2024

Obama signed into law the American Recovery and Reinvestment Act of 2009 at 20:24 local time. I'm going to predict that if we turn that into a year, 2024, that will be the year when our economy finally returns to a sense of normality. Perhaps I'm being far too cynical. But the UK government is embarking upon a course of action that, if it goes wrong, will unleash a ''tsunami of inflation,'' as described by Liam Halligan, chief economist at Prosperity Capital Management.

Gordon Brown is not walking down his chosen road for any economic reasons, it is political. He had coveted the job of Prime Minister two decades before actually getting there. RPI inflation is down to 0.1%, but that is because of interest rate cuts. CPI inflation stands at 3.0%, despite a 2.5% cut in VAT, although the 1% fall in the previous month may have benefitted most from the cut. The deficit may hit 10% of GDP in the coming years, a frightening situation. The government is issuing three times as many gilts than this time last year, but if the markets fear that the UK will default on it's debt, there may be a sterling crisis, which, as Frank Field says, is a remarkable achievment for a floating exchange rate. Interest rates on gilts are rising, which may push up long term interest rates, which will hinder our recovery, when it comes in 16 years. The devaluation of the pound should have helped exports, but there is no evidence to suggest this. The massive deficit spending championed by Gordon Brown will come back to bite us on the arse with rampant inflation. The Conservative Party used excrutiatingly high interest rates to squeeze inflation out of the system, and it cost them office for a generation. That hard work has been undone by Labour and their reckless profligacy.

Brown's position looks ever more precarious. Not even Lord Voldemort can save him now. He is 20 points behind in the latest Ipsos Mori poll. Apparently, Harriet Harlot Harman is positioning herself to take up the reins after Brown is wheeled off into the fading sunset. But people still believe that America is responsible for most of our problems. The Tories need to keep repeating that Brown's much trumpeted regulatory changes allowed the banks to developed massively over inflated balance sheets relative to their capital bases. His solution to a problem caused by big governments manipulating markets for their own nefarious ends is more big government to further manipulate markets for increasingly nefarious ends. We're screwed.