A MESSAGE FOR THE CHANCELLOR. DO NOT UNDER ANY CIRCUMSTANCE INCREASE TAXES ON THE ACCUMULATION OF WEALTH.

Wealth is already taxed when you spend it, earn income from it, inherit it, derive capital gains from it, transfer your capital, pay your local taxes and if you reduce people’s wealth you will reduce all these tax sources as well as destroy the future source of further taxation.

The incentive to accumulate wealth is very important for everyone. It encourages some wealth creators to work hard and dream about that large mansion and a Rolls Royce and along the way they will create jobs and income for those people who are happy not to risk everything in an entrepreneurial lifestyle but just want to provide security in their old age and buy care, pay for operations that would otherwise require them to wait for six years on the NHS, pay heating bills, kick start their children and grandchildren’s lives and much more.

Many wealth creators become philanthropists and help others, support their community, have cranky ideas about setting up free communication systems, going into space etc and the important thing is that they are using or wasting their own money rather than that of the taxpayer.

So don’t be jealous of successful wealth creators, let them keep their wealth and thank them for all the good they have done accumulating it, spending it and deriving income from it. We are all better off because some people are incentivised to create wealth and are successful in doing it.

We have reached a point where more wealth taxes will reduce, not increase revenue now and into the future as the incentive to dream and make a secure future for oneself is gradually being taken away.

9/10/26

THERE ARE CERTAIN THINGS THAT GOVERNMENT HAVE TO DO BUT THIS DOES NOT MEAN THAT THEY WILL DO THEM WELL.

Public Goods and Services are non-rival & non-excludable (produce them and anyone can consume them) so they cannot be traded in a market but we all need them.

Law and order, internal and external defence, street lighting, regulations to see a level playing field for producers and consumers,some communication and transportation networks. These need to be purchased on our behalf by government, not necessarily produced by government, and paid for by taxation.

Merit Goods and Services have an excess of external benefits that would not be recognised in markets and Demerit Goods and Services produce an excess of external costs to society.

Merit goods such as education and health would benefit society more if they could be supplied free and the point of consumption hence there is a strong argument for a National Health Service and State Education as there is also a strong argument for the options to also provide education and health privately. Demerit goods such as smoking, gambling and alcohol can be managed by taxation that can be transferred to subsidising merit goods.

Private Goods and Services are rival and excludable (they can be provided to individuals who can exclude others from their use) and best bought and sold in competitive markets with minimum interventions by government except for regulating a level playing field for competition.

Reverse Income Tax can protect people from low pay and poverty and slim down the Welfare State to just helping only those who are incapable of helping themselves.

7/10/26

TRUMP HAS SAID THAT INFLATION COULD RAPIDLY PAY DOWN THE NATIONAL DEBT

Surely he knew that governments have been carrying out this fraud for the last centuries by growing the debt, financing part of it with new money and then seeing the debt reduced a year or so later when the inflation hits and reduces the value of money in circulation including the money contracts in the National Debt.

At this point we have seen government borrow, buy at lower prices pay interest at a reducing real rate and finally reduced the value of all future debt repayments.

Trump should now be told why bond yields are rising in anticipation of this happening.

2/10/26

IS THE BOND MARKET THE PROBLEM?

The answer is a simple NO.

The bond market is a neutral market place with buyers and sellers.

When the government wants to sell more bonds it has to make the price attractive to buyers.

The problem is that excessive government spending in the U.K. and US has created budget deficits that require increased sale of bonds. To sell those bonds the price has to fall and the yield rises.

This problem is aggravated when bond buyers lose confidence in the government’s ability to maintain the future value of money and have to build inflation risk into the bond price they are prepared to pay.

How do we solve this problem in a market?

The governments cut their spending or raise tax revenue to reduce their deficit and offer less bonds for sale in that market.

Confidence will then return to the bond market, prices will rise and yields will fall.

1/10/26

NEW MONEY AND HOW IT ENTERS THE ECONOMY

There is a lot of confusion and misunderstanding about how new money enters the economy.

Some academics argue that it only benefits bankers, the rich and wealthy. The fact is that nobody knows how new money spreads throughout the economy but I know how it enters the economy and there are only two ways.

1. The currency component of money enters the economy when the Central Bank buys back government debt and prints currency to pay for it. This could happen through QE or the expansionary side of Open Market Operations. The immediate beneficiaries are government who originally borrowed this money to spend anywhere in the economy, buying goods, services or employing more civil servants or setting up more committees. Government are now absolved from interest payments as these are now transferred to the government’s Central Bank. Overall currency is less than 10% of the total money supply increases.

2. 90% of the money in circulation was created when private banks issued loans to customers. When there is a permanent increase in loans created then the money supply increases and this money enters the economy as those who borrowed the money spend it on anything. Quite often this is to buy property.

Together these are managed by the Central Bank and the real cost is paid for by the taxpayer and holders of money contracts who pay the inflation tax.

As soon as new money enters the economy it spreads indiscriminately and is then divorced from the original issue being used again and again to measure transactions and flows of income.

23/9/26.