The Renegers - Germany, Netherlands and Finland

It is not difficult to understand why the Germans are so terrified of inflation and will do anything to prevent it escalating above a percentage point or two. There is an interesting piece on this German attitude to inflation and debt, that is foreign to us, in the Open Europe blog today which you can access here. According to Ambrose Evans-Pritchard ('A E-P') in the Telegraph today the extent to which to Germans as well as the Dutch and the Finns are prepared to go extends to breaching an agreement reached in good faith by the Spanish in exchange for accepting the austerity terms attached to the bail out which agreement provided for the ESM bail out fund to take over the cost of recapitalising Spain's banks. If the ESM were to take over such cost it put German and Dutch banks at severe risk of collapse. A E-P's essential  article can be read here. Rajoy will never save his country from ruin if it remains in the euro and any moral reason he felt Spain was under for doing so has now disappeared as a result of the Germans, Dutch and Finns reneging on what had been agreed about the ESM takeover of Spanish bank support. As I said yesterday the euro must now be terminated with extreme prejudice in order to get us all out of the mess it has helped create. Roger Bootle is also saying something similar apparently in Fortune Magazine. I do not have a link but I do have a link to a piece by Charles Crawford that gives a brief idea of what Bootle thinks here.

Lower Taxes And Energy Costs Needed Urgently

Allister Heath's article this morning in City A.M. was one of the most depressing articles I have ever read about our economy. If you haven't seen it you can read it here. It is difficult to see how matters can be turned around in time for the next election without some kind of miracle. Miracles don't happen but there is one light flickering at the end of a long tunnel which if it is real could well help the world recover its economic health more quickly than otherwise looks to be the case. The flickering light of hope is the implosion of the euro. Although only said sotto voce at this time Germany's exit from the euro is now being talked about (by Martin Wolf of the FT for one) as a less scary option than other courses of action. Furthermore the euro intensified troubles in Spain, which threaten its status as a country and at the worst could lead to a military coup, means Spain would benefit from its exit from the euro - a far less awful outcome than the loss of its democracy. It just needs one country to exit the euro for others to see that such action will not lead to the catastrophe prophesied by euro fanatics. It will not be a painless process but at least those countries that do choose this route will regain their currency sovereignty, be able to devalue and eventually achieve a healthier economy - see Iceland for example. Once one country demonstrates the advantages of leaving the euro others will follow. Growth will then develop and it will be this that will help the world and the UK recover from this continuing financial crisis. It really is urgent that the euro breaks up without further delay. Fiddling around with ideas of ever closer union is like Nero fiddling while Rome burns. One thing for sure though that the UK does not need in this time of gloom is increased taxes. We desperately need lower taxes and lower energy costs too. Cameron and Osborne, despite the LibDems objections, must have the guts to push tax cuts and shale exploitation through as a matter of urgency. There is not a moment to lose.  

I Can Swear If I Want To

I am a great fan of Janet Daley and read her articles in the Sunday Telegraph avidly. Janet is a Tory supporter but what helps to make her interesting is that she is originally an American and used to be a socialist. Her background therefore enables her to see things from a different perspective to most of us. It was a surprise therefore to read her blog in the Telegraph this afternoon in which she maintains a lot of Tories are extremely difficult to get on with because of their Mitchell like attitude and that it is the Tory modernisers who are the worse because most of them are toffs. Janet goes on to say that Labour members are infinitely more polite and likeable as people. My experience of politicians is nowhere near as extensive as Janet's but my take on them is that they are all as equally unlikeable as each other and can only think that Tory politicians behave in the way they do with her because they find her, as one well known political editor of a national newspaper told me unkindly, "Janet is barking mad".  Whether Mitchell told the Downing Street Gate policeman he was a 'pleb' or not is frankly neither here nor there but it is Mitchell's appallingly arrogant behaviour that deserves censure and he should resign as a result. Someone in Mitchell's position should set an example. The other thing that rings a wrong note in this affair is that under the Public Order Act the policeman could apparently have arrested Mitchell for swearing at him. Why shouldn't we be able to swear at policemen or anybody else for that matter? What puts a policeman above the rest of us that we all have to bow and scrape to them. I think it was a Labour measure that brought in this law and like a lot of Labour restrictions on the freedom of the individual it should be abolished. It was Blair who was responsible for bringing in law after law restricting our freedoms in order to demonstrate that Labour was even tougher on law and order issues than the Tories. He hoped that by donning some Tory clothes those on the left of the Tory party would continue voting for him and much to my amazement sufficient numbers did just and thus enabled him to win three elections. Blair is now trying to ensure that his son Euan is given a safe Labour seat at the next election so that the Blair dynasty lives on. Yuk. You can fool some of the people .............

