So, is it really armaggedon?

[loz]

Clarkson seems to think so

BBC NEWS | Business | Jeremy Clarkson on car sales decline

[philofcas]

'i'm a geddin' the impression it is !!

(sorry couldn't resist)


It's probably bad news for anyone in the industry

[domtheone]

Morgan Freeman said we were all gonna be all right

[loz]

Originally Posted by philofcas

'i'm a geddin' the impression it is !!

It's probably bad news for anyone in the industry

In case people didn't watch it, his comments were primarily about the economy in general, not the car industry (despite the BBC's title)

I just hope our garden is going to be a big enough plot to feed our family.

[philofcas]

Originally Posted by loz

In case people didn't watch it, his comments were primarily about the economy in general, not the car industry (despite the BBC's title),

I just hope our garden is going to be a big enough plot to feed our family.

yep on the garden front, ours is pigging tiny!!, i know it's hard to believe but i did watch it despite it being a lovely Sunday afternoon.

[loz]

only today

BBC NEWS | Business | UK car parts firm jobs threatened

The UK arm of leading European car parts business, Wagon Automotive, looks likely to go into administration.

A last-minute bank refinancing deal to tide it over the next few months is understood to have fallen through.

Birmingham-based Wagon Automotive employs 500 workers in the West Midlands and supplies parts to Ford, Honda, General Motors and Nissan.

The company, which employs 4,500 people across Europe, has struggled because of the slump in the car market.

Several of its customers have cut back production or temporarily shut plants in order to reduce their own costs.

While Wagon Automotive's UK business is expected to go into administration this week, the future of its other factories is still to be worked out.

that last sentence reminded me of exerience of previous downturns where because our labour laws are a bit weaker than our mainload european neighbours, the layoffs come quicker in the the UK than they do overseas.

Of course it attracts some overseas companies here in the first place, but because they know it won't be half as difficult to pull out again than Germany or France...

[wormvortex]

Sounds like Clarkson has a cold.

[johnscarlet]

He was feeling fine, just had a sore throat. Not the best day though considering he had Moyles , Mayo and the ONE Show to do , plugging his DVD

[LFC_SL]

My local Renault forecourt closed down. The local college seemed to be quick on the uptake as they are now using the abandoned lot to park their minivans

I think for many people buying second hand is more viable

[namuk]

It has not helped the UK car industry bringing out a new plate every 6 months, the second hand car market is full of some really good deals, the new car buyers have realized this due to the credit crunch or the fact the banks just will not extend there credit from the new car they bought 3 years ago..

[w3bby]

All the car dealers in Cornwall seem to be laying people off. 50 I believe from Dlaes - Renaults / Suzuki

[damo_in_sale]

Major formatting error here.

[damo_in_sale]

Is it really Armageddon?

There is a new banking bill, and one lovely snippet from it includes the following (It regards the Bank of England):

This in effect abolishes the following responsibility of the Bank of England: (established one hundred and sixty four years ago, so that ordinary people could have faith that the government and Bank of England were not debasing sterling: the money you save up, spend, and are paid with).

"Part 7 — Miscellaneous

Weekly return
Section 6 of the Bank Charter Act 1844 (Bank to produce weekly account) shall cease to have effect."


This in effect abolishes the following responsibility of the Bank of England:


"And be it enacted, That an Account of the Amount of Bank of England Notes issued by the Issue Department of the Bank of England, and of Gold Coin and of Gold and Silver Bullion respectively, and of Securities in the said Issue Department, and also an Account of the Capital Stock, and the Deposits, and of the Money and Securities belonging to the said Governor and Company in the Banking Department of the Bank of England, on some Day in every Week to be fixed by the Commissioners of Stamps and Taxes, shall be transmitted by the said Governor and Company weekly to the said Commissioners in the Form prescribed in the Schedule hereto annexed marked (A.), and shall be published...."




I layman's terms, the Bank of England was previously forced to PUBLISH any new currency that it minted or printed and then issued, and on a weekly basis.

It will no longer be required to do so.

This comes at a time when considerations of a policy described by the fancy language of economics as "Quantitative Easing" are being made public.

I can describe this policy in quite simple terms "The State prints money to pay bills, either those of its own or those of others it deems deserving".

And the new banking bill means that the UK government can keep this a secret.

The policy is deemed a possible tool to combat deflation. In my opinion, it will either 'work', and bail out ****less borrowers and ruin prudent savers through inflation(that is it's intention), or it will fail and ruin everyone through hyperinflation.

If I had suggested, just two weeks ago, that either the UK or the US government was considering printing money then I would have been attacked as a lunatic.

But I believe that this policy is being given serious consideration, and at the highest levels.


As I anticipated debt deflation (that is what we have now, although only just the beginning) I stayed out of assets and saved.

To cheer the borrowers amongst us up, an amateur trader last week informed me that RBS futures traders anticipate a 50% fall in UK house prices.

This might give you some appreciation as to why there is less credit flowing to consumers and business, in total: If the lenders (just the banks now really, but there used to be a load more avenues of lending before) think the value of assets used to secure against their loans will collapse, then they would be stupid to issue those loans.

Just to put that in perspective, a 50% fall will obliterate a 100% gain. As a hypothetical example, you buy a house for £200,000 in 1998. By 2008 it has appreciated to £400,000. Given that 50% of £400,000 is £200,000, a depreciation by 50% will wipe out your entire decades worth of 'gains'.

I understand the above sounds like nonsense. That can't possibly happen, can it?
After the massive Japanese boom of the eighties, house prices fell between 50% and 90% in the 90's, depending upon the area.


This isn't to say of course that they are correct, but I expect a house price depreciation of 30%, from peak to trough. So, if I am proved correct, then a house purchase of the cost of, say, £200,000 for a first time buyer two years ago, would see the value of that asset reduced to £140,000. Yet the borrower will still owe £200,000, less the capital they have paid off.

It now seems that the policy of the government is to bail out ****less and ignorant borrowers and shaft the saver.


In my opinion, we are in the stuffed whatever is the policy of government. This government appears, as was my criticism of it's previous conduct and over many years, to have a policy of 'make today look good and bugger tomorrow'. In my opinion, they seem hell bent on making today look as good as is possible in return for ruining us in the future.

At the slightest hint of future inflation, my modest savings will be used to purchase gold.


If you are looking for someone to blame, then in America you have Alan Greenspan, and in the UK you have Gordon Brown (Alan Greenspan was the chief of Federal Reserve in the US, and is an advisor to Gordon Brown here in the UK).

In the UK, the Bank of England can hardly be blamed because Gordon Brown told them what the target of inflation should be (2%), told them how inflation should be measured (RPIx, but then that started to look high as it measured the cost of buying a house and council tax etc., so he swapped it for CPI which does not), and appointed the members of the committee who deliberate and eventually decide upon the eventual Bank of England interest rate.

Both are guilty of generating monstrous and unsustainable booms in housing through moronic monetary policy (way too low interest rates).




If we are lucky, we face a severe recession.

If we get what we have been asking for, we will get a major depression.




So, is it really Armageddon? How does the above sound?

[IronGiant]

I own one brick of my house, I made that one myself The rest is in doubt

[namuk]

Originally Posted by IronGiant

I own one brick of my house, I made that one myself The rest is in doubt

I Own all bricks but i am afraid of invasion