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Austerity
During the period of austerity that followed the 2008 economic crash, the Department of Health and Social Care budget continued to grow but at a slower pace than in previous years. Budgets rose by 1.4 per cent each year on average (adjusting for inflation) in the 10 years between 2009/10 to 2018/19, compared to the 3.7 per cent average rises since the NHS was established.
https://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget
https://www.theguardian.com/books/2016/dec/08/uk-library-budgets-fall-by-25m-in-a-year
https://fullfact.org/health/spending-english-nhs/
https://cpag.org.uk/sites/default/files/files/Austerity%20Generation%20FINAL.pdf
Quite agree Mr Gnome,
In the past all big companies handled their own transport and distribution, they had their own fleet and maintenance facilities, they hired and also trained their own drivers and there was a two way commitment between company and employee.
Then in the quest cut costs and increase profits companies sacked their own staff to use so called logistics specialists. usually shi(ts who just use agencies to supply their staff as and when!
Now the drivers have to pay for HGV training and are regarded he logistics companies as part of the truck rather than a person!
Exactly the same has happened with public transport all over the UK as a result of Nicolas Ridley's deregulation in the eighties under Thatcher which resulted in the asset stripping of municipal and publicly bus and rail companies and also because it was a way of getting at the unions and cutting staff pay and conditions of employment!
Most of this present chaos has been brought about by the free markets asset stripping policies of the Conservative party
Thatcher bribed voters with 40% discounts on buying council houses and sold the public services & utilities to the public who failed to understand they were buying what they already owned!
The answer is to renationalise all the power utilities,water companies public transport,start building local authority owned social housing and make the big tech,Facebook, Google and other international companies like Amazon, Starbucks, McDonalds, etc that are behaving like parasites start paying the right amount of tax, or kick them out!
The private sector and certainly the Tory government has now proven they not to be trusted or capable when it comes to providing essential and public services!
A word I like to use is ' muddling along' that is what most of us do for most of the time .. until of course a huge and sometimes unexpected event happens. Like Covid last year.
Most governments did respond to cushion the blow, but in doing so, they have no run out of all ammunition.. others prospered from it though . I made a huge amount of money last year with my contrarian 'recovery' strategy for stocks. .
This hasn't been repeated so far this year , with my selection of Centamin , so reading your posts on their prospects goldgnome brings me hope..
Regarding the unexpected shocks .. well the Dow , S&P.and Nasdaq are all extremely overvalued right now , by any measure you choose . The fact that it will crash at some point cannot be in doubt. It will happen. but that doesn't mean that in the mean time it won't continue to get even higher , but it's a bit like an elastic band , you can stretch and stretch it for so long, but then one of two things happens , it either springs back to past its starting point and we have all been there , or it snaps completely ..I am 63 now and that hasn't yet happened in my lifetime, so I have no idea of what that scenario will look like
I guess we all should invest in a little gold , as a last line of defence against an oncoming apocolypse ..
Or maybe I am being too dramatic and instead things will continue to " muddle along "
There is potential for a lot to happen. There are a lot of unhappy people, unemployed, underemployed, and employed but have not had a pay rise in years, etc and v little on the horion, (if they keep their jobs!). The traditional way of justifying a pay rise is a producivity increase, and this is almost impossible to imagine. Bureaucracy has gone mad, logistics is a disaster area, negatively impacting on, stock, supply lines, production, Universities have been shown to be a tad short on the money in their business model turning out graduates who do not know anything about entrepreneurism let laone how to do things...(not to mention management prowess), woke has spoke and continues to do so. Thanks goodness for commodity prices in Oz. I am titillated by the supersized evaluations on the new technology companies, most of which appear to have a very thin moat, and I guess it follows a short life, so best to ramp and dump as quick as possible.
Possibly a tad jaded commentary,
Whichever way they wiggle is going to cause more discomfort, to a a lot of people who are not at all comfortable now.
best
the Gnome
A bigger risk might be the resulting hyper inflation as governments wont be able to afford the INTEREST payments on their debt , let alone wind it down .
Something will have to give ...nothing like a bout of hyper inflation to erode the real value of debt ..doesn't come without a cost elsewhere of course . In the end it's all a zero sum game .
Reserve Bank of Australia in their June 2021 bulletin, titled The Global Fiscal Response to COVID-19 , mentioned ...“globally, the fiscal policy response to the COVID-19 crisis has been the largest and fastest in peacetime”.
https://www.rba.gov.au/publications/bulletin/2021/jun/the-global-fiscal-response-to-covid-19.html
According to the researchers, higher levels of government spending will continue after infections have been brought under control, although the emphasis will shift, with “a greater focus on public investment, particularly in green and digital initiatives, incentives for more consumption and private investment, and retraining programs for workers in those sectors that are expected to have been severely impacted during the pandemic”.
Not surprisingly, this surge in spending has pushed global government debt levels to the highest level since World War II.
According to the Institute of International Finance, global government debt climbed to 105 per cent of global gross domestic product in 2020, from 88 per cent before the pandemic.
https://www.iif.com/Research/Capital-Flows-and-Debt/Global-Debt-Monitor
Dillon Hale is an advisor to family offices.
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Total government debt could rise by an extra $US10 trillion ($13.7 trillion) this year to hit $US92 trillion, with developing countries accounting for the bulk of the increase.
The risk, of course, is that financial markets will eventually become anxious about this explosion in government debt, and will push interest rates higher to compensate for the growing risk.