This is the last part of this Blog Series and you can read the earlier bits at these Links:
The Counterpart to High State Spending - High Borrowing
Invariably whenever a Socialist Government embarks on a high level of State Spending, it has to fund that Spending and it is usually too difficult within the Political constraints of Western Economies to tax People and Businesses within the Economy at a level that would cover all the Spending (and to be fair that would make little sense anyway because a CONTROLLED amount of State Borrowing can be worth doing and affordable provided that the Economy is growing at a sufficient rate), and as a result the Government has to borrow money by issuing Bonds.
So how do various Governments shape-up on their Levels of Spending?
As with all the Pictures here I have created them using Microsoft Paint and I find it unbelievably difficult to use and I suspect much of this is because in a former life I did all such Image creation using Microsoft Powerpoint which I found superb and very intuitive. Paint could most definitely never be called ‘intuitive’ !!
If you click on the picture it should grow bigger to help you see the detail.
I am quite pushed for time this Weekend as I took the day off yesterday and tried to take my elderly Mum to Buscot Park near Lechlade (on The Thames, near Swindon) with my Brother but despite checking with the Internet during the week, the blessed place was closed and by sheer luck whilst in an extremely bad mood at the prospect of having to go to Lechlade itself (which can be a bit ‘tacky’ and immensely busy when the Sun is out) I noticed a sign by ‘The Trout’ PUB which mentioned something called ‘Kilmcott Manor’ and it turned out to be a divinely peaceful little place which was the Summer Retreat of William Morris - which of course got me thinking of Walker Greenbank WGB although with my quick whizz around the ground floor of the House there was little evidence of Wallpaper. Maybe he didn’t want to be reminded of work when he was at home !!
First off some housekeeping type stuff - firstly can I point Readers in the general direction of the Homepage where I have put pretty much all the details I know so far about ‘Wheelie’s Summer Bash’ on Saturday 23rd September 2017 and everyone is invited.
A Free Unicorn with every Vote for the President - A look at Indexes, Oil, Gold and the Quid, and some Stocks
The thought that we still have about 3 Weeks to go on this General Election run-in is beyond depressing. We all know what the result will be and thankfully the Markets should take this in their stride and any negative forces on Stocks are likely to come from completely different factors if they do occur.
The Campaigns are just so dire - T May seems to have totally absorbed her Conference Speech from many years back where she talked about “The Nasty Party” and consequently you wouldn’t even know she was the Leader of the Tories if you just had a quick look at the Campaign Marketing fodder. It is very much a Campaign to elect T May as the President.
If you have not read Part 1 of this Blog Series yet then it probably would be best to start there. You should find it at this link here:
Another one in the programme was similar to something in the Kahneman book. Some researcher somewhere analysed the outcomes of Parole Board Hearings in the US over a long time series while controlling for certain factors such as Race, Gender, Age, etc. The finding was that Prisoners who went up to the Parole Board before Lunch were far more likely to fail in their request than those applying just after Lunch. The explanation for this seems to be that when the Parole Judge is hungry and tired they tend to be less generous than after Lunch when they have been fed and watered.
PLEASE NOTE - THE TEXT WHICH FOLLOWS WAS ORIGINALLY PUBLISHED AS PART OF A WEEKEND ‘CHARTS’ BLOG. ANYWAY, I THINK THE MESSAGE HERE IS EXTREMELY IMPORTANT AND I DECIDED TO PULL IT OUT AND CREATE A SEPARATE BLOG AS WELL. THE IMPLICATION OF THIS IS THAT I THINK WE COULD VERY LIKELY SEE A BIG RISE IN STOCKS AND I AM POSITIONING MY PORTFOLIO THIS WAY.
You may have picked up from comments I have made on the Website, but more particularly on Twitter, that I am feeling extremely Bullish about Markets at the moment and I am more than Fully Invested with a Long Spreadbet on the S&P500 and I might even add to that position.
There are 2 main reasons for this - firstly the recent Breakout to New All Time Highs on the US Major Indexes (and also on the FTSE100) is Technically a very Bullish event. In the early part of the Week just gone we had a bit of a Pullback but this already seems to have sucked in a new load of Bulls and it looks to me like Markets are turning up again - Friday was especially strong after a big Jobs Number in the US (I will move on to some Charts later where I will show these moves). Secondly, despite the confusion this Price Bullishness has caused among Investors, the Fundamentals look highly supportive of this move - and a Programme I heard on BBC Radio 4 on Thursday demonstrates this very well.
The markets globally have started to feel instability.
Markets over recent weeks have been stable as there has been no action by central banks in Europe and US. Article 50 for the negotiations to start on Britain leaving the EU has been parked to March 2017.
UK Stocks in the majority reporting strong earnings and FTSE pushing up from 6300 to 6900+ area.
The markets this summer are contrary to previous summers where they needed constant intervention by central banks. Now they are a happier place if left alone. Amazing how things can move full circle.
Readers who are misfortunate enough to follow me on the Tweet Generator, will have probably seen my concerns over the General Election due in early May and how I am pretty much downing tools at the moment and not buying anything. I see this as the most uncertain Election in my Lifetime (yes, that long !!) and Stockmarkets tend to detest uncertainty.
I suppose a Golden Rule of blogging is to avoid Politics - I am sure I will regret writing this as any bias I have will no doubt creep out and upset 50% of my Readers - I will try to be objective !!
As they say, “never work with Animals or Children” - I am not sure what this has to do with anything, but it is probably superb Blogging advice.
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