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Posted: May 26, 2012 in This is the Voice of Lefty Reason

Just a mo..

Christine Lagarde, the IMF leader spoke this week of the need for Britain to boost demand in our economy.   This would seem like a silver bullet to CamOs who continue to preach cuts, austerity and belt-tightening as the only way. She mentioned both Quantitive Easing and the importance of the Interest Rate. The  Interest Rate is currently at 0.5%; making borrowing cheap and saving a pretty forlorn affair.  In theory we Brits should be borrowing and spending like lunatics so driving demand for goods and services and the labour needed to produce them.  This would lower unemployment and raise the mythical beast that is “consumer confidence”.  The stumbling block seems to be the banks unwillingness to lend and the LibCon public sector massacre.  The behemoth Banks are running scared after the last consumer-debt fiasco; the system is “stuck”.  The issue of consumer confidence remains key; the more times we hear of recession and troubled times ahead the more we are likely to retreat into a corner and stop spending; a downward spiral of falling demand, rising unemployment and lower tax revenue.  The “cheap money” trick has not worked thus far; perhaps Lagardes words may have an effect.

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Comments
  1. jonny smith says:

    Top analysis bud!! Strain for Chnacellor.

  2. jonny smith says:

    chancellor even…

  3. strainsview says:

    I think I would prefer “chnacellor”

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