Which governments face biggest market risks?

Question: Which governments face biggest market risks?
Answer: All of them

This is controlled demolition of global capital in order to resume growth!

We are subjected in the preparation of the ultimate goal is - gold backed global currency. That's what this whole charade is all about.

Now, call me a conspiracy theorist and resume looking for a calf under the bull.

The austerity measures are treating the symptoms not the causes of the crisis.

The cause is the financialisation of the economy.

There is much empirical evidence that we have been storing up trouble for at least a decade. State interventions (such as lowering interest rates and facilitating easy credit) have masked the problems that the 2000 dot com bubble signalled.

P.S. For those who want to scratch beneath the surface of our current predicament, yesterday's Keiser Report with Michael Hudson is worth 25 minutes out of anyone's day:

https://maxkeiser.com/2010/06/08/kr49-keiser-report-markets-finance-and-michael-hudson/

So are investors banks - or are banks investors? The IMF funded Romania, Hungary and Bulgaria - yet those countries want more funding from EU because they can't repay the IMF. Yet the IMF are funded by everyone?

Banks were bailed out by taxpayers, yet taxpayers don't own the banks who fund the governments who fund the EU Central Bank to help fund the IMF losses from countries who can't afford to pay them back?

Cuts to come caused by banking collapse that we paid to stop, increasing all countries deficit, will cause job losses which will reduce income tax and increase unemployment support which is paid by government who have lost revenue from income and loss of spending power by unemployed who have previously paid to bail out the banks?

Sorry to meander, but is this the financial picture as it stands now?

At last, someone is talking sense. It has been obvious to many observers that France in particular is in an extremely precarious position. No French government in the last two decades has been able to reduce public spending and the country’s huge ongoing debt. And I don’t think that anyone can seriously believe that the existing government will be able to do so. Even Mme Merkel has now realised the truth, after months of being taken in by clever French diplomacy, hence her decision to cancel this week’s meeting with President Sarkozy. In fact there is no true French/German partnership, it’s all hot air put about by French ministers.

For too many years French governments have verbally supported Europe’s policies but never carried them out at home. And still it continues, with government politicians making placating noises towards Germany, but having no real intent of reducing debt. French speakers should see the reader’s comments attached to le Figaro website articles ( a right wing, supposedly government supporting newspaper) to see how the majority of comments are from people becoming frustrated by their governments lack of realism.

I think it is transparently clear what the problem is. Money really is just little worthless bits of paper and computer records!

Shock horror! Right, that's over and done with now. It was good to get it all off our chests. So let's get on with our real lives, without obsessing about trust and risk.

What a relief to get back to normal, eh?

Robert, your analysis is fundamentally flawed, as it omits to show how much of each country's debt is held by its population, rather than by international investors who are more fleeting.

Masses of the bonds are held by pension funds of people in that country. When those bonds mature, it is quite likely that the majority of the cash will then be re-invested in new bonds from that country. For example, do you really think that a German pension fund will massively switch its holding of German bonds to UK bonds?

So it is in fact those with largest deficits, who are looking for new money, who are more at risk. That is why Japan has been able to "get away" with such crazy financing percentages for so long, as the debt is sold to its own population of savers.

Which governments face biggest market risks?

Dissappointed with this Robert. You start off talking about interconnctedness and then completely fail to see how trading nations are connected to each other.

It will only takes one to default and who it will be is irrelevant.

Then it's a race to the bottom, last to default is a rotten egg!

So basically the whole planet is a giant 'never never land' because we are all living on the never never.....I think it's time to start believing in fairies !

BTW to my last post - can we all pretend this whole banking unreal crisis mess never happened - and everyone starts with a 'fresh slate'?

Institutions, banking credit and casino banking and roaming gangs of traders started this, and still continue making money from computers and adrenaline only?

It might save billions in lawyer fees too, potentially? As it stands right now, the 'fake' financial economy is alive and vociferous and still operating on vapour? Prick the bubble and let's get real people's lives back, doing real things, and making real things and doing real jobs in our country and communities across UK and Europe please?

"The great banking crisis of 2007 to 2008 was a story of solvency fears generating a liquidity freeze - which in turn bankrupted Lehman Bros and would have killed off Northern Rock, Royal Bank of Scotland, HBOS and other big banks around the world had they not been rescued by taxpayers."

Come on Robert, you know that this isn't quite accurate. What happened is there was a solvency crisis which presented itself as a liquidity crisis (unless you're going to argue that NR's business plan was sustainable) - and that liquidity crisis was resolved by the taxpayer.

