Britain's Trillion Pound Horror Story

[Malcolm Robinson]

For anyone that missed this..........

http://www.channel4.com/programmes/britains-trillion-pound-horror-story/4od#3139408

[threegee]

But hang on Malc, Gordon & Alastair told us a zillion times this was an international problem! Someone else spent all that money not us! So we really don't need to cut ourselves up about it and we'll get it back somehow.

My guess is that it was those gnomes in Zürich; you know the ones who stole all the money in the previous Labour governments and were never brought to book. Why they always wait until Labour has been in power a while beats me, but I suppose it's just a coincidence. Anyway I'm going to carry on voting Labour as I'm sure Red Ed has all the answers, and as soon as Alan Johnson finishes reading that book on economics he just bought he'll know exactly were those gnomes live. Obviously exactly the right man to sort out all this international economics malarkey!

[Malcolm Robinson]

GGG,

I think it's even worse than that, I think it's about 'wealth' being transferred from West to East and us borrowing to maintain consumptive lifestyles.

Why else would we see our debt rocket over a short period? We used debt to load up the economy at a time of what was supposed to be the peak part of the economic cycle. Private sector jobs and businesses should have been expanding but instead we saw a massive increase in the public sector which was used as a smoke screen to hide the real position. We shouldn't have had the 'boom' now we are probably passed the point of being able to get public finances back into any sort of order.

All that public sector stuff carries its own fiscal toxicity and we only have to consider pension liabilities and PFI, when those chickens come home to roost, game over!

20-30 years ago we happily allowed outsourcing of jobs to places where wages were a bowel of rice a day. Now those workers want their own Mercs, 50 inch plasma's and home ownership. For a fiscal system to work there has to be a finite amount of available 'cash', taking this globally for every Chinese worker who buys a new car there has to be a corresponding drop somewhere else and that has to be over here. That is the equation we have indebted ourselves trying to square.

Now we see the likes of China, and India to some extent, buying 'continuation of supply' in the likes of rare commodities and minerals and once they start to service their own domestic markets we will never be able to compete for raw materials so our already depleted manufacturing sector will become even more moribund.

There is not one Western Government grasping the nettle, with the possible exception of Germany and their increasing trade using quality and performance. The rest are happily printing money, trying to hide debt and imposing austerity measures which will be detrimental to the economic activity needed to actually build our way out of the mess.

I don't have the answers but I do know what is happening is wrong!

[Merlin]

Strite owa me heed, and still travlin to the ootta planetoids. EH! :dribble:

[Stephen]

I thought the programme did a good job of trying to get across the scale of the debt, I often hear people saying that all we need to do is cut a few million off MPs wages and expenses or money sent overseas. Easy targets but it would be like trying to empty the overflowing bath in the programme with a thimble. The debt is so huge though that it is understandable that most people just don't understand what a trillion is. The really shocking thing was the MPs (of all parties) who had no idea how big our debt was either.

I thought they overdid their argument about how much better Britain was as a low tax economy in the 19th Century though. We had a huge technological advantage back then and also a huge Empire to export to (and the ability and willingness to open up markets like China by force).

[Malcolm Robinson]

This would seem a good start to me. Ending the hegemony of the big banks and politicians and also giving people access to reasonable rates has to be the way forward?

[threegee]

...as soon as Alan Johnson finishes reading that book on economics he just bought he'll know exactly were those gnomes live. Obviously exactly the right man to sort out all this international economics malarkey!

http://www.bbc.co.uk...litics-12242397

Well there's a surprise then! Obviously Honest Alan couldn't quite make it past chapter one.

Sad really, as he seems one of the most straightforward guys amongst the entire bunch of financial-holocaust-denying Labour front-benchers. And.. it's now back to the old global problem cant, and pure unadulterated Balls! Could have been worse though. Could have been Mrs Balls - AKA Yvette - mouth disconnected from brain - Cooper.

Maybe Andrew Neil should now ask her who she thinks it was that wrote the rule book that the UK Banks were required to operate by in the years and months leading up to the banking crisis?

This would seem a good start to me. Ending the hegemony of the big banks and politicians and also giving people access to reasonable rates has to be the way forward?

A golden opportunity missed! If a couple of the banks had been let fail then they could have been reopened as town community banks. Banks that did not indulge in "financial products" or even mortgage lending; had a very high fractional reserve making them rock solid, and were isolated from each other to prevent contagion in case of bad management. The community banks could pay out all their profits to depositors, regarding every pound deposited as a share, and reward the management in proportion to the interest paid. The market would take care of the rest.

That's the sort of thing I'd have expected from a true socialist government with its head planted firmly in the reality of a capitalist world. But Labour isn't a socialist party and hasn't been for yonks! It's like the Democratic Party in the states - a bunch of fast talking lawyers and social climbers who have difficulty holding down any sort of regular job.

[Malcolm Robinson]

A golden opportunity missed! If a couple of the banks had been let fail then they could have been reopened as town community banks. Banks that did not indulge in "financial products" or even mortgage lending; had a very high fractional reserve making them rock solid, and were isolated from each other to prevent contagion in case of bad management. The community banks could pay out all their profits to depositors, regarding every pound deposited as a share, and reward the management in proportion to the interest paid. The market would take care of the rest.

