MESSENGER ELIJAH MUHAMMAD—–,”THE FALL OF AMERICA”,pg.87;”The strong-hold of the American government is falling to pieces. She has lost her prestige among the nations of the earth. One of the greatest powers of America was her dollar. The loss of such power will bring any nation to weakness, for this is the media of exchange between nations. The English pound and the American dollar have been the power and beckoning light of these two great powers. But when the world went off the gold and silver standard, the financial doom of England and America was sealed.
2 The pound has lost 50 percent of its value. America’s dollar has lost everything now as power backing for her currency, which was backed by gold for every $5 note and up. All of her currency was backed by silver, from a $1 note up.
3 But today, the currency of America is not backed by any sound value – silver or gold. The note today is something that the government declares they will give you the value in return, but does not name what the value is. But they definitely are not backing their currency with silver or gold.
4 This is the number – one fall,”NOW LET US LOOK AT WHAT IS TAKING PLACE NOW IN ENGLAND——————————–“U.K. Economy Unexpectedly Shrinks in Longest Slump (Update2)
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By Jennifer Ryan
Oct. 23 (Bloomberg) — U.K. gross domestic product unexpectedly dropped in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record. The pound tumbled.
GDP fell 0.4 percent from the previous three months, the Office for National Statistics said today in London. Economists predicted a 0.2 percent increase, according to the median of 33 forecasts in a Bloomberg News survey. None forecast a contraction. The economy has now shrunk over six quarters, the most since records began in 1955.
The figures add to Prime Minister Gordon Brown’s woes as he struggles to cement a recovery in time for a general election due by June, and suggest Bank of England officials may need to extend their bond-purchase program on Nov. 5. Chancellor of the Exchequer Alistair Darling said today he stands by his forecast that the economy will start growing this year.
“The fact that the economy is still contracting despite the huge amount of policy stimulus supports our view that the recovery will be a long, slow process,” said Vicky Redwood, U.K. economist at Capital Economics Ltd in London and a former central bank official. “An extension to QE at the upcoming November meeting now looks even more likely.”
The pound fell as much as 1.3 percent after the report and traded at $1.6415 as of 10:50 a.m. in London.
The data, the first for the third quarter from a Group of Seven nation, suggests Britain may turn out to be the last of them to exit the recession sparked by the worst financial crisis since the Great Depression.
Central banks in Canada and Italy both forecast slumps in their economies ended in the same period, and the U.S. probably also returned to growth then, according to the median forecast of economists in a Bloomberg News survey. France, Germany and Japan exited their recessions in the second quarter.
U.K. services industries, which account for 76 percent of the economy, shrank 0.2 percent on the quarter, the statistics office said. The drop was led by distribution, hotels and catering, followed by transport, storage and communication, and business services and finance.
Industrial production shrank 0.7 percent as manufacturing contracted 0.2 percent, the statistics office said. Construction slumped 1.1 percent.
Across the Board
“The surprise is across everything,” said Michael Saunders, an economist at Citigroup Inc. “It means the debate for QE is still very much alive.” At the same time, “these data will probably get revised upwards, they usually are.”
The Bank of England already plans to buy 175 billion pounds worth of government bonds and officials say they won’t decide on whether to purchase more until they have new forecasts in time for next month’s rate decision.
The economy’s output is “well below” the levels of a year earlier and there should be no illusion of a “smooth and painless” return to sustainable growth, Bank of England Governor Mervyn King said this week. Officials said at the Oct. 8 meeting that there is still a danger of further losses.
Credit losses and writedowns worldwide now total $1.6 trillion. Lloyds Banking Group Plc and the government are weeks away from an agreement on whether the lender can escape a program to insure up to 260 billion pounds of potentially toxic assets, a person familiar with the matter said yesterday.
Setback for Brown
Today’s report is a setback for Brown as his ruling Labour party struggles to erode the poll lead held by David Cameron’s Conservatives. The opposition party had a 17 percentage-point gap over Labour in an ICM Research poll for the Guardian newspaper published on Oct. 21.
“I have always been clear that growth will return at the end of the year, as my budget forecasts assumed,” Darling said in a statement released by the Treasury in London today.
The report contrasts with data from Europe today showing the region’s recovery is picking up.
A composite index of manufacturing and services industries rose to 53 from 51.1 in September, the highest since December 2007, Markit Economics said. German business sentiment improved to the highest since September 2008 this month, according to the Ifo institute, and French consumer spending rose in September for the first time in three months.
“The U.K. is certainly still in intensive care as the euro-area shows signs of recovery,” said Colin Ellis, an economist at Daiwa Securities SMBC Europe Ltd. who used to work at the central bank. “There has clearly been a divergence.”
Some U.K. companies are weathering the slump. British Sky Broadcasting Group Plc, the U.K.’s biggest pay-television provider, said today that first-quarter profit rose. “We have won more clients despite the tough economic environment and I’m confident that we will continue to grow,” Chief Financial Officer Andrew Griffith said in an interview on Bloomberg TV.
Today’s data show the recession shrank the U.K. economy by 5.9 percent, compared with a total 6 percent slump in the recession that ended in 1981, the statistics office said.
Unemployment may keep rising even after the end of the recession as a lagged effect of the slump. St. Ives Plc, the U.K. printer of the Economist and Vogue magazines, has shed about 12 percent of workforce, Finance Director Matt Armitage said on Oct. 19.
The National Institute for Economic and Social Research said this week that the Bank of England should pause its bond purchase program at the Nov. 5 decision, when officials will have revised forecasts on the economy. The British Chambers of Commerce has called for a further expansion of the plan to reach 200 billion pounds to secure the recovery.
