-
I'm not sure what's so hard to understand about a business based in the uk deciding that if Corbyn hiked up the taxes and reduced their profits they'd take their head office to a country with lower tax rates . I think I remember something about Keys former employers moving to Ireland got that reason .
-
<blockquote class="ipsBlockquote" data-author="jegga" data-cid="515636" data-time="1442195346">
<div>
<p>I'm not sure what's so hard to understand about a business based in the uk deciding that if Corbyn hiked up the taxes and reduced their profits they'd take their head office to a country with lower tax rates . I think I remember something about Keys former employers moving to Ireland got that reason .</p>
</div>
</blockquote>
<p> </p>
<p>Companies can move profits as they see fit. It's a part of EU law</p> -
<blockquote class="ipsBlockquote" data-author="JC" data-cid="515625" data-time="1442190710">
<div>
<p>Did you read any further down that paragraph? If you give the market a signal that you will never pay it back, you are implying that you will expand the money supply <span style="color:#ff0000;">(bond can be issued rather than BoE reserves. That's why I would issue bonds not use reserves as it does not result in increased reserves or bank credit. But people have an irrational fear of Govt bond debt)</span> without limit. If I were still in the game I would interpret that in a couple of ways. First, the impact of the reduction in value of fixed income assets held by creditors would be immediate and increasing over time, so institutions and investors holding them immediately become less attractive to me, so I will sell them. Second, it would appear that monetary policy would have become entirely political. I would become disincentivised to hold assets issued by the government, in general because I could not trust their policy intentions, and specifically because those assets would, by design, decrease in value while I held them. I would sell them. <span style="color:#ff0000;">but banks who hold excess reserves or pension funds will always buy them</span></p>
<p> </p>
<p>Another thought: reducing the value of the fixed income cash <span style="color:#ff0000;">????? why would thsi happen</span> reduces the wealth of the creditors who hold it (from the point of view of a traditional socialist wealth redistributing politician this is probably seen as a good thing I suppose) but doesn't impact real assets, such as houses which you'd expect to increase in value. I can't imagine that helps the housing problem.</p>
<p> </p>
<p> </p>
<p>I didn't make a comment about investing in housing. I said there was not a UK housing shortage, there is a <strong>South East England</strong> housing shortage. That is demonstrably true, with large swathes of the north full of empty houses. But recent history has proven that immigrants to the UK prefer to live in London. I'm not certain what proportion of the immigrants Corbyn proposes to allow will choose to live elsewhere but there's no evidence to suggest they won't also want to live in London too. Now I may be wrong but could it be that the increased house building might only benefit people who are not yet even in the UK?</p>
<p> </p>
<p>I'm pretty sure when Jegga said money would flow he meant wealth would flow. Does that change your answer to his question?</p>
</div>
</blockquote> -
<blockquote class="ipsBlockquote" data-author="Winger" data-cid="515639" data-time="1442195523"><p>
Companies can move profits as they see fit. It's a part of EU law</p></blockquote>
<br>
That's if? Really? That's all you have to say?You can't see any negative effects for Corbyns plans from a decreased tax take and lower employment? -
<blockquote class="ipsBlockquote" data-author="jegga" data-cid="515642" data-time="1442197192">
<div>
<p>That's if? Really? That's all you have to say?You can't see any negative effects for Corbyns plans from a decreased tax take and lower employment?</p>
</div>
</blockquote>
<p> </p>
<p> </p>
<p>Companies do it now. Re employment. House building will increase employment</p> -
<blockquote class="ipsBlockquote" data-author="Winger" data-cid="515640" data-time="1442196099">
<div>
<p> </p>
<blockquote class="ipsBlockquote" data-author="JC" data-cid="515625" data-time="1442190710">
<div>
<p> <span style="color:#ff0000;">(bond can be issued rather than BoE reserves. That's why I would issue bonds not use reserves as it does not result in increased reserves or bank credit. But people have an irrational fear of Govt bond debt)</span></p>
<p> </p>
<p><span style="color:#ff0000;">but banks who hold excess reserves or pension funds will always buy them</span></p>
