Save, save, save!

Times Online - Germany has lambasted Gordon Brown’s response to the economic crisis as “crass” and “depressing” in an astonishing attack as EU leaders prepare to debate how to recover from the recession in Brussels today. Peer Steinbruck, the social democrat German finance minister, warned that it would take Britain a generation to pay for the huge financial stimulus introduced by the government in its attempt to kick-start the economy. ......Sterling today continued to fall against the euro amid continuing concerns about the strength of the British economy.

......“Our British friends are now cutting their value-added tax. We have no idea how much of that stores will pass on to customers. Are you really going to buy a DVD player because it now costs £39.10 instead of £39.90? “All this will do is raise Britain's debt to a level that will take a whole generation to work off. The same people who would never touch deficit spending are now tossing around billions. “The switch from decades of supply-side politics all the way to a crass Keynesianism is breathtaking. When I ask about the origins of the crisis, economists I respect tell me it is the credit-financed growth of recent years and decades. Isn't this the same mistake everyone is suddenly making again, under all the public pressure?”

......Mr Steinbruck added: “We have a bidding war where everyone in politics believes they have to top up every spending program that has been put to discussion. I say we should be honest to our citizens. Policies can take some of the sharpness out of it, but no matter how much any government does, the recession we are in now is unavoidable. "When I look at the chaotic and volatile debate right now, both in Germany and around the world, my impression and concern is that the daily barrage of proposals and political statements is making markets and consumers even more nervous.” ......Mr Steinbruck appealed for calm, warnging that there was no silver bullet for the downturn: "It is the yearning for the Great Rescue Plan. It doesn't exist. It doesn't exist!

IHT - Chinese exports registered their largest drop in nearly a decade last month, suggesting that the global recession could be far worse than many economists had previously predicted. According to statistics released by the Chinese government Wednesday, exports fell 2.2 percent from November 2007 to November 2008 — the largest year-over-year monthly decline since April 1999. Even at a time of increasingly dour economic news, the Chinese trade numbers stunned many economists.

......Most worrisome, China's economic dynamism of the last 20 years has been powered by the twin engines of exports and foreign investment. But in other sobering news, the government said that direct foreign investment fell 36.5 percent from a year earlier in November. In recent months, evaporating export demand had already forced thousands of factories to close in the Pearl River Delta of Southern China. Tens of thousands of jobs have disappeared, leading to protests by unemployed workers demanding back pay.

......Analysts say the sharp export slowdown could make it more difficult for Beijing to stimulate the economy, and could lead to the closure of more factories in coastal areas. China's slowing exports will also be another sharp blow to global growth. Together the trade figures strongly suggest that China will not be a savior to the global economy, taking up the slack from the slumping United States, Europe and Japan, as some had hoped. Indeed, when combined with further signs of a slowing economy in Japan, the picture of Asia, once the fastest-growing continent, becomes one of spreading economic gloom.

SMH - AS KEVIN RUDD urged pensioners and families to "go out and spend" the Christmas bonus being paid into their bank accounts, it has emerged the recession-busting package will cost taxpayers $28 million in advertising and administration costs. From today, low and middle income families eligible for the family tax benefit will receive a one-off payment of $1000 a child, single age pensioners will gain $1400 and pensioner couples will get $2100. Those receiving the carers allowance will be given $1000 for each person being cared for.

MK - That's our PM telling people to spend, spend, spend. He's not just telling these folks, he's encouraging everyone to do it as well. Is it just me? We are already up to our eye-balls in credit card debt, around 39 billion back in 2007, and we're telling people to spend even more. It's like telling a crack-addict, we want to help you, here's some money, go out and buy some more crack!

I'm no fancy economist, so maybe I'm the fool here, but to me, now is not the time to spend drunkenly, read the above news stories again, Europe is in the crapper, China is in the crapper. China is one of Australia's biggest customers, when they can't sell the stuff they're making, they'll start running out of money to pay for all the iron, steel and everything else they're gobbling up from Australia. Then we are screwed.

Figure it out people, the payments above are 'one-off', it ain't coming every 6 months, kevvie from brissie isn't writing personal cheques and dipping into his wife's bank account, that's the surplus he's burning through. Soon it'll be all gone and then what will you do? Once you've spent the money, it's gone. Kevin Rudd tells us that we need to do it for the economy, well what's he going to do if you spend all the money on DVDs and games and the economy tanks anyway?

Governments like to appear like they're doing lots of stuff, stimulating this and massaging that, and all this costs money, money that they took from you. They'll give you long speeches, fancy pie-graphs and all that but you'll never hear them guarantee you that it'll all be over by 20XX. If they fail in their stimulating and massaging, you'll be left with nothing, they'll hang you out to dry before you can say, 'the government must do something!'.

Let them massage, stimulate and all that, I say take what money you have and save it, put it aside, get extra work if you can, keep the bacon rolling in. The beach and the barbecue will still be there after the storm has passed. That rainy day is coming folks and from what I can see, it'll be a monsoon.

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