“This is desperately disappointing news, especially given that it was hoped that a modest recovery had begun,” said John Philpott, chief economist at the Chartered Institute of Personnel and Development. “The U.K. economy is continuing to shrink, with six quarters of contraction in output making this recession look more like a depression.”
To contact the reporter on this story: Jennifer Ryan in London at Jryan13@bloomberg.net
Last Updated: October 23, 2009 05:59 EDT”———–“Pound Sinks on Weak U.K. GDP
.ArticleComments (1)more in Markets Main ».BY DEBORAH LEVINE
The pound dropped 1.6% against the dollar after an unexpected drop in gross domestic product in the United Kingdom, raising concerns about the possibility of further quantitative-easing measures.
Meanwhile, the dollar advanced for a fourth day versus the Japanese yen and gained on the British pound and other major currencies on Friday as U.S. equities declined, taking the wind out of sails for investors piling into riskier assets.
The dollar also rose for a third day versus the euro.
“The rally in risk assets looks like it is stalling and people are thinking it’s an overstretched market,” said Brian Dolan, …”U.K. Had Record September Deficit as Slump Hit Taxes (Update3)
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By Andrew Atkinson
Oct. 20 (Bloomberg) — Britain had the biggest budget deficit for any September since records began in 1993 as the recession ravaged tax revenue and drove up welfare costs.
The 14.8 billion-pound ($24.3 billion) shortfall compared with a deficit of 8.7 billion pounds a year earlier, the Office for National Statistics said in London today. The median of 17 forecasts in a Bloomberg News survey was 15.5 billion pounds.
With a general election due by June, Prime Minister Gordon Brown and opposition leader David Cameron are vying to show their determination to reduce borrowing without hitting frontline services. Whoever takes office, Britain faces tax increases and the deepest spending cuts since the country sought an International Monetary Fund bailout in 1976, analysts say.
“Today’s statistics only confirm what a sorry state the public finances are in,” said Hetal Mehta, senior economic adviser to Ernst & Young LLP’s Item Club. “There is no doubt that fiscal policy will be tightened after the election regardless of which party forms the next government. The measures announced so far provide a fraction of the extra income needed to close the government deficit.”
A cash method of accounting, known as the public sector net cash requirement, showed the deficit widened to 19.4 billion pounds in September, the largest shortfall for the month since records started in 1984, the statistics office said. Economists predicted a 19 billion-pound deficit. A 5.9 billion-pound interest payment was the biggest on record.
In April, the Treasury forecast net borrowing of 175 billion pounds in the year through March 2010, or 12.4 percent of gross domestic product. In the first six months, the shortfall was 77.3 billion pounds compared with 33.8 billion pounds a year earlier. That’s the largest half-year deficit since records began in 1946.
Government receipts dropped 6.3 percent in September from a year earlier. Taxes from corporate profits fell 27 percent, value-added tax declined 0.5 percent and income tax dropped 5.6 percent, the statistics office said.
Spending rose 5 percent, with net spending on social benefits increasing 9.7 percent as unemployment climbed. Net investment tripled to 3.5 billion pounds as the government brought forward projects to help the economy.
With the ruling Labour Party trailing the Conservatives in opinion polls, the dispute over how and when to tackle the deficit is set to dominate the next election.
Cameron says Britain risks losing the confidence of investors unless faster action is taken to bring down debt. Gambling that voters will reward their candor, the Conservatives this month promised to cut spending by 7 billion pounds a year by increasing the retirement age earlier than planned and freezing the wages of all except the lowest-paid state workers.
“These record borrowing figures underline the extent of Labour’s debt crisis,” Philip Hammond, who speaks on Treasury affairs for the Conservatives, said in a statement. “A responsible government would act immediately to start reducing public spending and bring Britain’s deficit down. Failure to act will risk interest rate rises, causing the recovery to falter and putting jobs at risk.”
Brown says taking action too quickly could tip the economy back into recession, arguing the burden of deficit-reduction should fall on the rich, partly through higher taxes.
The deficit figures were “broadly in line” with Treasury expectations, Chancellor of the Exchequer Alistair Darling told reporters after talks with European Union finance ministers in Luxembourg today. There are signs the economy is “moving towards recovery,” he said.
Brendan Barber, general secretary of the 7 million-member Trades Union Congress, said Conservative calls for “immediate deep spending cuts and public sector pay freezes would push the U.K. economy into a double-quick double-dip recession just when the rest of the world is recovering.”
Including the liabilities of banks now controlled by the government, such as Bradford & Bingley Plc and Northern Rock Plc, Britain had 824.8 billion pounds of debt in September, or 59 percent of GDP, the statistics office said. That’s the biggest debt burden since at least 1974.
Excluding financial-sector interventions, debt climbed to 682.8 billion pounds in the third quarter, or 48.9 percent of GDP, the report showed.
Standard & Poor’s said in May that Britain may lose its AAA credit rating after predicting debt may reach 100 percent of GDP by 2013, more than the 79 percent forecast by the Treasury.
The prospect of tax increases and spending cuts may weigh on the recovery, meaning the deficit may be even higher than the government predicts over the next four years, according to the Item Club, which uses the same forecasting model as the Treasury.
The fiscal tightening begins in January when a temporary cut in value-added tax expires, and from April Brown plans to tax incomes above 150,000 pounds at 50 percent instead of the current 40 percent. Social security taxes are scheduled to rise from April 2011.
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