Comments on: Sort the banks

By: Matt Wright

Matt Wright — Fri, 28 Nov 2008 02:09:33 +0000

I am deeply concerned not just about the state of the economy and Browns irresponsibility but the behaviour of this Govt. They have provided little time for the debate despite them claiming Brown is leading the world and its a great plan! Now on top of the ever increasing spin we have the situation over the arrest of Damian Green. I'm not going to comment in detail on this latter episode until we know more but nevertheless there is enough to concern us already about the conduct of this govt.

By: emma2000

emma2000 — Thu, 27 Nov 2008 23:59:43 +0000

I have lived through the last three recessions of the 70s, 80s and 90s and for the first time I really am scared. This government terrifies me in too many ways to go through. I really thought, at the time, Tony Blair was a breath of fresh air but that didn't last long but you couldn't help quite liking him in spite of his many faults. Brown frightens me and I am inclined to agree he is unstable, no decent person would put party before country in the present circumstances, especially given his large contribution to the mess. I am retired, on a reasonable pension and I am one of the relatively lucky ones, but I am beginning to wonder if even that is safe! given it is not a government pension. I certainly won't be spending more, in fact I am frightened to spend on anything big in case the shop goes out of business. Just yesterday I heard of yet another friend in his late 50s being made redundant from a good IT position, what chance will he have of a comparable job now? and there must be many more in the same position with still young children and a mortgage. In just 11 years Labour have managed, as usual, to ruin this country in so many ways. They always did economically of course but never before have had so long a period to complete the wreckage. Tony Blair was the smiling face that fooled so many and to be fair I do think his intentions were good and he would have been a far better PM if he had sacked Brown, my loathing of that man is so great I cannot bear to watch or listen to him and I simply don't understand how anyone, apart from his vastly increased client state could even consider voting for him. Any government would be better than this lot regardless of Party and it will be a very long, hard road before we get the chance to get rid of him.

By: jean baker

jean baker — Thu, 27 Nov 2008 21:27:27 +0000

Banks lent 'credit' against money (collateral) they didn't have.

This occurred as a direct result of labour's abolition of financial regulation in 1997. Economists forewarned …..

By: Keith

Keith — Thu, 27 Nov 2008 21:19:52 +0000

Jon,
You quote the government's stubborn refusal to allow time to debate the budget.
I was under the impression that it was Gorbals Mick who imposed a three hour time limit.
Are you saying that Gorbals Mick is a tool of the government? Surely not!

Reply: It is not fair to blame the Speaker on this occasion. He granted a special debate which we sought against the wishes of the government. Under the rules of the House he could only grant 3 hours. We appealed to the government to allow more, but they made it clear they would use their majority to prevent fuurther debate.

By: jean baker

jean baker — Thu, 27 Nov 2008 21:08:22 +0000

Reckless borrowing is one thing as far as responsibility is concerned; believing Brown's pronouncements of economic growth and stability is quite another matter. Borrowing on this understanding is called 'being conned' !!! Discovering that the 'conman' has landed your family in four generational levels of debt shows contempt at the level never before witnessed in the history of British politics.

Had Brown applied his self serving policies in free market private sector, many believe he would have been imprisoned for fraud and embezzlement – having caused four generational debt to shareholders. I can think of two employees imprisoned for causing considerably less loss to banking establishments.

Brown displays increasing symptoms of megalomania – detached from all reality and responsibility.

By: Acorn

Acorn — Thu, 27 Nov 2008 20:41:14 +0000

Andy, it depends what you mean by "money". If you mean the folding stuff in your pocket that is still out there, about £44 billion of it. A lot of it has found its way back to the BoE on deposit and technically not in "circulation". The rest of it is in the form of bits of paper, basically IOUs that promise to pay you a bit of interest for holding that bit of paper for a while. You are allowed to use that bit of paper as "collateral" and use it as "near enough cash". Should you wish to convert your IOU into nice crispy folding in the wallet stuff; that's when the BoE fires up the printing press.

If you want to pay someone with a cheque say; you have to have cash in the bank to cover it; the BoE doesn't.

Money is created when someone takes out a loan at their bank. Money is debt; debt is money. When you pay back the loan the money disappears into thin air. It also does that if you go broke and don't pay back the loan and your bank ends up being worth a bit less than it was or in some cases worth bugger all.

By: DBC Reed

DBC Reed — Thu, 27 Nov 2008 19:56:21 +0000

I'm beginning to have a certain sneaking sympathy for the banks.Why should they lend cheap credit into a falling property market via old-fashioned mad mortgages? They had their fingers well and truly burnt with the last housing bubble,seeing their investments go down the Swanee in the bust. I will not flaunt my Socialist credentials on this occasion as it seems to me a time when private institutions like banks should resist the threats by the government to inflate another housing bubble.Mind you if the Gov were to announce a land value tax when the property market bottoms out to stop land values ( the inflationary element of house prices) going up again,banks might very well feel emboldened to re-enter a less dangerous form of mortgage lending.Bankers for Henry George!

By: mikestallard

mikestallard — Thu, 27 Nov 2008 19:00:13 +0000

I am so pleased to be able to glean a little commonsense from this site. The three things which I treasure most are:
1. The remark, made yesterday, that this crisis looks so much like the terrorist crisis when the government pinched a lot of our English rights from us and then used them in the most unjust ways. Now it is using the banking crisis to nationalise the banks by whipping up hatred against them.
2. The way that the threat of complete melt down has never receded. It is rarely mentioned elsewhere. But if the pound disintegrates, how do we buy food, oil, gas, electricity, clothes or personal safety?
3. A really clear dissection of why the banks are no longer doing their job of supporting business and mortgages.

By: Caroline Jones

Caroline Jones — Thu, 27 Nov 2008 18:55:52 +0000

Mr Redwood, like everyone else I am following events with increasing alarm. With the state of the country's finances, how bad will it have to be before a state of emergency is declared? I was impressed by George Osborne's performance and disgusted by Gordon Brown laughing while we are in serious trouble. Like many people, I feel he is a little mentally unbalanced. God help us.

By: mikestallard

mikestallard — Thu, 27 Nov 2008 18:50:41 +0000

I am afraid that he is so used to spinning the figures – CPI, Census, national debt – that one more little "mistake" goes unnoticed. Lord Eatenough (I think that was his name) was on the radio saying that we had to borrow "a hundred trillion pounds". Well, anyone can make a slip of the tongue, can't they. He then went on to talk about "trillions" instead of the billions which he obviously meant to say. Was there any correction? No. I wonder, myself, how accurate the GDP figures are anyway. All through this crisis, the figures have been widely disputed.