That's the sort of thing I'd have expected from a true socialist government with its head planted firmly in the reality of a capitalist world. But Labour isn't a socialist party and hasn't been for yonks! It's like the Democratic Party in the states - a bunch of fast talking lawyers and social climbers who have difficulty holding down any sort of regular job.

I think that is exactly what we need, small localised community banks, but I do think they should be allowed to take on mortgages to put them on longer term stability. The price of those asset purchases might be another matter! We need to get the froth out of the market and see houses as homes not investment vehicles.

Credit Unions whilst they do satisfy a very small market are not able to stand up against the traditions banks overall so we need something else.

I hope everyone sees the APRs on these now TV advertised quick short term loans……..2000+%, that's loan shark territory! Even some credit cards carry 20%+ rates, store cards even worse. All of this at a time of ZIRP, zero interest rate policy, which I think GGGs hyperinflation is about to blow out of the water.

[Malcolm Robinson]

I think Alan Johnson is a consummate politician, always 'on message' and a bit too sharp. However resigning over what the rumours have suggested is the reason would enlist sympathy from me……

[threegee]

He's undoubtedly got "personal problems", but it's also clear he was never comfortable in the job, or the right person for it. That reflects on Red Ed, and also on entire Team Labour, as they have no one to fill this important role other than the guy who was one of the major architects of the current disaster.

If they want the public to believe that they have any degree of economic competence then they need someone other than Ed Balls! Once again Labour is hoping that people with short memories, youngsters, and immigrants will fall for their tripe. It doesn't have to be like this; they could return to their roots and rethink their professed socialism to fit it in with 21st century circumstances and free market economics. That's not going to happen because none of them has the wit or intelligence to do it. Being a Labour MP is simply a leg up the ladder for people who couldn't do it any other way. Akin to being a used car salesman - except I'd probably need to apologise to used car salesmen everywhere for even suggesting that.

No, I don't think local community banks should indulge in mortgage lending. Local banks never did this historically; that's the province of building societies. It gobbles up and ties up capital for decades which should be used to promote local enterprise. I'd call them local enterprise banks, where local people could back local business and local jobs for an assured and guaranteed return, and KNOW that their money wasn't fuelling house price inflation and speculation.The sort of money available to finance the local housing stock simply isn't available from local savers, even when the fractional reserve multiplier kicks in, and for rock solid stability we'd need something akin to a 25% fractional reserve.

[Malcolm Robinson]

There can't be many people left now who really believe Brown was the Prudent Iron Chancellor his spin doctors promoted during that tenure. Stripping away a few of the cobwebs we see two of his advisors at the time were non other than Red ED and Eddie Balls! No wonder they don't like talking about the run up to the banking crisis!

It looks like we are going to see a forced separation of the retail from investment banking if the current recommendation gets accepted, although how they might force a fully private company into diversifying along those lines is a bit unclear to say the least!

The only problem I have with a local savings bank backing local enterprises is the natural failure rates and the needed professionalism in consideration of any loans. I can see it makes sense I just think there would be too many imponderables taken on by the savers. A house is a house is a house, an entrepreneurial business start-up is quite another thing!

[threegee]

However - there are a lot of people who don't really understand what happened. Just as there are a lot of people who continue to vote Labour no matter how may economic messes they get us into.

While the intrinsic population has wised up over the decades, the Labour elite has cynically ensured that there are another two million left-leaning citizens and their booming offspring in our country who have little knowledge of their previous !*!@#-ups, and who will replace the diminishing number of citizens who vote as their uneducated parents did.

If that sounds cynical then try this:

There simply won't be any meaningful banking reform! That's because the banks are too powerful, and for their part have engineered that by internationalising their business they are more powerful than any single government. That's a situation which the europhiles (whatever their political persuasion) have walked right into with their eyes wide open.

The only possible reform can be a bottom-up one along the lines I've hinted at. A genuine People's Bank - please note Mr Ronnie Campbell - with government guarantees and a whopping fractional reserve. If you have the common sense to explain to your electorate how the present system really works Mr C, then you'd have far more people queuing up to use it than you had trying to get their money out of Northern Crock.

You do know how the UK banking system works don't you Mr Campbell? If not then use the Internet to do some research, then get off your backside and apply some of those socialist principals you profess. A lot of local people - of all political inclinations - will back you, and your Wikipedia entry might then read less like a cruel joke on the intelligence of the people who elected you!

"Campbell is noted for accidentally supporting the first National Fetish Day, due to him misunderstanding the meaning of the word "Fetish". Campbell said in an interview, "I thought a fetish was a worry, like worrying about backing the right horse."^[1] When the government nationalised Northern Rock in 2008, Campbell declared it the People's Bank and opened an account.^[2]"

[Malcolm Robinson]

There is to be a People's Bank, if we believe the current crop of politicos and this Big Society ideal, being funded out of dormant bank accounts. Investing in the voluntary sector where we are seeing huge cutbacks in funding now but there is a bit of the small print worth reading. This investment is being seen as just that, it will make loans not grant funds quite a different beast and something most of the voluntary sector will be hard pressed to justify!