved to city states of a certain size. Moreover these strong groupings need the same powers as Holyrood. Business Reporter interviewed the chairman
recently to learn of the conclusions:
His chief recommendation is that Manchester, Sheffield and Leeds need to be connected by fast train services to create a powerhouse business hub in the North. On their own, these cities are not big enough, but joined together the combined population of Manchester, Sheffield, Liverpool and Leeds would be 2.3 million – still a quarter of the size of London."
Personally, O’Neill is sceptical that the HS2 rail link between Birmingham and London will do anything except encourage more commuters to the capital. Ditto the HS3 spurs connecting Manchester and Leeds to London.
What has surprised him is how offhand Labour has been to his ideas. The North is after all, he says, Labour’s heartland. "To my surprise, the Labour Party doesn’t seem focused on it,” he remarks. “I say that having spent time with most of the leadership. If somebody had asked me a year ago who would be most amenable to northern regeneration, I would have said the Labour Party.” The Conservatives have got behind another of O’Neill’s recommendations – devolving power to the big cities so they can control their own destinies.
This is against the background of views from the finance industry that international politics will never get together to discipline them effectively. We have seen that even national regulation of finance in the UK is seriously flawed.
22 Oct '14 12:10The 2010 UK General Election
From the BBC's business news on the 'Today' programme.
This week France's economy minister urged Germany to spend on public investment in order to boost the economy - just the latest voice urging Germany to act, ie debt spending. The IMF, OECD and the World Bank also recommend such a course of action in Germany.
A German banker was interviewed about the practicality: he was sceptical about stimulating the wider economy with more public investment:
1. It takes time to get the necessary approvals for more infrastructure. Germany's planning laws mean it'll take years for that money to come through the system.
2. Germany doesn't have a good record of public investment. Not a huge value for taxpayers in many investment projects. Nevertheless Germany's infrastructure is still voted the eleventh best in the world competitiveness report. And among large countries that's probably third in the world - only France and Japan are better.
3. How does Germany fixing some bridges help French or Italian entrepreneurs spend more in their countries? These countries should make it easier for people to invest in them.