Jersey begins to sink

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This article is from the Jersey Evening Post. It is significant, so I reproduce a lot of it:

JERSEY'S finance industry has weathered the autumn breezes, but the winter chill is about to set in, analysts warn.

Forecasters say that business has slowed in this the final quarter of the year, with funds, banking deposits and company formations in decline. The latest quarterly statistics compiled by the Jersey Financial Services Commission show that in the three months to September bank deposits increased marginally, from £196.9 billion to £197 billion.

However, this compares less favourably with the total £219 billion recorded at the same time last year. Over the quarter the number of funds continued to increase, with 45 new fund applications approved, bringing the total to 1,452.

Of those new funds, 16 are 'expert' funds, with 401 funds for sophisticated investors registered in the Island since the expert investor scheme was introduced in 2005. However, the net asset value of the total funds has gone down by 1.8% over the quarter, from £244.2 billion to £239.9 billion. Geoff Cook, chief executive of Jersey Finance, said that the figures were 'encouraging given the market conditions', but that since the end of September there had been 'significant turmoil' in world markets.'

The significance is this: Jersey has a massive tax 'black hole'. It can only survive with 5% growth. It is obvious that 0% will be good: recession is likely. That is what I forecast some time ago. In that case a massive budget deficit is likely. It cannot survive a deficit.

The writing is on the wall.

No wonder Alastair Darling is reviewing their future.