Mish's Global Economic Trend Analysis

---

Public Union Wage Bargaining Ends at National Level in Great Britain Posted: 17 Mar 2012 08:17 PM PDT I am pleased to report the end of collective bargaining at the national level. Unfortunately, I am talking about the UK, not the US, and also unfortunately, local wage bargaining will remain in place. The Telegraph reports National pay rates will be scrapped in budget. Millions of teachers, nurses, civil servants and other public sector workers are to lose their right to national pay rates, the Chancellor George Osborne will announce in next week's Budget. George Osborne will say that public sector employees in poorer parts of the country should have their pay frozen until it is brought into line with local private sector workers. Mr Osborne originally intended to introduce local pay rates in April 2013, but has decided to bring the plans forward by a year in an attempt to boost growth. The move is likely to be met with a furious response from unions, which are already threatening industrial action over cuts to pensions. The Chancellor will publish figures that show that in some parts of England and Wales public sector workers earn almost a fifth more than those in equivalent jobs in the private sector. The Treasury argues that the pay gap leaves private companies struggling to compete for the best staff against public sector organisations, whose workers also enjoy better pensions and job security. The National Union of Teachers said it was calling a one-day strike in London on March 28 as the next step in its pensions campaign. Mr Osborne, however, is determined to push ahead with the reforms to pay and pensions. The Treasury wants to base the plans on a local-pay system introduced for staff in courts under the previous government. This is a start, but if you are going to incur the wrath of labor unions, and Chancellor Osborne surely will, then you may as well go all out. The correct move is to end bargaining altogether. If unions don't like it, too bad. If they can make more in the private sector, they can go for it. Public unions bankrupted Greece, they will bankrupt Spain, they have the UK and the US on the verge of ruin, and they have bankrupted numerous US cities already. Correct Policy Trifecta End public union collective bargaining completely End all prevailing wages laws including Davis Bacon Institute National Right-to-Work Laws Unlike parimutuel horse-racing bets, any order will suffice. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

James Grant Says Bond Market Is "Bubble of Modern Banking, a Desert of Value; Gold a Reciprocal Faith in Bernanke"; Time for an "Office of Unintended Consequences?" Posted: 17 Mar 2012 10:41 AM PDT James Grant, publisher of Grant's Interest Rate Observer, talks about Federal Reserve monetary policy, the bond market and investment strategy. Grant, speaking with Deirdre Bolton on Bloomberg Television's "Money Moves," also discusses the Chinese economy. Link if video does not play: Bond Market 'Desert of Value' Select Interview Quotes Grant: The Fed seem bent on suppressing this most elegant thing we have called a price mechanism, the movement of price that determines all manner of things in a market economy. Yet the Fed seems bound and determined to superimpose its will in place of the price mechanism. Take the bond market for example, the Fed has hammered down yields directly and indirectly and in response people are throwing money at things like high-yield or junk bonds. These are the prices the Fed wants, but are they the right prices? No not necessarily. Deirdre Bolton: How is a bond investor to deal with this current environment? You are calling actually for a bear market in bonds, am I correct?. Grant: I have forever. So I am no help there. But it seems to me a bond investor is almost better off in cash. If you were to go out 10 years in a US treasury security you earn yield of approximate 2%. To remain in cash and be flexible you sacrifice those 2%. The bond market is a desert of value. Deirdre Bolton: What does this mean for gold? Grant: The price of gold is the reciprocal of the world's faith in the deeds and words of the likes of Ben Bernanke. The world over, central banks are printing money as it has never been printed before. The European Central Bank has increased the size of its balance sheet  at the annual rate of 89%. It's amazing. The Fed is far behind at only 15%. The Bank of England 67% over the past few months. These are rates of increases in the production of paper currencies we have never seen in the modern  age. It takes no effort at all. They simply tap the computer screen. Time for an "Office of Unintended Consequences?" Grant proposes the Fed start an "Office of Unintended Consequences" to study all the things that go wrong with Fed policy. I believe Grant is speaking tongue-in-cheek. We certainly do not need such an office. Instead, we need to abolish the Fed. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610