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178 comments on The Fantasy World of the UK Government
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178 comments on The Fantasy World of the UK Government
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Euan,
You recently wrote about the UK "State of Emergency", where North Sea depletion is resulting in larger and larger trade deficits which will continue to balloon going forward.
I think I have the answer!
According to BP Statistical review, the UK used 620 million barrels of oil in 2007. Lets assume this stays constant (e.g. economic growth is subsidized by increases in efficiency or energy substitution.) That means over the next 8 years, the UK will consume around 5 billion barrels of oil.
Using the BERR expections for "high case" of oil prices (meaning the risk is to the low side of these numbers), wouldn't it make sense for the energy experts at BERR and UK Finance Ministry get together and arbitrage their expertise vis a vis the futures markets?
To wit, the ENTIRE futures strip from now out to 2016 is above $140. (many of the contracts are above $146). By selling forward what are obviously significantly overpriced contracts compared to the 'high case', the UK Finance Ministry can pocket $275 billion in next 8 years ($142.5-$87.5 high price average times 5 billion barrels).
Much of the above budget deficit then disappears. If they also sell forward natural gas and coal vs their 'high case' as well, then the deficit would turn to a surplus!
Problem solved.
And we americans thought we had the monopoly on imbecility and cluelessness. What is the UK thinking?!! And what kind of deficits will they be running in the future if they persist in thinking they are a world power? Maybe an Irish Sea power.. And 2 new huge aircraft carriers...Jeez...http://www.timesonline.co.uk/tol/news/uk/article4262046.ece
Personally, I doubt whether these aircraft carriers will ever be completed. The French have had enormous problems with theirs and I believe they are heavily involved in this lot.
The "best" thing about them is that they so drain the "defence" budget that there is little left over to start new "fronts against terrorism".
These expensive toys are highly vulnerable to shore-based missiles and so cannot be used properly in restricted waters like the Persian Gulf. They are about as useful as the battleships the Prince of Wales and the Repulse were in 1941
Alfred,
You are right about aircraft carriers being obsolete dinosaurs with HUGE radar signatures. The War Nerd explains this in his usual amusing, snarky style (vulgar language warning):
http://www.exile.ru/articles/detail.php?ARTICLE_ID=6779&IBLOCK_ID=35
Errol in Miami
edited to fix link
Where do you think we Americans got our imbecility and cluelessness? The acorn doesn't fall far from the oak, as they say.
Frankly speaking, I'm not sure whether my brain is wired to grasp the real meaning and consequences following charts like this. But one thing comes to mind : Zimbabwe, but take it easy I don't understand that either.
How and where do they start... to make policy with such a chart on top of your political desktop ?
Ntae, I think this comment explains why you were / are a hedge fund manager and I am / was a geologist. To be fair to Gordon Brown he did sell most of the UK's gold at $10 per ounce just when no one else was expecting that, wrong footing the markets completely.
And back in 1999, when the UK was pumping more oil than it had ever done before we managed to sell some of it at below $10 / bbl proving how liberalised and informed markets can promote and support industrial civilistaion.
You just need to compare this with how the ex KGB Putin scum bag is managing Russian resources. It seems he wants to sell most of what is left of Russia's oil at over $300 / barrel. Talk about clueless commies, eh?
But I gotta say your running a bit close to the mark suggesting that the UK government may be speculating on the futures markets. There's a strange irony about Followers speculating on the future of a country that doesn't have one.
OOOOyn
€,
Sarcanol alert on.
Your comment proves that former British governments cannot be accused of being greedy!
Must those bloody capitalistic commies be damned!
They may be thinking about ……..“Back to the Future”.
Sarcanol alert off.
This illustrates some of the new rules, earlier discussed on this forum, coming into play.
What a brilliant idea!
That would be putting our money where their mouth is :(