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Saturday 7th November 2020
Hi Friend,
Rishi Sunak ...
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| And The Trillion Pound Bank Note ...
Bad news for the economy this week, "Fears for Tiers" increased. The country was pushed into a second lock down, Covid infections are rising, warnings of an NHS overload emerged.
The Chancellor stepped up to ease the pain. The furlough scheme will be extended to the end of March. Universal credit may be extended, by a further £1,000 next year, for over six million people.
Government borrowing was expected to hit £350 billion in the current financial year, before the new spending plans were announced. The additional support schemes could add a further £30 billion to the spend. Debt levels could hit 20% of GDP this financial year. Not since the World Wars, of the twentieth century, has such excess been experienced in the UK.
The imposition of the second lock down will hit output, in the final quarter. Hotels, leisure, events, tourism, hospitality and the creative sector will suffer. Aviation and travel will be hit again. The motor trade will be damaged further, as showrooms are closed to visitors once more.
Non essential retail will be punished, especially in clothing and footwear. The critical run up to Christmas will be disastrous, if the lock down continues well into December. Winners, will be food supermarkets and online traders. The volume of home delivery will boost the parcel and logistics business. Shop early for Christmas, albeit for a smaller turkey this year.
Despite the wave of pessimism, the November lock down will not be as devastating as the first, especially if confined to a four week period. The Bank of England expects GDP output to fall by 11% in the current year. Earlier estimates had suggested a down turn of 9.5%. Unemployment is expected to peak in the second quarter of 2021 with 2.5 million people out of work, a U rate of 7.5%.
Central Government Liabilities will increase to £2.5 trillion before the year is out. How to pay for it all? Step up the Old Lady of Threadneedle Street. The Bank of England increased the level of government debt purchase by an additional £150 billion this month. The total stock of government bond purchases will increase to £875 billion as a result.
The pretense of QE now abandoned, the Bank is the "Buyer of Last Resort". The appetite from domestic pension funds and insurance companies, too low to absorb the flow. The Bank is creating the £1 trillion pound bank note to hand over to the Chancellor. No need to pay interest on the debt ... No need to worry about repayment either ... The Money For Nothing Gilts for Free process continues ...
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| Heading For The White House ...
"We are going to win", the confident claim of Vice President Biden. "We have already won" the confused claim of President Trump. The premature victory later to be "stolen" by late vote counts in contested states.
"Stop the count" supporters chant in Pennsylvania, all too late as Biden creeps ahead.
As we write the count is 253 for Biden and 213 for Trump. Add in Arizona and at 264 the challenger is just six votes short of victory. Biden is ahead in Pennsylvania. Victory nears. A win in Pa. and Biden is in the White House. Fox news anchors have been instructed not to use the term "President Elect" under any circumstances.
The President is angry and despondent as defeat looms. A rigged election and voter fraud the Trump claim. Major news networks cut away from Trump's baseless complaints during the White House news conference. Fox News and CNN stayed with it, but later reported the President offered no evidence of his accusations of fraud.
According to the Washington Post, advisers are urging Trump to prepare for defeat "They know he has lost but no one seems willing to tell King Lear or mad King George, they have lost the Empire".
"It is time to end the warfare" Biden tells Trump. Joe Biden has called for an end to the unrelenting and unending political warfare in the USA. An invitation to concede, pack up and leave? Perhaps.
The President is in no mood to abandon the Oval Office. Trump has told people he has no plans to concede even if his path to victory is blocked. Alternative facts suggest reports of defeat are just a lie. In White House speak, a lie is just a truth you don't not believe or fail, as yet, to accept.
In any case, the Democrats have made it clear ... "The United States Government is perfectly capable of escorting trespassers out of the White House ..." "The Blue Wave" will be waving from the balcony on the 20th January ...
That's all for this week! Have a great, safe, week-end ... Hands, Face and Space ...
John
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