UK economy grew in Q2. Really??

According to its government, the UK economy grew 0.3% in Q2. Correction: this growth is entirely due to government spending. The private sector is in a developing slump.

The UK’s economy is in a mess. Anyone living here, particularly outside London and its environs sees shops, pubs, and businesses being closed, job offers declining, growing numbers on welfare, and hotels filling up with immigrants. Inside London, the strong hand of mayoral communism is destroying the conurbation. Lawlessness rages, with shops being pillaged by shoplifting gangs, and tourists being robbed of their watches and mobiles. Meanwhile, the police ignore criminal theft and are arresting ordinary protestors who disparage the loss of free speech.

However, the good news is that the economy is growing faster than all the other G7 nations in the first half of the year, according to Bloomberg.

You can’t fool all of the people all of the time. According to Bloomberg, “economists pointed out that much of the growth has been driven by higher public spending under Labour”. At last, it is being admitted that Keynesian stimulus has a downside.

In fact, increasing public spending is masking an outright slump in private sector activity. Clearly, the budget deficit is far worse than the consensus believes if it covers up a slump in the 80% of the economy which is comprised of small and medium sized businesses. All will become more obvious when Rachael from accounts produces her autumn statement.

Additionally, revenue assumptions in her fist budget are victims of the Laffer curve. The top 1% of earners pay 30% of all income tax: they are gone or going. Capital gains tax revenue is collapsing, despite asset inflation because why sell an asset and face a tax bill imposed by a regime which is openly hostile to you?

The residential housing market has ground to a halt for the same reason. No one is selling, leaving a huge CGT hole in government finances. The extreme socialists in government are doubling down, pushing for yet more taxes on the rich to cover the budget deficit, despite the mess they have already created and the lessons they refuse to learn.

Rachael was blubbing in Parliament when she realised her errors and will have cause to do so again. But those who will join her in misery are the hedge funds long of sterling and gilts, when they see yields rising and sterling falling.

Get out of sterling — it is wildly overvalued and due to crash.