<p> </p>
<p>Another thought: reducing the value of the fixed income cash <span style="color:#ff0000;">????? why would thsi happen</span> reduces the wealth of the creditors who hold it (from the point of view of a traditional socialist wealth redistributing politician this is probably seen as a good thing I suppose) but doesn't impact real assets, such as houses which you'd expect to increase in value. I can't imagine that helps the housing problem.</p>
<p> </p>
<p> </p>
<p>I didn't make a comment about investing in housing. I said there was not a UK housing shortage, there is a <strong>South East England</strong> housing shortage. That is demonstrably true, with large swathes of the north full of empty houses. But recent history has proven that immigrants to the UK prefer to live in London. I'm not certain what proportion of the immigrants Corbyn proposes to allow will choose to live elsewhere but there's no evidence to suggest they won't also want to live in London too. Now I may be wrong but could it be that the increased house building might only benefit people who are not yet even in the UK?</p>
<p> </p>
<p>I'm pretty sure when Jegga said money would flow he meant wealth would flow. Does that change your answer to his question?</p>
</div>
</blockquote>
<p> </p>
</div>
</blockquote>
<p> </p>
<p><span style="font-size:12px;color:rgb(255,0,0);">bond can be issued rather than BoE reserves. That's why I would issue bonds not use reserves as it does not result in increased reserves or bank credit. <strong>But people have an irrational fear of Govt bond debt)</strong></span></p>
<p> </p>
<p>I've never found that, so long as the price is right and the risk is OK. But in an economy where the government is committed to a permanent expansion of the money supply what sort of rating do you think the agencies would give to the bonds? You might just have the perfect storm of bonds with little or no yield that are nevertheless not viewed as investment grade. Would you buy a bond like that?</p>
<p> </p>
<p>In any case, fearing bonds issued by a government whose monetary policy is dictated by politicians doesn't sound the least bit irrational to me. It's not that long since the BofE was given its independence and the credibility it gained was greeted with some relief by the markets. How quickly people forget, eh?</p>
<p> </p>
<p><span style="color:rgb(255,0,0);font-size:12px;background-color:rgb(247,247,247);">but banks who hold excess reserves or pension funds will always buy them</span></p>
<p> </p>
<p>Again at what inflationary price? Corbyn and his advisors have defined (for me at least) an economy that is inherently more risky than one in which monetary policy is determined solely by money supply, where politicians are using the Bank of England as a proxy for their social policy. </p>
<p> </p>
<p><span style="font-size:12px;background-color:rgb(247,247,247);">reducing the value of the fixed income cash </span><span style="font-size:12px;color:rgb(255,0,0);">????? why would thsi happen</span></p>
<p> </p>
<p>Remember economics 101? Changes in the stock of money lead to proportional changes in the price level. Increasing the money supply is inflationary, and inflation destroys wealth.</p>
<p> </p>
<p>Look, I know it's probably cynical but when I hear socialist and monetary policy in the same sentence I can't help but think of command economies. China's one isn't going so well at the moment is it?</p> -
<blockquote class="ipsBlockquote" data-author="Winger" data-cid="515655" data-time="1442199419">
<div>
<p>Companies do it now. Re employment. House building will increase employment</p>
</div>
</blockquote>
<p> </p>
<p> </p>
<p>What nonsense. You can't pay for those houses if the people who pay the taxes to pay for them have gone.</p> -
<blockquote class="ipsBlockquote" data-author="jegga" data-cid="515688" data-time="1442208059">
<div>
<p>What nonsense. You can't pay for those houses if the people who pay the taxes to pay for them have gone.</p>
</div>
</blockquote>
<p>But Winger's argument is that you can: you can borrow the money and just never pay it back.</p>
<p> </p>
<p>In theory he's right, but in practice it's not much different to borrowing money on your credit card to pay your staff's wages, taking advantage of the 0% welcome rate, then when the rate holiday ends getting the balance transferred onto a new credit card with a 0% welcome rate. Then the long-term plan is to make enough someday that you'll be able to pay off whatever credit card you're using at the time so it's all good.</p>
<p> </p>
