The Brits feel the ugly pinch of wasted economics:
The UK economy shrank by a shock 0.5% in the last quarter of 2010 as Britain’s recovery from recession faltered.
Economists said the first estimate of GDP for the last quarter was much worse than expected, and meant that Britain could now suffer a double-dip recession.
With inflation hitting 3.7% last month, there are also growing fears the UK is heading for an unpleasant dose of “stagflation.”
The data sent the pound falling by nearly one and a half cents against the dollar to $1.575, and pushed the FTSE 100 index down by 36 points.
Across the pond, the US might be next.
(Illustration found here).
And further grope for money in the UK.
Via the Telegraph and Bank of England chief Mervyn King:
â€œIn 2011, real wages are likely to be no higher than they were in 2005,â€ he said. â€œOne has to go back to the 1920s to find a time when real wages fell over a period of six years.
â€œThe squeeze on living standards is the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies.â€
Despite all the indications from numerous sources, the so-called global economy is going to shit in a wire basket.
Even at the elitist financial meeting now going on in Davos, Switzerland, the outlook for 2011 doesn’t look so hot, although most of the attendees try to paint a glossy picture on the world’s economy.
The big problem?
The gap between rich and poor: One theme appeared to resonate with executives and officials from the developed and the developing world alike: the potentially corrosive social effect of widening income inequality across and within many countries. Mr. Zhu called it â€œthe most serious challenge for the whole world.â€
Money in the same old greedy hands.
A good analysis from the astute financial site, The Automatic Earth:
The major UK banks, just like those in Lower Manhattan, only continue to exist today because trillions of dollars were transferred from Main Street to Wall Street.
That’s the whole story, even if it’s not distributed in print.
And now Mr. King claims he cannot “prevent the squeeze” for everyday people, while London traders go home with multi-million dollar bonuses.
The main take-away from that is not even that the “standard of living is plunging” at its fastest rate in almost a century, it’s that the standards of honesty and dignity, of how to build a society, are plunging. Corruption and fraud have free rein.
King’s right when it comes to the end result, though, of course: the British future comes dressed as misery.
Yes, your future looks bad, and Mervyn King is telling you it would have been worse if you hadn’t bailed out the bankers and made sure they got their X-mas bonuses.
Come to think of it all that way, how is it possible that Britain doesn’t yet look like Tunisia, Yemen or Egypt, why are there no people in the streets, no riots, no nothing of the kind?
It’s not as if the Brits have rosier futures ahead of them then the Egyptians. But then they likely missed that part.
All parties are still stuck squabbling over the right path to -resumed- growth.
But real economic growth will not return anytime soon, if ever, in the western world, no matter what numbers anyone comes up with.
The European markets are up again, one day after the plunge in UK GDP was announced and Mervyn King gave out his “this is a Depression era” warning.
It’s like reality doesn’t matter anymore.
As in a whole-lotta shit nowadays, reality bites only the hand of the poor.