However the solvency crisis was merely 'moved' from banking to Government - hence the sovereign / currency crisis we're now facing.

"As I've banged on about for some time" - yeah, you don't want to say that Robert as some people will use that to accuse you of being citizen smith, or maybe a 'lone nutter' who is intent on single handedly bringing down the system. Remember how you warned the public about Northern Rock - well since then this has been manipulated into 'you caused it' and not the reckless and brainless actions of the board.

"For obvious reasons, investors' primary attention is focused on that gap between revenues and spending, the public-sector deficit, because insolvency is the inevitable consequence of a national debt that becomes too large to service."

Very good - now can you name any Capitalist nations who have been reducing their borrowing in the last 20 years? It seems clear that everyone is on a path to insolvency - it's just a case of who gets there first.
I mean why do you think all Capitalist countries crave growth? - it's because they have no other way to pay off their debts than to increase their income greater than their debt repayments - cutting public spending tends to be self-destructive and vastly unpopular - only the Tories think this isn't the case still. unhappy populations don't make for good growth.

"This is not some theoretical, academic risk. A quarterly poll published today by Bloomberg of investors and analysts shows that 73% of them believe that Greece will default on its debts"

So does that mean 27% of investors are so desperately 'in' that they stubbornly 'believe' that Greece won't default - despite it being almost guaranteed now (the analysts are already working through the Brady bond model) - no wonder I find it hard going on this blog - some people have completely clouded their view on reality with their own delusion of self interest.

"But there is that crucial structural difference between Japan and Europe which allows the Japanese government to borrow these astonishing sums: Japanese individuals save far more than we do, and lend their money to the state."

Ah at last - some recognition for aggregate debt - I kept trying to get Stephanie to look at it but she seems blind to it. Whilst the Japanese savings attitude is commendable - it's totally unsustainable. It's also very prone to a strengthening of the yen - which would be disasterous as Japanese 'savers' are dependant on Japanese exports being competitive.


It's very dangerous to compare countries, simply because they're vastly different. The only commonality amongst them is that they are all swimming in debt.

....and that's the bit which remains ignored. If we suppose our salvation will be in exports - then who is going to buy our stuff?
A lot of hope is pinned on the Chinese, but there is no reason why they should turn into 'superconsumers' in a relatively short space of time. Don't forget the 'wealth' in China is centralised - so there is a lot more control about the use of it. In the UK we have to hope that 'buy British' appeals to the consumer, even if it's more expensive - no such problem in China, the state buys what it wants, from where it wants - it has become the world's kingmaker.
The rest of the world is in debt - and is trying to repair their balance sheets through increased exports - so we have a 'market place' where everyone is trying to sell and only 1 possible buyer - now what does market theory tell us about that situation??

At least Robert's starting to get the idea - they're all going broke and no amount of Government 'intervention or invention' will make any difference.

...as for Ireland in a better position? - well they haven't moved out of recession - in fact they must be in a 'technical depression' by now - so despite their better debt position - they're not going to have any income for a while.

Which is better, long term unemployed with a short mortgage, or short term unemployed with a huge mortgage? - or maybe they're just as bad as each other...

Fascinating back of the fag packet analysis Robert. Is that why the pound has suddenly gone up against the dollar and euro this lunchtime? Keep it up.

2. At 1:06pm on 09 Jun 2010, DebtJuggler wrote:

"P.S. For those who want to scratch beneath the surface of our current predicament, yesterday's Keiser Report with Michael Hudson is worth 25 minutes out of anyone's day:"

Anyone who can watch Max Keiser and not realise how corrupt the system is must already be dead.
I shall go find it right now....

Still, lets just stick him in the 'nut job' category with myself, Celente, Plamski, yourself - in fact anyone who doesn't proclaim "the king has a fine robe on"

