On Wednesday 6 June, this blog in “The Government Is To Grow Turkeys” mentioned the idea of “Growth Bonds” being a kind of latter day “War Bonds” of unhappy memory. It has taken nearly a fortnight, but today one of the Red Gobblers of the Left, Polly Toynbee has declared her support for the notion.
At the same time a division of opinion has arisen between our David Cameron, the
Rooney of politics
and President Francois Hollande, the Eric Cantona of the French. It is that Dave suggests that increased taxes
on the rich will have them fleeing to Wayne
for shelter, perhaps emulating the Huguenots’ of the past. London
Francois demurs as the French do and claims that true patriots amongst the rich will pay up, perhaps crying “Aux Armes, Citoyens” on their way to the tax office. Alas, for both of them, all the French rich that could move their wealth have long gone, perhaps crying “Marchons, marchons” as they did so.
A quick look at a map of
Europe might suggest
is an enclave of France, not
too far along the road from St, Tropez, Cannes
or Nice and you can meet a good class of Russian there these days, albeit some
of them have British hangers-on from
on their yachts from time to time. Westminster
To the north is
recently featured because of its lovely tax wheeze for corporations
in need of mega bonuses. To the east is
a larger place called UK Switzerland
and to the south a smaller one, . Andorra
These places are not stand alone entities. They are part of a complicated network of other locations offering substantial tax advantages. One key part of this is the City of
. So much of the off shore French money may
well be going through London
in any case as it flits from one computer to another. London
But Cameron is not thinking of this kind of investment. To nobody’s surprise he is talking about the
property market. As the London does not have a property tax as
such this is one advantage. UK
Others are the ability to evade Stamp Duty, the paying of Council Tax, in any case loaded in favour of high value properties or indeed the need for the registration in the
the real owner. Add to that the real
matter of which Probate Law and inheritance issues might apply the UK has great
In this context what Polly is proposing is fully in support of all this. Basically, Growth Bonds will enable the Government to extract loans at one rate of interest to allow Quantitative Easing to banks at a lower one, who will buy up many of the bonds, thereby instantly reducing their liabilities, with the taxpayer as security.
Along with this will the encouragement of lending for “Growth”. The major field for this will be housing and other sectors of the property market, which is where we came in. The chattering classes as a whole are heavily committed to property.
If Polly were to reveal her holdings of wealth we could then judge if she is one of them. There is no more chance of that than finding out where David’s money is. As for Francois it is claimed that he owns some flats on the
but that story was quickly buried. Cote d’Azur
There is one major snag to all this. Polly has said that
Europe is awash with wealth that can
be used as the backing for such bonds.
But that “wealth” is denominated in money terms.
Indeed, much of it is invented, or fiat money and beyond that a host of financial instruments based on that illusionary money constitutes a huge theoretical “wealth”. that is supported by only a small proportion of identifiable holdings.
Everything else, property, savings, investments, goods, services and everything relates to its money value. If the money values collapse, one way or another, then the “invented” wealth simply evaporates and what might be real wealth is sharply reduced both in money and real value.
This might be about to happen. In the meantime at the G20 meeting in
one of the most corrupt and criminal states on the planet, Europe is blaming for the
problems. As America America
is already blaming Europe it is
understandable. That not only both are
to blame but a lot of others as well they are all wasting their breath.
“The charter of thy worth gives thee releasing;
My bonds in thee are all determinate.
For how do I hold thee but by thy granting?”
Shakespeare had property in
Stratford upon Avon,
some of it burned down later following a major fire that swept through the