Cable Talks Nonsense

Vince Cable was interviewed by Jeff Randall on the latter's show this evening about Cable's announcement concerning the business bank Cable had announced this afternoon during his LibDem Conference speech. Anyone with only a modicum of knowledge about how banks work would have been astonished by Cable's complete lack of knowledge of the subject as became evident by Randall's questioning. Cable defended his idea by saying business banks were something that other countries relied on including the German banks but obviously didn't know that the German banks still have undisclosed losses from the sub-prime debts they bought in the USA. Cable did not seem to know either who would end up carrying the can if the business bank he wants to set up with a £1 bn of taxpayers money were to make losses until at Randall's prodding he finally realised it would be the taxpayers. He also mentioned government guarantees but it was difficult to tell whether these would be in addition to the £1 bn or whether the bank's capital would be made up of a £1 bn guarantee. From the vague way he talked about guarantees it seem the bank will be capitalised with both cash and a government guarantee since he he said that if there were losses this could result in a diminution of the bank's capital and the call on the government guarantee. If true one wonders what the amount of the guarantee would be and under what circumstances a call could be made against it. Cable did say that the Government would not be assessing risk but this would be done by other banks. One question Randall didn't ask in exactly this form is what makes Cable think that another bank, if it's not risking its own money, will be as cautious in assessing risk as it would be if it were the lender. Cable's response was that banks were not lending to SMEs and the business bank would do so. He failed to mention that one reason banks are reluctant to lend, apart from credit worthiness issues, is because the capital requirement for banks has been strengthened resulting in banks having less money to lend. Altogether Cable was unimpressive. How he or the third rate Ed Davey can be thought of as replacements for the awful Clegg it is beyond me. Truly the LibDems lack any politician of any stature and deserve to be routed in the next election. It is not surprising to see that they are behind UKIP in today's poll.    

Money Makes The World Go Round

The public finance figures out today aren't wholly bad since they show that the deficit has been reduced by some 25% since 2010. However Government borrowing for August is the same as last year and the deficit for the first 5 months of the fiscal year that started in April is £10.6 bn more than for the same period last year with the likelihood that the deficit for the year will be £10 bn than projected. The reason for this is down to the lack of growth and the consequent lack of sufficient increase in the revenue stream. This glitch in the plan to cut the deficit by 2015 is said by Mervyn King to be OK so long as the targets have not been met due to a global economic slowdown. It is true that there has been a global slowdown made far worse by the euro crisis which has been handled in such an incompetent way it is surprising the whole thing has not yet collapsed in disorder. Instead of breaking up the euro in an orderly solution it is being aloud to survive for some incomprehensible ideological reason and no doubt to save the faces of EU bureaucrats. Whilst on the subject of markets (which was how the EU was originally sold to us - as a Common Market) you should read Jeremy Warner's article in today's Telegraph here in which he states that the idea that there will be no war between nations that trade with each other is an illusion and he instances a book published in 1910 which supported that theory and which was proved dramatically wrong only 4 years later. Warner warns that the same thing could happen all over again. This is surely a reason why the merger of BAE and EADS should not be allowed. There are too many sensitive issues involved for this country for our independence on defence matters to be compromised in any way and the fear must be that as the bigger partner EADS will want to take our ideas and exclude us from developing them in a manner that suits us and our needs. The time for a decision to be made about our involvement in the European Defence Agency has also arrived and the answer must be 'No' to continuing as a participant. There is an interesting post about this on The Commentator blog here. If UKIP were to have an electoral pact with the Tories as proposed by Farage today then there is little doubt that we would resile from the EDA and refuse to allow the proposed merger between BAE and EADS to go through. It would also mean we'd get a simple In/Out referendum before we negotiated any new arrangement with the EU. Having an electoral pact with UKIP sounds like a good idea!

Does Clegg Have A Screw Loose?

