It was this time last year that I fell out of love with London
Kensington was dirty, and the people grasping. The young women wore stiletto heals that were reminiscent of the foot binding days of the Chinese. All the shops had sales, although I am not a shopper, it was noticeable that along the strip the retailers were doing it tough. Clear signals of a weak economy.
The fact that it rained most of the week could have also contributed to my gloom. In one day alone we had boiling heat, torrential and flooding thunderstorm, hail, and a wind storm.
Across the street from my flat, and a floor lower was a gorgeous apartment. Decorated and furnished in the old English style it was immaculate, with real old world charm. The curtains were always open as though the owner was inviting people to glance in and admire.
The owner himself was of old world charm style, an English gentleman. Maybe ex military, because he stood tall and ramrod straight despite his clearly many years, and groomed to within an inch.
As I sat in the evening, it was the only time I saw him, despite having a clear view the entire length of his apartment. At that time, he would sit beside the window and read the paper, on occasion leaning into the window as the light faded, holding up the paper.
Maybe I am slow, but it took a few days to realise that he was using daylight to read by rather than turn on an overhead light. And further, that I at no time when glancing out the window saw lights – either overhead or from a flickering TV – in the evening. In the kitchen, I only ever saw tin cans on the bench, despite the inviting décor. It took me a little time to understand that all over London
And maybe like this gentleman, they lived a proud existence, and told nobody for the shame.
I have written about inflation and ivory towers, in which I suggested that the governments would soon (and again) be adjusting how they measure inflation to grab back money on say, pensions. Inflation is a number on which the whole world spins, whether measuring real investment returns, pensions adjustments, or planning for future expenditure.
And that the western economies are experiencing stagflation, whereby the cost of essentials – food, water, energy, healthcare – are rising faster than the income on which we rely to meet these essentials. And I don’t see how it is going to be any better for decades. (I took my own advice and bought a farm.)
Then a month ago there was this extraordinary article, as if to prove me completely correct. So that I am sure you have the benefit of reading it (and the following comments) here is the link in full.
I learnt various things from this article. First, that Bloomberg now had its own editors publishing editorials. When did that happen? Second, that they also posted comments about an editorial. Again, since when? Third that Bloomberg is still getting its facts wrong. Evan when written by the “editors” themselves, whose primary role is, after all, to edit the facts.
Here is the opening line: “Sadly, Congress and the White House seem incapable of agreeing on substantive measures to tackle the $10.4 trillion mountain of U.S. debt.”
Now the interesting thing about that line, is that the US
The article then goes on (the “slam dunk” in the heading is a tip to its quality) to say that the government should switch to a Chained Inflation measure rather than the standard measure used today.
Chained inflation is a measure, that reputedly tracks changes in consumer purchasing behaviour. The example they use is that when the price of a granny smith apple rises, the consumer switches to the lower cost red delicious apple.
Now, for sure you are getting the drift. As inflation on food essentials (as an example) keeps rising, people will continuously switch to lower and lower cost products. Cat food comes to mind, as it did to the many commentators who overwhelmingly mocked this article. Dog bones anybody? What inflation?
The “editors” suggested that this would save the government US$300 billion over ten years. No suggestion how this was going to pay down the debt. And at 0.2% it isn’t even enough to pay the interest on the debt.
And you guessed it, the savings came from: social security and cost of living adjustments; pensions; and probably food stamp recipients. The 99%.
And again this turns to a continuing theme in this blog – penny and diming the 99% whilst the 1% carry on. As pointed out in prior blogs, taxing the OTC derivative market, US$700 trillion and counting, just 0.1%, would raise US$700 billion. And if the duration of the OTC market is 3 months, that would be US$2.8 trillion per year, or enough to pay off the USA debt in total plus a huge surplus using Bloomberg’s 10 year measure.
Of course the USA London
And you guessed it, the Telegraph reports that that government is about to pennie and dime its citizens by adjusting how the RPI is measured. That's the retail price index.
It reports “A reduction in RPI would save the Government up to £3bn a year on the interest payments it makes on index-linked gilts, but would also slash income for pensioners and those whose pay packages are linked to the measure.”
Like the pension for that charming elderly gentleman living in Kensington. Or should I say, surviving, just!
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