Governments think it’s time to blame the speculators again. You may remember the speculators and share shorters who dared to sell bank shares during the monetary and regulatory collapse of 2008. They were the cause of that crisis according to some official sources. Governments recommended at the time stopping people selling bank shares short, as if that were going to resolve the collapse of banks, brought low by bad banking and by excessively easy credit and banking regulation.
Today Greek and Spanish officials are briefing that bond speculators are bringing down their government debt for no good reason. Apparently investors and markets should go on lending as much as these worthy Ministers and officials want to borrow, so their salaries can be paid regardless of the financial plight of their countries.
Socialist morality is difficult to grasp. Apparently poor Chinese, who live on incomes far below those of Greek or Spanish officials, should have to lend to Greece and Spain so those same officials can carry on enjoying their high salaries. Those officials will then buy Chinese goods at cheap prices with the Chinese money their state has borrowed, so the Chinese can carry on working in the fridge or tv factory. The Chinese workers may not themselves be able to afford the tvs and fridges which they make, but collectively they should lend rich countries the money so westerners can.
These officials should stop wallowing in self pity and self justification. Countries like Greece, Spain and the UK have been borrowing too much. The Chinese and others do not have to go on lending to them. It is time for them to sober up and get a grip on their excessive deficits. Speculators helped save the UK from the political madness of the Exchange Rate Mechanism, forced upon us by all three main political parties. Speculators may well speed up the obvious necessity to limit debt. If they do so future generations should be grateful. Allowing these present governments to carry on borrowing is as kind as allowing the alcoholic with a weak liver to carry on drinking alcohol.
PS: There is a bit a fight back going in the EU against the idea of Greek bail out. Axel Weber of the ECB has said of the Greek plan to slash the deficit ” Now actions have to follow words”. Official German governemnt spokesman Urich Wilhelm has put out on Reuters a rejection of “unfounded reports citing coalition sources saying a decision for aid for Greece has in effect been made”
The UK government should make it clear as a non Euro member we certainly won’t be signing a cheque for Greece with all the money we have borrowed and printed.