Timing, as in sex and drumming, is everything!

Yes, yes, I know, I trot that old saying out pretty regularly but if I can't be a bit of a bore at my age and on my own blog then where and when can I be?  Anyway, I repeat the adage because with the sort of luck that sometimes drops on simpletons instead of the usual bird shit, 'Dim Dave' and his stumblebum partner, Georgie Osborne, may, just, be in receipt of a large dollop of good fortune.  According to young Master Fraser Nelson at The Coffee House, 'everything's coming up roses' in the British economy.  More important is that it is doing so at just about the right time, that is, on the way towards the next election.  Here is a diagram showing the consensus of GDP growth from various experts issued by the Treasury:

 

Month after month, the consensus figure for 2014 growth has risen. The European Commission today fall in behind the consensus of 2.2 per cent. Citi thinks 3 per cent is closer to the mark.

This cheerful news is confirmed by a seperate but very important survey called the services purchasing managers’ index (PMI) which has a long historical record of more or less matching GDP growth exactly, as this diagram shows:

 

As Nelson points out, with considerable relish, this is truly Bad News for the 'Milipede'.  If there is any truth in that old saying that "it's the economy, stoopid" then 'Ed the leader' has a real fight on his hands not helped by the fact that he has to carry 'Ed the Brokers Man' on his back.  How many Tory attack ads will feature Ed Balls and his constant hand gesture at Question Time in the Commons indicating that the Tories were 'flat lining' the economy?  He knew nothing when he was Chancellor and the economy crashed, the Tories will crow, and he knows nothing now because the economy is rocketing upwards.

Of course, 'many a slip twixt cup and lip' and there are all sorts of potential slips, if not downright catastrophes, possible over the channel, in the middle east and/or even 'over there'.  And nor is it plainsailing 'over here' because, again as Nelson reminds us, George is still borrowing like one of those mugs desperate to use pay-day loan sharks.  Similarly, the printing presses are still churning out the dosh and if this new Canadian Governor of the Bank of England starts playing the hard man before the election then all bets are off.

However, one thing is now clear beyond any doubt - Ed Miliband is unfit to run a parish council let alone a country.  His total ignorance of how a nation's economy actually works is only exceeded by that of his shadow Chancellor.  His ill-thought out and opportunistic pronouncements on the sort of interventions his government would make were designed totally for cheap headlines.  Perhaps, just perhaps, 'The People' (dread words!) will 'suss' that out in time.

 

Comments

[Able]

GDP is such a manipulated indicator I wonder. (All that 'welfare' money moving about is counted as a positive you know?)
.
Did you see this?:

http://zerohedge.blogspot.co.uk/2009/05/annihiliation-of-dollars-purchasing.html

I wonder what the same for the pound would look like. I vaguely remember a description on the effects of inflation on buying power phrased in a useful (LIV proof) manner:

'In 1920 a gentleman could buy a nice bespoke Saville Row suit for an ounce of gold (≈ £20). In 2010 a gentleman could buy a nice bespoke Saville Row suit for an ounce of gold (≈ £1500). The suit is the same, the gold is the same but the money? £1 is now worth 0.01333r (1%) of its worth in 1920. £1 in 1974 (gold price £154/ounce) is worth ≈10p now. So 99% since 1920, 90% since 1974 all due to inflation. You are being robbed by the government continuously, on a daily basis, and you don't even notice it.'

With QE, I wonder how much £1 is worth now?

[Furor Teutonicus]

XX As Nelson points out, with considerable relish, this is truly Bad News for the 'Milipede'.XX

Assuming, of course, that the voting public have an IQ greater than their shoe size, or can even SPELL "I.Q."

[David Duff]

That is all logical and true, Able, but the fact is that more people today can afford to buy a Saville Row suit than they could in 1920 which points to a rise in prosperity. Even so, you are quite right to point up the underhand theft inherent in inflation.

And there was me, FT, thinking that *I* had a low opinion of my fellow subjects!

