IMF says World faces crisis and Brexit will make no difference. Everyone else goes lalalalalalalalah

In honour of the arrival in Shanghai of Gobbledegook20 overnight, the People’s Bank of China turned another index rout into ‘profit’. Which is fine, except that Beijing is burning its reserves at an alarming rate, and the signs that it can move quickly back into growth “once the storm has passed” are getting weaker. Here’s one chart I can guarantee won’t be getting top billing at any of the G20 sessions:


















The nominal dollar measure shows that when one replaces a falsely undervalued Yuan to assess value growth with a floating dollar unadjusted for inflation, the 2.5 year contraction in China is far steeper than anyone suggests…and it is rapidly heading for zero. It sort of blows the ‘China carefully adjusting to a more services based economy’ myth apart – a hypothesis which I remain unable to believe, as nobody seems able to tell me what these services are, and who’s going to buy them.

The same is true of Japan’s debt – the biggest on the planet cf gdp – and why anyone would pay the BoJ for the privilege of lending to a bankrupt with no job.

And now, I’m afraid, some of this EU member gdp and jobs data is beginning to stretch credulity. Here in France, the ‘news’ is that more people found jobs in January, and the economy ‘is expanding’. This is flatly denied by everything one sees, and everyone in manufacturing, retailing and construction with whom I converse.


Every last concern I know is way below target…and the falling shop prices I see every day are reflected in the latest deflation figures. So the economy’s about to take off, but, um, deflation is getting worse.

Last Autumn, Wolfie Schäuble was mouthing mendacities about Spain turning the corner: their deflation numbers this morning are twice what was anticipated, so one can only assume that round the corner there was a whopping, open manhole.

Some of you, in turn, may have spotted a Twitter swarm of Italian optimists in recent days. I’ve counted five so far….I don’t follow any of them, and yet there they are, every day, gibbering on about how the Greeks and the Brits have f***ed everything when it was all going so well before they messed up. ‘Italy’ tweeted one of these monkeys yesterday, ‘is on a sustainable road to prosperity’ – a verdict sillier yet than finding Rebekah Brooks innocent of phone hacking.

G20 or not, the EU is involved in a tooth-and-claw fight for survival, and in that situation nothing is sacred: Juncker admits that when solids hit fans “lying is the only option”. Every bad economic sign encourages rebellion, and with Brexit rebellion high on the agenda, no punches are being pulled in a bid to pretend that the UK is better off in, and doomed if it leaves.

Abe Lincoln was right in 1852, but he’d be wrong today: if you put together time-starved acceptors and a non-stop media torrent, you can very easily fool (and scare) all the people all the time. Since the Referendum date was announced last weekend, media terrorism has been at maximum volume.

“The bigger the lie, the more effective it will be,” Hermann Goering once infamously remarked, and there is no lie bigger than assertive propaganda thriving on fear to create more fear. But it’s everywhere apparent on the Brexit issue – in Establishment media, in banking firm notes to clients, and in the pro-EU Guardian and BBC. On Bloomberg yesterday, three City talking heads in London were plied with donkey-drop questions from Boombust HQ in New York, and their replies were beyond blinkered: it was ‘obvious’ to all three that the fall in Sterling reflected (quote) “the overwhelming reality that Britain simply would not survive outside the EU”. It was also obvious to me that they didn’t want to talk about who laid the eggs creating all the Stayers turning chicken; the thought that both Government and media were working 24/7 to create a self-fulfilling prophecy never got on the agenda. It really was creepy to watch….but then, no creepier than the Brussels-am-Berlin PR lies positioning all the blame for the Greek marathon on the shoulders of ordinary citizens there.

So the message for the time being is to show we boneheaded Brits how well Europe is doing. Four years ago, it was to show Greece recovering: of the 23 Greek economic forecasts put out by the IMF since that time, every last one has been proved ludicrously optimistic. This time, however, their outlook going into the G20 is just a tad off message:


The usual level of finger-in-the-air optimism is there…the data on Spain, for example, already looks wobbly – even if one accepts the 2015 number, which was without question heavily massaged to make Wolfie’s case. But otherwise, all the EU major players are predicted to do worse than the UK. Even then, if you take the gdps of those major players and still get to 2% growth for the EU as a whole, then the growth required in ClubMed and the other peripherals to get there represents sheer fantasy.

In short (and the IMF has factored this in) Fifi Lagarde’s view is that the ‘post-Brexit doom for the UK’ scenario is tosh. Interesting, that….and probably inadvertant. To be fair, the IMF is trying to instill a sense of urgency into the G20 (Lagarde is, rightly for once, more bearish than most about the global outlook) but the last thing the Chinese, Eunatics or Yanks want is any panic that might make the markets get more jitters.

“Talking about further stimulus just distracts from the real tasks at hand,” Germany’s Minister of Finance Wolfgang Schäuble said this morning, rebuffing a recommendation from Fifi that the G20 should start planning now for a coordinated stimulus program. Arriving as he does fresh from the outstanding success of his ClubMed austerity Blitzkrieg, you can rest assured that Wilfie’s views will get a warm reception. The Chinese, for example, are still saying it’s all about services balance, and US Treasury Secretary Jack Lew reitered his belief that  China has “the tools to accomplish its economic transition”. He just didn’t say what they were, or why the transition was either necessary or desirable.

The EU leaders themselves are emitting a sense of Swan-like calm, urged on (I’m told) by Osborne to keep stressing how great things are in the basket case, and how great the dangers of Brexit. Using the sort of condescension only French politicians can achieve, Michel Sapin said it was best for the UK to remain in the European Union, but he expected the British people would make the “right decision” on June 23.



