Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Tax Cuts and Free Money in Japan

Politics / Deflation Nov 18, 2008 - 08:32 AM GMT

By: Mike_Shedlock

Politics Best Financial Markets Analysis ArticleThe Times Online is reporting Ministers admit that tax rises will follow Gordon Brown's tax cuts .
Tax rises are set to follow next week's tax cuts, ministers admitted yesterday as Gordon Brown raised the spectre of deflation in Britain for the first time.

David Cameron predicted a tax-raising “bombshell” after Lord Mandelson, the Business Secretary, spoke of the need for “structural adjustments later on” and Mr Brown himself accepted that the Pre-Budget Report (PBR) stimulus would be “temporary”.


As the Prime Minister, reporting back to MPs from the Washington summit, predicted that governments across the world would soon be cutting taxes or raising spending, Mr Cameron told him to come clean and admit that his higher borrowing meant “higher taxes tomorrow”.

But the Prime Minister accused the Tories of failing to understand that, while the problem in recent years had been inflation, next year the problem was “deflation and the problem of inflation close to zero”. Deflation means a period of consistently falling prices that can stall economic activity and eventually lead to depression.

Deflationary Hurricanes

Flashback June 30, 2008: Deflationary Hurricanes to Hit U.S. and U.K.
Barclays: Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral. If it hesitates, the bond markets will take matters into their own hands. "This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond.

Mish: If Barclays is betting on six interest rates hikes in the US with its own money it will likely get carted out in a coffin. Property values are crashing, unemployment is rising, wages are falling, global wage arbitrage is king, and most importantly Peak Credit Has Arrived .

Barclays Attempts To Placate shareholders

Bloomberg is reporting Barclays Changes Share-Sale Plans, Puts Board to Vote .

Barclays Plc, the U.K.'s second biggest bank, offered institutional investors as much as 500 million pounds ($750 million) of stock reserved for Persian Gulf funds and said management will stand for re-election next year.

Barclays rose as much as 4.9 percent in London trading after sovereign wealth funds in Qatar and Abu Dhabi each agreed to release as much as 250 million pounds, or 17 percent, of the 1.5 billion pounds of preferred stock they had planned to buy, the London-based bank said today in a statement. Barclays's entire board will be up for re-election next year, and executive directors agreed to waive bonuses.

Chairman Marcus Agius is trying to placate investors after Barclays agreed to sell about a third of itself to Persian Gulf investors to meet new U.K. capital requirements. Shareholders have complained that Barclays, which avoided the government's bailout plan and its restrictions on dividends and executive pay, is paying too much and diluting other stakeholders by selling to Mideast funds.

Free Money In Japan

Competitive currency debasement is now underway with the US, UK , China, and now Japan all giving away money in economic stimulus plans. One irony is that Japanese citizens don't want the money as noted in Free Money? In Japan, Most Say They Will Pass .

Japan is having trouble giving away a free lunch. To perk up the fast-shrinking economy, Prime Minister Taro Aso announced late last month that his government would give everybody money. A family of four would get $600.

Then the trouble -- and the confusion -- started. Should rich people get it? How rich is rich? Who decides who is rich, and how long will it take to decide?

Kaoru Yosano, the minister for economic and fiscal policy, said that perhaps the rich should not get any money.

Then his finance minister, Shoichi Nakagawa, said that figuring out who is too rich for a handout would create an excessive workload for local governments.

Now it turns out that voters do not want the money.

Sixty-three percent said they think that a handout is unnecessary, according to a poll published Wednesday in the Asahi, a national daily. Every age group opposes it, as does a majority in Aso's ruling party, the poll found.

On Wednesday, senior lawmakers in Japan's ruling coalition decided to punt on the question of giving all citizens a free lunch.

They announced at a news conference that the national government will let local governments decide whether rich people should get the money.

No one wants the money in Japan. Meanwhile back in the US, most have a butterfly net in both hands waiting for a helicopter drop to come their way.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

I do weekly podcasts every Thursday on HoweStreet and a brief 7 minute segment on Saturday on CKNW AM 980 in Vancouver.

When not writing about stocks or the economy I spends a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com .

© 2008 Mike Shedlock, All Rights Reserved

Mike Shedlock Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in