<p>It becomes more difficult if you have to keep paying your staff that way for some time though, but if you can keep the credit card companies from noticing what you're doing, say through a credit agency, it might just work. I don't know why everyone doesn't do it.</p> -
<blockquote class="ipsBlockquote" data-author="JC" data-cid="515693" data-time="1442208949">
<div>
<p>But Winger's argument is that you can: you can borrow the money and just never pay it back.</p>
<p> </p>
<p>In theory he's right, but in practice it's not much different to borrowing money on your credit card to pay your staff's wages, taking advantage of the 0% welcome rate, then when the rate holiday ends getting the balance transferred onto a new credit card with a 0% welcome rate. Then the long-term plan is to make enough someday that you'll be able to pay off whatever credit card you're using at the time so it's all good.</p>
<p> </p>
<p>It becomes more difficult if you have to keep paying your staff that way for some time though, but if you can keep the credit card companies from noticing what you're doing, say through a credit agency, it might just work. I don't know why everyone doesn't do it.</p>
</div>
</blockquote>
<p> </p>
<p>Oh that sounds perfectly feasible with no repercussions , why isn't everyone doing that? </p>
<p> </p>
<p>The Uk press has been fairly excoriating over the election, not even the Guardian seems to thinks its a great move for the Labour party . This piece here about the future for the party is worth a read , <a data-ipb='nomediaparse' href='http://www.telegraph.co.uk/news/politics/Jeremy_Corbyn/11860462/Corbyns-victory-reveals-Labours-revulsion-with-real-voters.html'>http://www.telegraph.co.uk/news/politics/Jeremy_Corbyn/11860462/Corbyns-victory-reveals-Labours-revulsion-with-real-voters.html</a> </p> -
<blockquote class="ipsBlockquote" data-author="JC" data-cid="515693" data-time="1442208949">
<div>
<p>But Winger's argument is that you can: you can borrow the money and just never pay it back.</p>
<p> </p>
<p>In theory he's right, but in practice it's not much different to borrowing money on your credit card to pay your staff's wages, taking advantage of the 0% welcome rate, then when the rate holiday ends getting the balance transferred onto a new credit card with a 0% welcome rate. Then the long-term plan is to make enough someday that you'll be able to pay off whatever credit card you're using at the time so it's all good.</p>
<p> </p>
<p>It becomes more difficult if you have to keep paying your staff that way for some time though, but if you can keep the credit card companies from noticing what you're doing, say through a credit agency, it might just work. I don't know why everyone doesn't do it.</p>
</div>
</blockquote>
<p> </p>
<p>I worked with a dude in the uk who had 20 cards... withdrew cash off 1 card, balance transferred to another card.. repeat til all maxed out.</p>
<p> </p>
<p>stick money (think he had about 150k) into a mortgage offsetting account. pay off min each month.. end of zero percent period close all cards and repeat!</p>
<p> </p>
<p>basically was getting an interest free mortgage. Wingers onto something. You should listen to him.</p> -
Vote tonight and it's going to mean someone's job either way. Someone will step away from politics tonight. <br><br>
The key is Julie Bishop. She carries the WA block and right now with the Canning by-election this Saturday, they are a very influential bunch right now. <br><br>
Some conservatives in the Liberal Party cannot stand Turnbull, but they know Shorten wouldn't stand a chance against Turnbull. -
<blockquote class="ipsBlockquote" data-author="JC" data-cid="515693" data-time="1442208949">
<div>
<p>But Winger's argument is that you can: you can borrow the money and just never pay it back.</p>
<p> </p>
<p>In theory he's right, <span style="color:#ff0000;">but in practice it's not much different to borrowing money on your credit card</span> to pay your staff's wages, taking advantage of the 0% welcome rate, then when the rate holiday ends getting the balance transferred onto a new credit card with a 0% welcome rate. Then the long-term plan is to make enough someday that you'll be able to pay off whatever credit card you're using at the time so it's all good.</p>
<p> </p>
<p>It becomes more difficult if you have to keep paying your staff that way for some time though, but if you can keep the credit card companies from noticing what you're doing, say through a credit agency, it might just work. I don't know why everyone doesn't do it.</p>
</div>
</blockquote>
<p> </p>
<p>This is the mistake that many economists also make.</p>
<p> </p>
