Showing posts with label Finance. Show all posts

Wednesday, 6 October 2010

Tim CONGDON in The Telegraph 06-Oct-2010

Hi,

a quick search on The Telegraph web site for >Tim CONGDON<

gave an interesting response today.

UKIP members may well not know Tim Congdon well as he has needed to Distance himself from The Farage Party not to be seen as just another lightweight on the make and the take and maintain his credibility as a world quoted Economist.

UKIP could do well to shed its image of a bunch of ill mannered racist clowns which clearly The Farage Party is - destined to bump along for ever more with 3-5% of the electorate, no say, no clout, no gravitas and ultimately to become - if not already - the holding pool for a few geriatric extremists who form Ther BNP in blazers teamed up with the political scum of EUrope in the EFD and a few wannabe rich without working youngsters desperately trying to climb on the Gravy Train.

This is THE LAST chance for UKIP to ever be taken seriously.

17 years of Farage style and we are ever deeper in the EU talking of forming a Pan EU Political Party with any trash that will be prepared to be associated so as to GET MORE MONEY but for whom?

Results 1 - 3 of about 213

Dangerous Defeatism is taking hold among America's economic elites ...

September 5 2010 | By Ambrose Evans-Pritchard | Finance
Goldilocks has played a trick on America. Growth is not warm enough to prevent hard-core unemployment climbing to post-war highs and sticking at levels that corrode the body politic, but not yet cold enough to overcome the fierce resistance of the Fed's regional hawks for a fresh blast of stimulus.

US Treasury yields fall to record low on Fed's 'QE lite' plan ...

August 3 2010 | Ambrose Evans-Pritchard | Finance
Yields on short-term US Treasury debt have fallen to the lowest in history on mounting expectations of extra stimulus from the Federal Reserve.

Fed's volte face sends the dollar tumbling

July 15 2010 | Ambrose Evans-Pritchard | Finance
Rarely before have a few coded words in the minutes of the US Federal Reserve caused such an upheaval in the global currency system, or such a sudden flight from the dollar.

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Results 1 - 10 of about 170

Tim Congdon: vicious fiscal consolidation doesn't need to kill UK ...

June 11 2010 | Jeremy Warner | Finance
Tim Congdon, keeper of the monetarist faith, is always good value and was on characteristically controversial form for a lunch at the centre right think tank Reform this week. Here’s just a taste of his remarks. The Keynesian idea that you can raise economic activity by increasing the Budget deficit is jus

Dangerous Defeatism is taking hold among America's economic elites ...

US money supply plunges at 1930s pace as Obama eyes fresh stimulus ...

May 26 2010 | By Ambrose Evans-Pritchard | Finance
The M3 money supply in the United States is contracting at an accelerating rate that now matches the average decline seen from 1929 to 1933, despite near zero interest rates and the biggest fiscal blitz in history.

Leading economists tell us what the future holds

June 5 2010 | By Edmund Conway | Finance
In an exclusive Sunday Telegraph survey, 25 top economists give their opinions on the way ahead.

Economists' survey of the UK: what's the ideal proportion of ...

June 9 2010 | Finance
The Telegraph is publishing the full responses to our Economic Survey, so that you can decide for yourself where we’re heading. We asked the 25 economists ten questions.

Regulators' determination to punish the banks is a punishment for ...

May 27 2010 | By Tim Congdon | Finance
What ails the world economy? Why are governments and central banks having so much difficulty in restoring the above-trend output growth which would constitute a genuine recovery?

Regulators' desire to punish the banks is a punishment for all ...

Inflation 'a greater risk to Britain than deflation'

June 6 2010 | By Edmund Conway and Angela Monaghan | Finance
Inflation is a greater risk to the British economy than deflation, a majority of economists polled by The Daily Telegraph have said.

Euro 'will be dead in five years'

June 5 2010 | By Edmund Conway | Finance
The euro will have broken up before the end of this Parliamentary term, according to the bulk of economists taking part in a wide-ranging economic survey for The Sunday Telegraph.

Fed's volte face sends the dollar tumbling

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Friday, 11 June 2010

Tim Congdon, keeper of the monetarist faith - advised former Conservative Chancellor Ken Clarke

Tim Congdon: vicious fiscal consolidation doesn't need to kill UK growth

By Jeremy Warner Economics

Last updated: June 11th, 2010

Congdon, in the back row on the far right, advised former Conservative Chancellor Ken Clarke

Tim Congdon, keeper of the monetarist faith, is always good value and was on characteristically controversial form for a lunch at the centre right think tank Reform this week.

Here’s just a taste of his remarks. The Keynesian idea that you can raise economic activity by increasing the Budget deficit is just a load of “tripe”. The sooner everyone realises this and gets back to balanced budgets so that vast amounts of public money aren’t wasted on ever more desperately servicing the national debt, the better.

Despite quantitative easing, inflation is no kind of a concern for the medium term, forcing higher capital ratios on banks right now is counter-productive nonsense, and vicious cuts in the deficit are perfectly compatible with above trend growth.
I also quite like the idea that it is not the size of the national debt as such we need to worry about, but only the cost to the nation of servicing it. The bigger the national debt is, the more it costs to service and the more tax revenue that has to be wastefully expended simply on paying debt interest. But the idea that the country as a whole can become insolvent is in Mr Congdon’s view ridiculous, since an economy can only lend to itself what it already pocesses. The construct is like a hall of mirrors. OK, so quite esoteric stuff, perhaps, but an intriguing thought none the less.

The reason Congdon is so confident that you can indeed have fiscal consolidation with decent growth is because it has been done before in the early 1980s. Both he and Sir Alan Budd, chairman of the Government’s new Office of Budget Responsibility were advising the UK Government at the time, so both know that it is perfectly feasible.

But it needs monetary policy to be hospitable. And here we reach the heart of Professor Congdon’s contention. Stop worrying about inflation, stop worrying about banking capital ratios, or whether banks are providing sufficient credit to the economy, and stop worrying too about the effect on demand of cutting the deficit. The only important thing is that money supply expands at a rate compatible with the desired level of nominal GDP growth, or around 5-6 per cent.

Thanks to quantitative easing, which in Congdon’s view should have been applied far earlier to address the previous contraction in money, that’s now occurring. Public policy should always aim for expansion in deposits roughly in line with the desired level of nominal GDP growth.

In the run up to the crisis, it was growing at a much faster clip, which should have set alarm bells ringing but was widely ignored. Just keeping it steady and stable is what we should be aiming at. Well I guess we are about to find out if he’s right.
A big fiscal squeeze is about to be applied against the backdrop of still fragile economic growth. But in Congdon’s view, it will be fine provided the Bank of England can keep deposits growing at 5 per cent or so. We’ll see, but I’m as suspicious as him about the Keynesian justification used by the last Labour Government for keeping the fiscal stimulus at full tilt.

Never mind the ruinous costs to the public finances, I’m not at all sure Keynes would have agreed that spend until interest rates soar was the best approach. He would have been as appalled by a peacetime deficit of 11 per cent with public debt spiralling towards 100 per cent of GDP as anyone.

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