Iain Martin makes a good point in his Telegraph piece today about Clegg, which you can read here. He thinks Clegg may be stupid and it is difficult to argue otherwise. In other times one would ask whether Clegg was gung-ho. Would Clegg attack when it might be better to make a tactical withdrawal? The evidence, which consists of the way he managed the rise in tuition fees in direct contradiction to his pre-election promise, demonstrates that he does not think things through. Neither it has to be said does Vince Cable who is blowing his mouth off this evening about further cuts saying he will not agree to them and neither will he agree to a two year freeze on benefits. The main point about the Coalition is to cut the deficit and this can only be done by cutting spending, making room for tax cuts and thus encouraging those with more money in their pockets to spend more and thereby nurture growth. Simples - but not to the obtuse Secretary of Business etc.. Jesse Norman MP in the Financial Times today expressed the opinion though that the cost to the Government of capital investment is significantly less than the private sector could ever hope to achieve. Norman asserts that the Government should maintain fiscal consolidation but significantly increase capital investment at the same time. In his view £25bn of capital investment at current interest rates would cost just £250m whereas for the private sector the cost would be £375m to £500m or 50% to 100% more. He gives an example of what he means by saying that for every 10 miles of privately financed road the Government could give you 15 to 20 miles. The trouble though with Norman's point is that by Government making the investment it crowds out the private sector and thus no wealth is created for the benefit of of us all. It is to be hoped that Osborne does not listen to Norman on this point even if the latter makes sense about continuing the fiscal consolidation. Norman is of course also entirely correct about Larry Summers, Paul Krugman and the Labour party being wrong big time about how to deal with the current financial problems Labour left us with. Other problems the last Government left us with are smaller by comparison but it is good to see that the Coalition is sticking with its schools, health, welfare and other policies. Now that Ofcom have decided that BSkyB is a fit and proper licence holder the Government must not turn down News Corp if it were to rebid for the shares it does not already own in BSkyB despite Ofcom's statements about James Murdoch.    

Give Romney A Break

Romney is apparently gaffe prone to such a degree that it is now a given that he will lose the election as a result. What is it though that he has actually said? In one instance he told his audience of donors that the Middle East will "remain an unsolved problem.... and we kick the ball down the field and hope that ultimately, somehow, something will happen and resolve it. We don't want to go to war to try and resolve it imminently. So the only answer is show your strength. Again, American strength, American resolve, as the Palestinians someday reach the point where they want peace more than we're trying to push peace on them... and then it's worth having the discussion. Until then, it's just wishful thinking." Seems to me that Romney's assessment is spot on and that his comment about not going to war is responsible. Romney also said that Palestinians are committed to the destruction and elimination of Israel, that they have no interest whatsoever in establishing peace and that the pathway to peace is almost unthinkable to accomplish. Again these are accurate statements so where are the gaffes here? Romney has been refreshingly honest since we all know that the only peace Palestine is currently prepared to accept is one which involves Israel disappears completely. We are told that Romney made another gaffe when he said that "47% of Americans pay no income tax. So our message of low taxes doesn't connect. And [Obama] will be out there talking about tax cuts for the rich. I mean that's what [the Democrats] sell every four years. And so my job is not to worry about those people - I'll never convince them that they should take personal responsibility and care for their lives." Again where's the gaffe in this? It reads to me like another accurate statement. Romney is also being criticised for saying that the debt burdens of Western countries were caused by being over generous to too many out of an inadequate revenue stream. Osborne has been saying the same thing and is also being criticised for telling it as it is. Thomas Pascoe has an interesting piece in the Telegraph today on this which you can read here. Romney's statements demonstrate that he is a realist which after all the dream rubbish propagated by Obama is like a breath of fresh. One can only hope that Romney's honesty will be seen as attractive to the swing voters who decide elections since with all the potential flare points in the world we need a tough United States not the weak one that has been projected by the Obama regime.          