<p>They see a monetary sovereign Govt like the UK as no different to a household or company (or non monetary sovereign Govt like Greece,Spain or the UK in the ECM etc). This mistake could destroy the West. Due to ignorance about money and debt</p>
<p> </p>
<p>Debt is needed. To back money. To back our saving as we age. And to back company profit. Otherwise one companies profit is offset by other companies losses. This is just an unavoidable fact of life. And at present individuals have taken on almost all the debt they can. There is a limit to how much more we can all pay for property. Or debt students or companies etc can take on. So the only option is monetary sovereign Govts who can take on debt without limit. (despite what some ignorant economists and politicians believe). The question is how best to do this so we all benefit not just a few without creating inflation or currency depreciation.</p> -
<blockquote class="ipsBlockquote" data-author="WillieTheWaiter" data-cid="515699" data-time="1442210567">
<div>
<p>I worked with a dude in the uk who had 20 cards... withdrew cash off 1 card, balance transferred to another card.. repeat til all maxed out.</p>
<p> </p>
<p>stick money (think he had about 150k) into a mortgage offsetting account. pay off min each month.. end of zero percent period close all cards and repeat!</p>
<p> </p>
<p>basically was getting an interest free mortgage. Wingers onto something. You should listen to him.</p>
</div>
</blockquote>
<p> </p>
<p>But I'm not suggesting this for anything or anyone but monetary sovereign Govts. Not even for Greece in the Euro or any country that does not have a floating currency</p>
<p> </p>
<p>Why do people find it so hard today to differentiate between a MS Govt in a stable country to an irresponsible person. And also believe that people taking on debt to buy or build a valuable asset is ok or even a smart move (like a house) but not a big government doing likewise.</p> -
<blockquote class="ipsBlockquote" data-author="Winger" data-cid="515655" data-time="1442199419">
<div>
<p>Companies do it now. Re employment. House building will increase employment</p>
</div>
</blockquote>
<p> </p>
<p>You are right on this. The massive burst in house building over a 2 or 3 year period will make a shitton of jobs. For that 2 or 3 year period. You can't just keep building them forever... not unless you build them REALLY badley</p>
<p> </p>
<p>And as there is a shortage of builders in the UK they will be Polish, Irish, NZ builders. Who will send their money home. And then leave. And the million new houses will depress the property market. At a time of all time low mortage rates when people are barely able to get remortaged (many are not) because they don't have enough equity. So that policy means upwards of a million people have their houses repossed.</p>
<p> </p>
<p>So the net effect of rapidly building a million homes is a boost to the economy of Poland, and crashing the UK housing market.</p>
<p> </p>
<p>Add to this the demonisation of the rich meaning the other thing propping up UK housing (with the zero rates) being massive foreign & buy to let ownership of flats gets pulled too. Now I'm very much in favour of that one being pulled, but gradually (as Osbourne is actually doing now). As it will crash the South East - the one bit of the UK housing market that hasn't crashed.</p>
<p> </p>
<p>Then come onto higher taxes for the rich. The great thing about being rich is you can choose where you want to live. So you can just move. To Switzerland, to Singapore, to New York... so they can go, good ridance to them. And also good ridance to the 30% of HMRC revenue the 1% at the top pay. </p>
<p> </p>
<p>So now we've crashed housing in the south east, cut tax revenue by 30% (ignoring the jobs they created & took with them). So we will just print money to take care of that, Which is fine as we never have to repay that. But actual government debt issued to 3rd parties we DO have to repay, and we do have to pay interest on that debt.</p>
<p> </p>
<p>And the way that works is if your country is an inflationry nightmare that is devaluing its currency every 5 minutes, you need to pay MUCH higher interest. Lets not even mention Argentina or Greece. NZ can issue 10 year debt at 3.2%. The UK can curently issue at 1.8%. Thats because Sterling is a better bet that NZ $. (remember NZ has a rockstar economy & the UK is tied to Europe & has issued £300bn in QE). So the cost of any issued debt will go up. And for businesses because they are issuing in GBP, and because the UK is printing cash & devaluing GBP, the rate they have to pay goes up.</p>
<p> </p>