[Able]

Prosperity? Wealth? Hmm, where did it all come from? New industry, technology - some certainly, oil especially. Price reductions/efficiency? Some certainly, food especially. But does a house cost so much less and is a wage so much more relatively now than then? Are we so much more productive and simply worth more now than then? (cost of living and houses prices compared to wages of 'trades' was an almost constant for over a century until rather recently you know - the difference is in what we can now borrow).

Nope, the 'prosperity' we enjoy is based on the differences, a fiat currency, printing a never-ending supply of new cash to pay for it all, and unbelievable amounts of borrowing. Hey Ho, lovely for us living on tick, but just wait till the kids see the bill!

[dearieme]

"He knew nothing when he was Chancellor": really? I must have missed that.

[David Duff]

The whole concept of relative wealth is hugely complicated, as you indicate, Abel. Not the least of the difficulties, again as you indicate, are the ingredients that go towards 'wealth'. But once they measured things in gold and then moved on to money, well, away we went. Now we are poised to do away with money altogether and simply have printed statements telling us what we are, or are not, worth. It's rather like that silly film (I never saw it!) in which the hero was on a bus which had to keep moving at a minimum of 30mph or a bomb would go off!

Now look here, DM, I can't have you coming in here picking my nits over simple things like facts! Dammit man, I was in full grump mode and whether or not Ed Balls was Chancellor, or just the man who pulled Alistair Darling's strings, is a footling fact of no importance.

[Michael Adams]

Able, Oy! It's not Queen Elizabeth's fault! She's a very nice lady.

[David Duff]

Very witty, Michael! Mind you, the first Queen Elizabeth managed her 'Quantative Easing' by chopping off a few heads. We might do worse than follow her example!

[Michael Adams]

Now, if we may return to reality, yes 'Quantitative Easing' is just another form of the con of public economics. Yes, a Saville Row suit might not be the best choice as a comparator, since they are still hand made and labor costs might well rise, but the cost of a house? Even with the jump in building costs in the 1918 to 1922 period can not account for the huge inflation in the (paper) price of a house over that ninety three year period. Of course they inflate money. Of course they borrow money that they fully intend to repay only in part, because they will be paying with marked down money. That's a huge part of the Obama scam, running us into astronomical levels of debt, easy money now, 'easy payment plan,' later. Anyone who cares to know is fully aware that a two percent annual inflation rate is US government policy. Oh, and that suit? Not many people could afford a Saville Row suit in 1920, nor now, either. More people can afford those half factory/half hand made goods from Burton's. (They are still in business, aren't they?)That is a gain in productivity, and we can expect more of that, as computers get more involved in the process. Still, those gains in productivity only mask a bit of the inflation. It's still there. It's still government policy.It's still theft.

[Able]

Michael

Ready for the release of 'Housing Bubble Part Deux - (The Wrath of Bernake)? Coming to a down-town multiplex near you, soon.

[Lawrence Duff]

First time I've seen a chart like this - leader of the pack and whipping the Jerries into second place: -

http://www.telegraph.co.uk/finance/economics/10427815/UK-growth-to-outpace-Germany-for-next-two-years.html

Gotta Love that QE.

SoD

[Michael Adams]

Well, I am buying gold, as much as I can afford on my income, and hoping for another housing collapse. I got to see one from the other side, twenty five years ago. Maybe it's coming around to my turn?

[Andra]

I'm very keen on gold. I save it.
I've also just bought my 4 year old grandson a drum kit.
The question must be asked, is this the start of dementia?
Knok and/or ring if an anser is required.

[David Duff]

Apart, SoD, from the fact that you can't trust EU stats further thanyou can piss into a gale, it will all disappear the minute the BOE stops printing!

I think you might be on a long term winner, Michael. In the meantime, 'buddy can you spare a dime?'

Yes but, Andra, if you and I (and 'Big Sis') get dementia, will anyone notice?