  1. One wonders on the scenario where we do stay in and it does go seriously tits up and we are dragged into the mire with everybody else, who then will take the blame? Oh, silly me, it’ll be someone else’s fault right?

    On another note, I saw this: ‘A Freedom of Information request asking the Government for more detail of the N.I numbers has been rejected on the grounds that “it might prejudice the outcome of the EU referendum.”

    How very dare they…There will come a tipping point, and heaven help us when it does.

    Liked by 1 person

  2. @kfc
    The DT are covering this. The figures gleaned so far appear to demonstrate high level concern that more details might indeed “prejudice the outcome of the EU referendum.”

    “Official figures published suggested that 257,000 migrants came to Britain last year, with a significant rise in the number of Bulgarians and Romanians.
    However over the same period 630,000 EU citizens registered for a national insurance number, which would entitle them to work or claim benefits in Britain.
    Experts said that the “massive” disparity cannot be explained by the difference in the way the figures are recorded and voters “deserve to have the facts and data” ahead of the EU referendum.”

    We seem to be paying for the EU twice: £55 million per day and then a significant sum for all the extra benefit claimants from the EU now living in Britain. As a start perhaps the later sum should be deducted from the former….

    Liked by 1 person

  3. As far as the Inadequate Money Fondlers are concerned, I am still reeling from their revelation this week that water is wet, that it sometimes falls from the sky, and that under these circumstances it is possible for it to land on the ground.


  4. Jack Lew, the US Treasury Secretary, aka ‘The Invisible Man’.

    I got home late last night after a band rehearsal (yes, I might be grey haired but I’m still playing!), put on the TV to see what was on and managed probably less than two minutes of ‘Question Time’, some ignoramus trotting out utter garbage on the ‘Brexit’, ‘Bremain’ (that term really winds me up) and Dimbelby responding in what seemed like a partisan manner. I’m watching MUCH less mainstream TV these days (mainly for films and documentaries) and encountering crap like that last night confirms my decision.



  5. Fantasy land in the western world is most evident in stocks that are not allowed to go down no matter how bad things get..


  6. @DavidC

    The (Dimbleby) problem being that, for all too many of us, seeming is believing..

    After 30 odd years, I recently resigned from the MU, having had no income from that direction for a while. Also grey haired, but not playing much any more after various mainly big band gigs in the 80’s and 90’s as a swing rhythm guitarist. All good practice for joining up the dots.. Quite agree with your take on TV, don’t watch any at all.


  7. ‘The EU is involved in a tooth and claw fight for survival’.Indeed. Its own migration commissioner, Dimitris Avranopoulos, seems to agree with the PMs of Hungary and Norway that the migration problem is out of control. With immigration the number one issue in the Brexit debate, this does not play well for CMD.As for Project Fear and Gideon, a crumbling oil price, making every voter better off, might just make the puerile RISK argument look as irrelevant as it is.


  8. Well, that’s the end of the sunny weather. Oppressive skies and rain and cold are all back in situ.

    Who exactly has caused the mass fleeing across Europe – wouldn’t be America would it? They seem to have a lot of fun messing things up for others all the time. I understand, but may be wrong, that of the last 100 years the Americans have been at war for 98 of them. They don’t seem to do peace very well do they? Allied to our wonderful friends the banks and the amazingly democratic governments of Europe, yes, including good-ole Blighty, we have a right recipe for disaster. Watching QT is not the answer. it offers no soothing balm. FIFA, IAF and even the ECB offer no comfort either. I have watched, but don’t know if it’s on currently, a comedy show called New Girl – it’s mad and zany and it’s poignant and has CeCe in it – this helps a little.


  9. Hmmmm… so JW what odds to you give for a rate hike on March by the Fed Reserve, given the latest employment numbers and upward revisions to GDP, personal consumption & downward revision to the savings rate. Logic says that these factors clearly indicate a rate rise, but I concede that application of logic in these markets is a guaranteed way to lose money.


  10. “UK is better off in and doomed if it leaves ” . So is the EU because ” in ” begets other members wanting special conditions as per UK or “leave” other members thinking they too might leave and it all burns like Rome anyway.


  11. The level of lying is getting out of hand… Almost worth starting a war over.

    Cameron spouting on about losing 100K jobs in Wales if we leave the EU. Well we can cut the number of migrants into the country down by 100K then can’t we? NO HE CAN’T AND THAT IS ALREADY PROVED. If Airbus moves all of its production into europe with the part we have left here we just complete the rest of the job here and we can stamp made wholly in Britiain of the airbus lookalike. Simple, no jobs lost, and work on undercutting the EU contingent.

    Leader of the Green Party also … wow smack in the teeth for all green party members then. The all for open borders and to stay in the EU. In an open border scenario people with nothing will move to somewhere! anywhere! to build a life to the detriment of the existing politician. The UK with one of if not the highest population density per square mile does not have the resources for the current population let alone Cameron’s 300K year on year levels.

    Truth, if the population density of a country is so high then the burden of responsibility should fall on less populated countries.

    One truth they will not mention, they have linked the inflationary system to the population level, a substantial part of the so called current growth comes from AS ADMITTED BY THE ONS. So knock out the 300K migrants and see the growth level === 0% maybe less.


  12. @ 4anewway2go
    Always good to know that someone other than myself says what needs saying, and is not afraid to get their rag out.
    Bring it on fellas..!! Boris for PM.


  13. I despair at the morality of those in positions of authority and power these days. They used to at least pretend to have a modicum of authenticity about themselves and what they were doing. Now they barefaced lie and have no shame (and continue to lie) when they are clearly exposed as liars. Makes me want seriously painful and terminal events to greet them heartily and soon. Which is actually quite out of character for me and shows just how far down the road they have pushed things.


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