<p>So for example, Thames Water is the company that supplies water services in London. At the moment, because sterling is stable, it can issue debt at about 6%. So to rebuild the London pipes it can issue £500m in bonds, at 6%. Upgrade pipes, which cuts leaks & makes long term water rates go down (tho' it'll obviously pass on the 6% cost to costomers). But now Sterling is in free fall because of excessive (and never ending) QE, so they can't get debt at 6%, they get it at 10%. Which they pass directly on. Boosting inflation & hitting every household in London. Thats only an issue for Thames Water tho' - as they obviously can't relocate to Italy, or Germany. Most companies can do exactly that. </p>
<p> </p>
<p>So all in all looking good for the UK with Corbyn in charge. Which he never will be.</p>
<p> </p>
<p>Tho' alas we will also miss out on Tony Blair being charged with war crimes (which Corbyn put forward)... That would have been fucking great. </p> -
<blockquote class="ipsBlockquote" data-author="gollum" data-cid="515726" data-time="1442223606">
<div>
<p>You are right on this. The massive burst in house building over a 2 or 3 year period will make a shitton of jobs. For that 2 or 3 year period. You can't just keep building them forever... not unless you build them REALLY badley</p>
<p> </p>
<p>And as there is a shortage of builders in the UK they will be Polish, Irish, NZ builders. Who will send their money home. And then leave. And the million new houses will depress the property market. At a time of all time low mortage rates when people are barely able to get remortaged (many are not) because they don't have enough equity. So that policy means upwards of a million people have their houses repossed.</p>
<p> </p>
<p>So the net effect of rapidly building a million homes is a boost to the economy of Poland, and crashing the UK housing market.</p>
<p> </p>
<p>Add to this the demonisation of the rich meaning the other thing propping up UK housing (with the zero rates) being massive foreign & buy to let ownership of flats gets pulled too. Now I'm very much in favour of that one being pulled, but gradually (as Osbourne is actually doing now). As it will crash the South East - the one bit of the UK housing market that hasn't crashed.</p>
<p> </p>
<p>Then come onto higher taxes for the rich. The great thing about being rich is you can choose where you want to live. So you can just move. To Switzerland, to Singapore, to New York... so they can go, good ridance to them. And also good ridance to the 30% of HMRC revenue the 1% at the top pay. </p>
<p> </p>
<p>So now we've crashed housing in the south east, cut tax revenue by 30% (ignoring the jobs they created & took with them). So we will just print money to take care of that, Which is fine as we never have to repay that. But actual government debt issued to 3rd parties we DO have to repay, and we do have to pay interest on that debt.</p>
<p> </p>
<p>And the way that works is if your country is an inflationry nightmare that is devaluing its currency every 5 minutes, you need to pay MUCH higher interest. Lets not even mention Argentina or Greece. NZ can issue 10 year debt at 3.2%. The UK can curently issue at 1.8%. Thats because Sterling is a better bet that NZ $. (remember NZ has a rockstar economy & the UK is tied to Europe & has issued £300bn in QE). So the cost of any issued debt will go up. And for businesses because they are issuing in GBP, and because the UK is printing cash & devaluing GBP, the rate they have to pay goes up.</p>
<p> </p>
<p>So for example, Thames Water is the company that supplies water services in London. At the moment, because sterling is stable, it can issue debt at about 6%. So to rebuild the London pipes it can issue £500m in bonds, at 6%. Upgrade pipes, which cuts leaks & makes long term water rates go down (tho' it'll obviously pass on the 6% cost to costomers). But now Sterling is in free fall because of excessive (and never ending) QE, so they can't get debt at 6%, they get it at 10%. Which they pass directly on. Boosting inflation & hitting every household in London. Thats only an issue for Thames Water tho' - as they obviously can't relocate to Italy, or Germany. Most companies can do exactly that. </p>
<p> </p>
<p>So all in all looking good for the UK with Corbyn in charge. Which he never will be.</p>
<p> </p>
<p>Tho' alas we will also miss out on Tony Blair being charged with war crimes (which Corbyn put forward)... That would have been fucking great. </p>
</div>
</blockquote>
<p> </p>
<p> </p>
<p>Please get it right. People do not send money home. They would use £s to buy NZ$'s. The money stays in the UK. This is very different to Euro countries. And its one of the keys to understanding why countries like Greece are in the shit</p>
