Mr. Redwood, according to the report in the Metro, Gordon Brown has invoked anti terrorism laws against the assets held by Iceland and Icelandic Nationals in the United Kingdom.

Do you think this is appropriate use of leglislation in this case?

I don't think so, but it does in my opinion illustrate how easy it is to abuse this type of sweeping leglislation once it is on the statute books, regardless of the assurances given during the passage through Parliament.

As long as the British people have a culture of owning their own property the ups and downs will happen. If a government creates a fiscal policy to deter asset price inflation, and it proves unpopular, the other party will simply promise to abolish it upon election.

Why don't we just accept that boom and bust is a reality, even if it wasn't property it could be another asset class. People borrowed to buy shares in the roaring twenties and during the dotcom boom. If we all went crazy for some other kind of asset I'm sure someone would find a way of creating the loans to pump the bubble up.

If you ask me, the sooner property falls 30 – 40% from peak the sooner the big wall of money out there will dip their toe in the water of recovery.

That's been the flaw in your argument. No private capital entity, or for that matter, sovereign entity, has been interested in investing in a UK bank.

There is no alternative, as I think even Osborne acknowledges.

Still taxpayers wake up tomorrow owning the banks. Socialism triumphs. The road to serfdom beckons.

What do you think re interest rates. Should they be increased or decreased ?

Grateful for your thoughts.

Mark Wadsworth's suggestion of debt for equity swaps looks perfectly feasible but there appears to be little appetite in the City for anything beyond temporary part-nationalisation.But why temporary and why part?The only inference to be drawn from the temporary nature of the arrangement is so that the banks can be tided over and when they start making money again can be bought back so that the private sector can step in when big trouble-free money is to be made.The part nationalisation notion just affords a free ride during the trip back to profitability with the shares gaining in value along the way.

Properly conducted national ownership of the production of credit is not only a useful stop-gap but a juster system whereby the nation resumes control of the common stock of money in much the same way as the Single Tax on land returns the profits of land (or economic rent) to the community.(The great land reformer Silvio Gesell also taxed the circulation of his money at set intervals.) Interest rates in a fully nationalised scheme could act as such a tax(minus the payment to savers)which could replace other taxes on the workers (already less burdened under LVT).Also Gesell's money circulated at a ferocious speed as people passed the notes on before the tax became due so unfreezing the system.

At the moment LVT might serve to unfreeze the system somewhat because the banks could be freed to lend money on houses without fear that they would be getting into another bubble, which might develop from the value of the land underneath expanding before catastrophically contracting. The much sought-after floor in the housing market slide should be not some ratio of house prices to earnings(by definition inflationary) but as near as possible the cost of the bricks , mortar,labour + a profit.

Reply: This is not a Conservative website. This happen to be my website, and I am a Conservative. I did not make critical comments about the miners, and do not intend to attack the many people who worked for banks doing a good job. I have already criticised the Directors and regulators.

Exactly!

The private sector solution is called "debt for equity swaps".

Like Neil Craig, I am horrified that Cameron & Osborne are going along with this whole idea that the government should be spending one penny of taxpayers' finest on propping up banks.

That's that fixed for now. And if you want to avoid property price/credit bubbles in future, sensible regulation is half the battle and replacing Council Tax, Business Rates, Stamp Duty Land Tax and Inheritance Tax with Land Value Tax will prevent them once and for all.

Roll up roll up !

Get your economic fallout shelters here !

I'm taking orders now so if you'd like to send me £100 please I'll send you a drawing of how to build one of your very own.

Choose any colour you fancy as long as you have the paint.