The Dog Van Rompuy

Nigel Farage is reminiscent of the Club bore or (as some might unkindly say) of this blog. Even though what he says may be something with which one agrees his manner of declaiming his views, despite his bravery in uttering them, is off key somehow.  There is little wrong with his message but an awful lot wrong in the way he says it.  This is why he does not have a greater following and this is why the Tories will never take UKIP seriously. If Boris became leader of UKIP then Cameron would really have a fight on his hands but unless something dramatic happens Boris is never going to abandon his position in the Tory party. Nor is Boris going to become Tory leader for the very reasons Simon Heffer sets out in his article in the Daily Mail which you can read here. It is a pity that Boris does not seek the UKIP mantle as then the Tory policy on Europe would have to change and we'd get the referendum we deserve which would be a simple In or Out one. The Scots will have an In or Out referendum on independence so why can't we have one too on a question is equally as serious? Concern about Farage's qualities as leader of UKIP does not mean that he should not have all our support in what is an appalling miscarriage of justice by the so called nonentity called the European Parliament. Appalling though not surprising that Farage has been found guilty and fined  by the 'Parliament' €2,990 for being rude about van Rompuy by saying he had the charisma of a 'damp rag'  or a 'low grade bank clerk'. I would say Farage insulted low grade bank clerks by comparing van Rompuy to them although I doubt they can sue for such an insult. Low grade bank clerks have always been most helpful to me whereas I would say van Rompuy is a piece of excrement of the kind that gets stuck to the bottom of one's shoe and proves difficult to dislodge quickly or at all without sticks and paper. This verdict tells us an awful lot about the EU and its pathetic self important little 'Parliament'. Already we know it does not believe in democracy and now we see it does not believe in freedom of speech. Guido has a post on this which you can read here. It is curious though as Guido says that not more has appeared about this case in the UK newspapers. Indeed Guido's post was the first I had heard of it. It is an absolute outrage and one wonders what the European Parliament would do if Farage refuses to pay the fine. Stick him in some prison maybe. We would then need to send a gunboat to that excuse of a country Belgium to rescue him.

Banking Regulation, QE3, Conflicts and Kate

Daniel Hannan has an interesting piece here about EU regulation and how in the long term it will lead to another crash. He's right and it is urgent that we leave the EU as that is the only way we can hope to have more sensible regulation. We simply cannot allow ourselves to be led by the nose down a path that we know is going to swallow us whole because we are too polite to call a spade a spade. Contrary to our nature we are going to have to tell the rest of the EU we know more about financial markets than they do and that we need the freedom to regulate our way in order to ensure the City continues as a big revenue driver for the UK, indeed the biggest revenue driver. There was another article this morning which is worth reading here and which is by Allister Heath of City A.M. on QE3 in the U.S. and the consequences of the same. Quantitative easing will result in a disaster and despite the various economists supporting it there are apparently more who oppose it. It is possible the majority is wrong but it is nice to be with them for once. We need genuinely free markets and not the kind of crony capitalism that gives us the likes of the arrogant evil smelling Tim Yeo who whilst chairing a select committee on Energy and Climate Change is also on the board of TMO Renewables, a green company. CCHQ are apparently looking into the conflict of interest question but like Ceasar's wife the chairman of a select committee should be above suspicion and as he is not he should resign. Guido has been after Yeo for some time now and has already made him resign as a director of some other 'green' company. Guido held a poll today asking his readers whether or not the photos of Duchess Kate topless should be published which you can see here. The result was 'no' which was how I voted on the basis that it is not in the public interest to see the photos as Kate did nothing wrong. It is a pity that Guido has not had a poll as well on whether when our lady representatives visit muslim countries they should wear a headscarf. This I know is done out of politeness but it has to be said that when the wife of a muslim leader visits this country she always wears a headscarf rather than appearing bare headed. Where is the quid pro quo here and does the wearing of a headscarf by say Duchess Kate feed the muslim belief that their religion is superior and that we should all become muslims? As a matter of principle no female representative of this country should wear a headscarf in a muslim country.    

Obama Fails Again

The world is getting smaller in many ways and particularly in the West. It is not getting small enough  though as far as religion is concerned and certainly not in those places peopled by overwhelming hordes of savage, ill educated fanatics like the unwashed rag heads of Libya, Egypt, Yemen, Pakistan and so on. With all the experience of the past few years about how any criticism of Mohamed can lead to violent demonstrations it seems remiss, to say the least of it, that the U.S. State Department didn't appreciate that the film "Innocence of Muslims" could cause the riots that have so far resulted in four deaths. The film was made apparently by a Copt living in California who often posts anti Muslim videos on YouTube and who must be known to the FBI or whatever agency it is that is responsible for overseeing people doing those kind of things. The U.S. authorities must therefore have had some idea about when this film was going to hit the street. It beggars belief therefore that not only didn't anyone think the film would be seen as inflammatory but that security was not extensively upgraded at all US Missions in Muslim countries before the films release. Bummer Obama was sleeping on his watch. Romney is right to say that Bummer Obama's appeasement policy simply isn't good enough. Bummer Obama has given the impression that the U.S. is withdrawing from its super power role and of course the vacuum that this has caused will lead to violence. For this reason alone I would vote for Romney if I were an American. The other reason would be the economy. QE3 will prove to be a damp squib just like QE1 and QE2. If these had worked there would be no need of QE3 but they didn't so why QE3? Why throw more good money after bad? What needs to be done as here is deeper and quicker cuts. Not more borrowing and postponement of the cuts until some future date as the world, particularly in our case, will soon cease to believe we are determined to sort out our finances and force us to pay a lot more for our borrowings.  

