If buying one very large bank was careless, buying two is lunatic.
When the government bought RBS instead of assisting it short term and at least cost it bet the farm. Now buying control of LLoyds/HBOS it is betting the farm, the shop, the factory and everything else of value in our overborrowed country.
When I pointed out that buying RBS meant you could lose the annual defence budget with a 2% fall in the value of the bank’s assets, some Labour MPs looked worried. With both LLoyds and RBS as state pensioners we can now lose the health budget with an adverse movement of a little over 3% in their “assets”.
I used to ask where did they think all the money was going to come from to buy all this financial ironmongery. Surely there was some limit to the possible borrowing? Didn’t they realise it was the same money they borrowed to pay the nurses that they were now borrowing to pay the bankers’ bonuses? Which should be the priority? Can you really afford both?
Now we know their answer. They will print the money to buy “whatever it takes”. Your farm, your shop, your factory is now on the line for the biggest national overdraft in history. And if the global bankers and savers start to call time on the national overdraft, worry not. They have already borrowed the money to buy the electronic printing presses.