<p> </p>
<p>And what is so wrong with housing that people can afford to live in without being burdened with massive debt for life. Or do you want prices to keep on going up and up due to future massive shortages</p>
<p> </p>
<p>And why go the irrelevant Greece and Argentina route. Greece does not have their own currency so is no different to a company. Argentina is a different country to the UK but he's recent articles on this country (not when they were fixed to the US dollar and issued bonds denominated in US dollars = like Greece)</p>
<p> </p>
<p><a data-ipb='nomediaparse' href='http://www.economonitor.com/lrwray/2012/10/09/mmt-argentina-and-views-on-inflation/'>http://www.economonitor.com/lrwray/2012/10/09/mmt-argentina-and-views-on-inflation/</a></p>
<p> </p>
<p><a data-ipb='nomediaparse' href='http://www.economonitor.com/blog/2015/06/argentina-at-a-crossroads/'>http://www.economonitor.com/blog/2015/06/argentina-at-a-crossroads/</a></p> -
<blockquote class="ipsBlockquote" data-author="Winger" data-cid="515728" data-time="1442224100">
<div>
<p>Please get it right. People do not send money home. They would use £s to buy NZ$'s. The money stays in the UK</p>
<p> </p>
<p>This is very different to Euro countries. And its one of the keys to understanding why countries like Greece are in the shit</p>
<p> </p>
<p>And what is so wrong with housing that people can afford to live in without being burdened with massive debt for life. Or do you want prices to keep on going up and up due to future massive shortages</p>
</div>
</blockquote>
<p> </p>
<p>Well first money is just a unit of exchange, so when they send money home what they are actually doing is exchanging one unit of exchange for another. Which they then spend. So if I earn GBP, exchange it for NZD, go to NZ & spend it, its not then helping the UK economy. Unless you can explain how it is... to me it looks like all its doing in the UK is changing the currency reserves.</p>
<p> </p>
<p>Second, yes, its lovely if people can live in affordable housing. The problem there is to get affordable housing you have to reduce the current value of housing in the UK. EG the average house in London costs 300k. Thats not affordable, so you hit buy to let, you build a million homes, that crashes the property market. Now the homes that were worth 300k & worth 200k. Which is awesome. Unless you owned a home.</p>
<p> </p>
<p>We already have at least 750,000 people in the UK on interest only mortgages, unable to remortage because they don't have enough equity. And because they can't remortage they are paying the variable rate, and thats more or less doable because UK rates are at the lowest they have ever been. When those rates go up they are fucked. So its a race for those folks to save for a deposit, or for their house to go up in value, so that when rates rise they can remortage with equity. And you want to crash prices.... </p>
<p> </p>
<p>Maybe it needs to be simpler.</p>
<p> </p>
<p>Millions of people in the UK live in houses with 10% equity or less. They are barely making payments <em>with rates in the shitter</em> - interest in the UK depends on equity, you have 10% equity you might pay 5%, 25% equity 3%, 40% equity 2%. You want to wipe out their equity. So they will drop onto the variable rate - 6%. Then rates go up (they can only go up). And literally millions of UK house owners default. </p> -
No Gollum no, Winger and Corbyn are right . Despite the fact the hard left socialist governments pretty much always lead to a financial meltdown of varying proportions and usually end up with years of hardship trying to dig themselves out of holes people like Muldoon created you are wrong .<br><br>
Things are cool in Venezuala right now aren't they? No how about Greece? -
<blockquote class="ipsBlockquote" data-author="jegga" data-cid="515741" data-time="1442227404">
<div>
<p>No Gollum no, Winger and Corbyn are right . Despite the fact the hard left socialist governments pretty much always lead to a financial meltdown of varying proportions and usually end up with years of hardship trying to dig themselves out of holes people like Muldoon created you are wrong .<br><br>
Things are cool in Venezuala right now aren't they? No how about Greece?</p>
</div>
</blockquote>
<p> </p>
<p> </p>
<p>The neo-liberal, uncaring, stuff the poor as long as its not me hard right can't help themselves.</p>
<p> </p>
<p>Labeling slightly left of center policies hard left. And automatically comparing a MS Govt running economically sensible deficits even to invest in valuable assets to a country like Greece etc when this comparison is completely and utterly meaningless.</p>
British Politics