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Wednesday, July 25, 2012

UK in depression

Even by the official statistics, the UK is in a recession again:
UK economy contracts by a shock 0.7pc. The figures from the Office for National Statistics are much worse than forecasts for a 0.2pc contraction. It marks the third successive quarter of contraction, leaving Britain in its longest double-dip recession in more than 50 years. The economy shrank by 0.3pc in the first quarter of the year, following a 0.4pc contraction in the final quarter of 2011.
Have a look at the large chart. UK GDP hasn't been above 0.5% "growth" since the third quarter of 2007, and if one takes into account the margin of error in the various statistical revisions as well as the increasing G portion of GDP, it should be readily apparent that there has been no actual economic growth since then even if we follow the Keynesian lead in ignoring debt.

However, this isn't a "double-dip recession" as is presently being reported, it is an ongoing economic depression that began in 2007 at the latest, and quite possibly as far back as 2001.

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27 Comments:

Anonymous Josh July 25, 2012 9:16 AM  

You'd think after importing so many vibrant immigrants in the last several decades there would be more animal spirits to boost aggregate demand...

Anonymous JartStar July 25, 2012 9:35 AM  

US GDP is looking to be 0%.

Anonymous scoobius dubious July 25, 2012 9:37 AM  

Growth is up! We need more vibrant immigrants! Growth is down! The solution is more vibrant immigrant! Growth is stagnant! The only cure is... immigrants immigrants immigrants immigrants immigrants!

Well, I guess there's still plenty of good gnawing to be had on a corpse that large.

The good news is, most of the 0.5% growth comes from new mosque construction...

Anonymous Roundtine July 25, 2012 9:40 AM  

The trend line is obvious.

Anonymous Daniel July 25, 2012 9:51 AM  

A re-recession is much easier to set to music.

Anonymous VryeDenker July 25, 2012 10:13 AM  

"The good news is, most of the 0.5% growth comes from new mosque construction..."

Been reading 2083, have we?

Anonymous 11B July 25, 2012 10:14 AM  

Congrats to the first two commenters who were quick on the draw in regards to immigration.

I am sure the current UK leadership will somehow come to the conclusion that immigration might be related to this problem. Although I wouldn't hold my breath for them to determine that it, and not lack of it, is the problem.

Blogger IM2L844 July 25, 2012 10:14 AM  

How long before the collective groupthink mantra becomes full blown political/financial centralization is the only last ditch effort left to try before scrapping the whole EU experiment?

Anonymous Vidad July 25, 2012 10:22 AM  

@IM2L844

I think the trend towards centralization may have one last gasp in it; but, at this point, my guess is that the nations are going to split apart faster than they converge.

Anonymous VD July 25, 2012 10:25 AM  

How long before the collective groupthink mantra becomes full blown political/financial centralization is the only last ditch effort left to try before scrapping the whole EU experiment?

We're already there, as predicted in RGD. They always respond to the failure of their programs by going up to the level of centralization.

Anonymous harry12 July 25, 2012 10:26 AM  

I read that Sandy Weill ( former Chair of Citigroup ) is calling for financial system reform! Maybe the end IS near...

"Gloom, dispair and agony on me..."

Anonymous Lysander Spooner July 25, 2012 10:29 AM  

The Limp-Icks will save the world, the UK and Barry.

Anonymous FrankBrady July 25, 2012 10:31 AM  

The Limp-Icks will save the world, the UK and Barry.

--------------------------------------------------------------
No, they're counting on World War III for that little chore...

Blogger John Regan July 25, 2012 10:36 AM  

It's demographic as well as monetary and economic. Thought this might play well over here, where I've seen this idea bandied about before:

http://strikelawyer.wordpress.com/2012/07/25/fiscal-cliff/

Blogger IM2L844 July 25, 2012 10:53 AM  

Interesting Kudlow report:

4 sec: "Do we all work for Central Bankers? Is this Global Governance at last? Is it One World.. with the Central Bankers in charge?"

1 min: "To answer your question: We are absolutely slave to Central Banks"

1 min 16sec: "Markets are driven by policy now, they're not driven by market forces"

1 min 26 sec: "Fiat currency thats continually watered down.. so the markets go up and we feel good about it"

2min 25 sec: "We are basically beholden to Central Bankers"

2min 30sec: "..admits (Federal Reserve) are debasing currency and borrowing our way to false prosperity"

2min 48sec: "Every Central Bank in the world has to devalue their currency"

3min 28sec: "Free markets will fight back and ultimately they'll win"

Video HERE.

Blogger Scott July 25, 2012 10:53 AM  

There's an easy way to solve this. More taxes and government spending. Government spending solves everything and they'll need the taxes to pay for it.

Anonymous Lysander Spooner July 25, 2012 11:00 AM  

@ FrankBrady

The Limp-Icks will save the world, the UK and Barry.

--------------------------------------------------------------
No, they're counting on World War III for that little chore...


But, but a little Birdnanke told me soooooooo......

Anonymous James Dixon July 25, 2012 11:37 AM  

> However, this isn't a "double-dip recession" as is presently being reported, it is an ongoing economic depression that began in 2007 at the latest, and quite possibly as far back as 2001.

I don't guess I should be surprised that no one here feels the need to point out that this is equally true of the US. :)

Anonymous James Dixon July 25, 2012 12:21 PM  

Should --> shouldn't

Blogger W.LindsayWheeler July 25, 2012 12:41 PM  

That ONLY MEANS Britain NEEDS MOOOORRRE IMMIGRATION!.

Blogger Tim July 25, 2012 12:49 PM  

I've been wondering why people are worrying about a double dip. When did we end the first recession?

Anonymous Vidad July 25, 2012 1:02 PM  

@Tim

What - weren't your chocolate rations raised?

Blogger Aviator4 July 25, 2012 1:18 PM  

This explains why Arsenal seemingly are unable to resign RVP I reckon.

Anonymous FUBAR Nation (Ben) July 25, 2012 1:44 PM  

We need to raise the animal spirits. I won't be surprised if at the end of the day, when everything goes to hell, you see the Keynesians doing pagan rain dance rituals.

Cthulu help us!!! Raise aggregate demand!!!

Anonymous Stilicho July 25, 2012 2:02 PM  

Animals Spirits: demand it!

OT: Given how I often disagree with Denninger, it is only fair to admit that he's on a roll today with his posts about the Catholic Church funding Obama's Alinskyite training back in 1986, Munchkin Bloomberg's call for cops to strike in support of gun control, and, to a lesser extent, the one dealing with Sandy Weill's call for splitting the IB's from the depository banks (that's progress, but it ISN'T a one dollar of capital system which Denninger promotes).

Anonymous Noah B. July 25, 2012 3:16 PM  

@IM2L844

That Kudlow report sounds about right.

Blogger IM2L844 July 25, 2012 4:04 PM  

That Kudlow report sounds about right.

Except for the free markets will ultimately win part. The so called free markets may temporarily overwhelm the system, but that will just serve as a good excuse to usher in some kind of new and improved system...for the greater good, of course.

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