Never Never Land - an Interim Tale of Fantasy

Back in the 50's when credit came crashing onto these shores from across the pond, the Brits thought - I like this idea.

As the ads used to say "take the waiting out of wanting" and ever since the Brits have given the concept of buying on the 'never never' a really good run, buying cars, washers, houses, second homes, holidays, clothes, food, water, loo rolls - on the never never.

But now it's come to an end, never never land has arrrived, the credit has stopped rolling and a great depression is forming.

Of course the politicians and central bankers will try to make this mess a 'great mess' and I see they are trying by creating more credit - why not- it's worked before. Add more punch to the punch bowl when the party starts to go flat....it must make sense.

But it won't get the party going this time.

Yet - what's this, there are those amongst us who think it's all over, but as St. Paul writes, ‘He that deceiveth himself is not wise.

Let's be honest, the great credit expansion of the last 50 years is over and credit contraction will be the beat from now on.

Of course it suited Gordon, our hero, to allow huge credit expansion for the last 10 years, since it covered the inconvenient truth that real wages in the UK (and the West) were falling, as the East developed. So if people could borrow to make up the difference or bid up house prices, everyone would feel richer.

Now the money illusion has been exposed and folk know they're getting poorer.

After all if you're an average Joe you live in an house worth £150,000 and earn £25,000 (or £17,500 after stoppages). But your house is falling in value by c.15% or more per annum - so you're losing c. £22,000 a year in capital but only bringing in £17,500 ie you're £4,500 worse off after a year of working!!

Never Never Land has arrived.