Monday, January 19, 2009

Why the latest bank bail out won't work

Brown has pledged billions of pounds more of taxpayers money to guarantee the bad debts of our banks.

The Prime Minister announced a scheme to allow banks to exchange cash or shares for a Government guarantee on their "toxic" debts, transferring any losses they suffer from the banks to the taxpayer.

The hope is that the banks will start lending money again. It is a forlorn hope. The problem with the banks debts are that they are global - I believe the figure is something like 80% of the debt held by British banks is overseas debt. If that figure is correct then regardless of what Brown does the banks are not going to be lending money either to each other or anyone else - and it also calls into question why our government are spending so much money to support foreign debt.

The problem, as I understand it, is getting British banks to start lending money to British businesses and individuals - but because all the banks are interwoven into this intricate and rapidly collapsing foreign web of finance they can't. Nor can it be solved by simply "nationalising" a particular bank - they will still have substantial foreign debt and that will still affect their lending.

The government would have been far better off letting those big name banks collapse into the self-inflicted pile of shite they created and serves them bloody right. They could have used those billions of pounds to set up a new, national and British only bank serving British business and British customers only.

It's not the banking system that is in crisis - it is globalisation and we are pumping billions of pounds into supporting that at the expense of our own national economy. Stupid.

1 comment:

MC Shalom said...

They Bail Out, We Opt Out.

All of Our Economic Problems Find They Root in the Existence of Credit.

Out of the $5,000,000,000,000 bail out money for the banks, that is $1,000 for every inhabitant of this planet, what is it exactly that WE, The People, got?

If Your Bank Doesn't Pay Back Its Credits, Why Should You Pay Yours? Or Else ...

If the Banks Get 0% Loans, How Come You Don't?

At the Same Time, Everyday, Some of Us Are Losing Our Home or Even Our Jobs.

Credit is Mathematically Inept, Morally Unacceptable.

They Bail Out, We Opt Out

Opting Out Is Completely Anonymous.

The Credit Free, Free Market Economy

Is Both Dynamic on the Short Run & Stable on the Long Run, The Only Available Short Run Solution.

I Am, Hence, Leading an Exit Out of Credit:

Let me outline for you my proposed strategy:

Preserve Your Belongings.

The Property Title: Opt Out of Credit.

The Credit Free Money: The Dinar-Shekel AKA The DaSh, Symbol: - .

Asset Transfer: The Right Grant Operation.

A Specific Application of Employment Interest and Money.
[A Tract Intended For my Fellows Economists].

If Risk Free Interest Rates Are at 0.00% Doesn't That Mean That Credit is Worthless?

Since credit based currencies are managed by setting interest rates, on which all control has been lost, are they managed anymore?

We Need, Hence, Cancel All Interest Bearing Debt and Abolish Interest Bearing Credit.

In This Age of Turbulence The People Wants an Exit Out of Credit: An Adventure in a New World Economic Order.

The other option would be to wait till most of the productive assets of the economy get physically destroyed either by war or by rust.

It will be either awfully deadly or dramatically long.

A price none of us can afford to pay.

“The current crisis can be overcome only by developing a sense of common purpose. The alternative to a new international order is chaos.”

- Henry A. Kissinger

They Bail Out, Let's Opt Out!

If You Don't Opt Out Now, Then When?

Let me provide you with a link to my press release for my open letter to Chairman Ben S. Bernanke:

Chairman Ben S. Bernanke, Quantitative [Ooops! I Meant Credit] Easing Can't Work!

Yours Sincerely,

Shalom P. Hamou AKA 'MC Shalom'
Chief Economist - Master Conductor
1 7 7 6 - Annuit Cœptis
Tel: +972 54 441-7640