Richard III and Barroso

Has Richard III's body been found buried under a municipal car park in Leicester? The car park stands on the site of what was originally the Church of a Friary before Henry VIII had it destroyed during the Reformation. The skeleton is scoliotic i.e. shows curvature of the spine making the right shoulder higher than the left but not a hunchback nor a withered arm. Whether it is Richard III or not will be determined by a DNA test involving a direct descendant of Richard's sister, Anne of York. If it is Richard III where will his skeleton be re-intered? There is a good argument that it should be placed in a mausoleum in Leicester Cathedral. Although not a Cathedral at the time of Richard's death as there was no Bishop of Leicester between the time the last Saxon bishop fled from the Danes about a 1000 years ago and 1927, the Cathedral could well do with a bit of publicity in a City that has become a town from a different land since World War II. Perhaps the re-internment could also be used as a reminder of the City's English origins and the need for those origins to be respected not only by the immigrant population but also by those in the EU that seek to expunge England as a nation and replace it by meaningless regions so beloved of John Prescott. It will be too much to hope that the message of our nationhood will get through to people like Barroso who has today made a breathtaking announcement that he and the European Commission will be working towards treaty changes to usher in a Federal State of Europe. He will find that this will be a complete turn off in this country and no doubt in other countries too which will vigorously resist the introduction of such an institution. The time has now arrived to tell Barroso and van Rompuy and the European Commission our terms for remaining in the sclerotic EU of which it becomes clearer every day that we are better off out unless the rules are dramatically changed in our favour. There is absolutely no way that we can allow the EU to impose on us any control, for example, over the way the City of London operates since to do so would lead to our impoverishment. An impoverishment that I suspect Paris and Frankfurt are already working to achieve. By the way, if Barroso were to be killed in a battle today and his body buried in what was later to become a car park how much interest would there be even 10 years from now on his body being re-discovered?              

Boos for Paralympic Audiences

There is a certain attitude attached to the Paralympics which is unsettling and which seems to be saying 'aren't we of the left superior to the rest of the world by the way we support the disabled'? This attitude manifested itself through the boos with which George Osborne was greeted the other day in the Olympic Stadium and the cheers for Gordon Brown on the same day. John Phelan in The Commentator blog has a very good point in his post about the ignorance of those who cheered Gordon Brown and which you can read here. The arrogant idea that only those on the left appreciate and support the disabled is appalling particularly when you think that disability is politically blind and can strike anyone from any walk of life and particularly when the revenue to help the disabled comes just as much from the right as from the left. Sometimes some members of this Nation make one sick, not only like those who booed Osborne but cheered Brown but also like those who are selling T-Shirts at the TUC conference bearing a slogan about dancing on Thatcher's grave. I suppose though one could take it as a back handed compliment that this remarkable woman despite the Unions' plans for us managed to thwart them but it is more like a display of jealousy because there has never been a Labour politician who achieved so much for this country as Maggie did. Certainly there is no Labour politician who either commands the same respect or the same level of hatred. You only have to look at Blair, probably their most successful politician, to understand the truly third rate quality the Labour movement aspires to in its leaders. And Ed Miliband continues the tradition with his 'predistribution' philosophy, if that's what you can call it. Anyway it is a somewhat unworkable idea that could mean each individual being given a pot of gold the value of which will depend on his/her wealth at the time of the donation. What value of pot will be given to the penniless child of a wealthy parent? The rules and regulations needed to make predistribution will make the current welfare system look like a picnic. Miliband would be better trying to understand free markets and how they benefit society!