" Not long ago we were heading towards the danger zone where markets start to question your credibility. "
The markets are still questioning the UK's credibility because, by taking money out of the system - 11bn in April 2010, 11bn in June 2010, and 6bn since then - have left, in tatters, industry's ability to produce that growth to actually repay the National Debt. All that money was used to artificially reduce the Budget Deficit and none left to invest in the economy. If we come out of this with the triple-A rating still intact, it will be because of the Captains of Industry not Government policy. I'm sure that Credit Rating Agencies look at basketful of indicators not just one. I'm sure that they look at the UK's GDP growth because it's the only way they can repay debt.
" Yet in the past eight months we've seen our credit rating - which was on the brink of being downgraded - affirmed at the triple-A level. We've seen market interest rates - which were in danger of spiralling upwards - actually fall. "
The first sentence is correct but because of Labour's policies that ensured growth and minimised unemployment thereby minimising the repossession rate. The second sentenced is a bare cheeked lie. I've got a LIBOR tracker mortgage which, when it came out of the fixed rate in October 2009, the monthly payments fell to 310. They continued to fall until I was paying only 302 per month before the election. Once the election was over, they started increasing - they're now 315 and rising. So they fell under Labour and are rising under the Tories. Don't believe a word they're saying. No wonder the public don't trust politicians, they're just a bunch of bare cheeked liars who will run this country to the ground while the bankers, who caused the problem in the first place, will be running all the way to the...
" All this has happened not in spite of our plan to cut the deficit, but because of it. That's why we must stick to the course we have set out. "
That's another lie. Although the Q3 GDP figures were higher than expected, it was momentum from Labour's successful policies. But it wasn't enough to withstand the pressures on industry especially after removing all that money from the economy. In August, I warned that Europe has a 6 month lag with the USA. In Q1 US GDP fell to 3.6% annualised from 5% in Q4 2009, in Q2 it fell to 1.6% annualised. I concluded that Europe's Q2 high GDP reflected the US's Q4 high. Since the US's Q2 GDP figure was abismal, Europe need to prepare for a "massive downturn by Christmas". We now have one leg in the grave, all we need is another negative GDP figure in Q1 2011, and we'll be in the middle of the much expected 2nd leg of a double dip recession. And, with the arrogance of the Government, there will be a 3rd dip and a 4th one; the same that happened in Japan 20 years ago and lasted a decade.
Five months ago, I warned that the Government policy may mean that we punish our public servants, industry will go down the pan, and we STILL lose our triple-A rating because the UK can't repay its debts. It's obvious that the public servants are suffering. Judging by Q4 GDP figures, it's clear that industry is suffering even before the Spending Cuts have been put into place. The only thing that remains is that we WILL lose our virginity - the triple-A rating.
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