Very nice of you to revise the history of the criminal activties of the bankers. Your economic lesson failed to address the process whereby the banks created demand by over-valuing the products they were providing the loans to secure. The banks also did not have the assets to cover the loans they were making. This was not an economic process but rather a collusion on the part of the banks to create a bubble in the housing market that provided the profits with up-front fees and bonuses with the inevitable failure at a later point in time. The problem with all of the fixes for the matter is that no one will admit to the basic processes that caused the problems. Both the political process and the banking processes were interlocked and yet neither takes responsbility or is even willing to admit their responsbility for the outcome. As the final payer for all this is the taxpayer the economic models for payment or repayment do not take into account the bad debt from the banks that the governments assumed with no responsbility on the part of the banks to contribute to the resolution of these bad debts. In most bankruptcies the judgement includes an attactment to future income yet for the banks the governments have made no such requirements and simply assumed that the taxpayer should pay for the sins of the bankers. This is nothing more than a reflection of the unethical conditions that define both government and banking. This is an issue of fairness and accountability and not a technical financial matter. 2008 will eventually be seen as the starting point for a restructing of governments, either with the admission that government is simply a corporate state or government as the representative of the people against the tendencies of power to corrupt and big businees to abuse.

Robert,
Please define "default".

Inflation at over 5%

Currency devaluation of 25%

Looks like we have already defaulted to me.

3. At 1:23pm on 09 Jun 2010, corum-populo-2010

That's the beauty of this situation - who owes who what anymore? - they have created a cycle of lending which serves no constructive purpose - but if it stops - the whole thing will collapse. It's a facade of growth, but underneath it's a creaking pyramid scheme.

Question: Which governments face biggest market risks?
Answer: Any who listen to unregulated Credit Rating Agencies

By the way, anyone know the qualification for being an employee of a Credit Rating Agency?
Busker perhaps? Unemployed former govt employee? Former Labour minister?
former Bank employee maybe?

Seriously Robert, why don't governments unilaterally gang up on the banks and print enough cash to clear their (govt) debts?
What could the banks do about it, if they did?
Would the world end? - Nope, just more cash swimming about to be earned and spent.

6. At 1:34pm on 09 Jun 2010, jonearle wrote:

"Masses of the bonds are held by pension funds of people in that country. When those bonds mature, it is quite likely that the majority of the cash will then be re-invested in new bonds from that country. For example, do you really think that a German pension fund will massively switch its holding of German bonds to UK bonds"

If the ratings change - then pension fund mandates will enforce this. It's not about choice, if you're running a 'A grade' fund you have to get rid of your non-A grade holdings - even if they were A-grade when you first bought them.
...which is why the Greek downgrade caused a lot of bond selling - a collapse only stemmed by the ECB buying them instead.

"So it is in fact those with largest deficits, who are looking for new money, who are more at risk. That is why Japan has been able to "get away" with such crazy financing percentages for so long, as the debt is sold to its own population of savers."

...but that has come to a end, the 'new generation' of Japanese are not savers - they are spenders like us - the only difference Japan's model shows is it was able to put off the inevitable for longer than we will be able to.

3. At 1:23pm on 09 Jun 2010, corum-populo-2010 wrote:
So are investors banks - or are banks investors? The IMF funded Romania, Hungary and Bulgaria - yet those countries want more funding from EU because they can't repay the IMF. Yet the IMF are funded by everyone?
-------------------------

Dear corum-populo-2010,

The IMF hasn't funded Bulgaria since it became an EU member, please correct your post.

If nothing else, Bulgaria has had one of the lowest budget deficits in the EU. The deficit is growing now as the economy is still in recession but it's still around 5%.

So is not about a countries ability to repay debt so much as its ability to create wealth that is at the heart of this matter.
Hmmm. Now where did the UK put its wealth creating manufacturing ability? Oh yes that’s right, we destroyed it to make way for the service industry which is about to be pounded by 20% - 25% cuts.
If we use the above as an indication of a countries ability to repay debt instead of its percentage of GDP, then things begin to make sense, giving us a much clearer picture of those countries heading for a debt meltdown.
The UK is lucky in that large debt repayment is not up for some years to come, thus allowing UK manufacturing to gear up and start employing all the soon to be sacked/redundant public sector workers. So, with a deft slight of hand, office workers will become manufacturing workers and hey preston, sorry, hey presto, wealth starts to be created.
At this point it should be noted that take home pay will be an issue for many millions of people in the UK, but there again after the austerity years to come it will look and feel like the good times all over again.

10. At 1:48pm on 09 Jun 2010, writingsonthewall wrote:
"The great banking crisis of 2007 to 2008 was a story of solvency fears generating a liquidity freeze - which in turn bankrupted Lehman Bros and would have killed off Northern Rock, Royal Bank of Scotland, HBOS and other big banks around the world had they not been rescued by taxpayers."

Come on Robert, you know that this isn't quite accurate. What happened is there was a solvency crisis which presented itself as a liquidity crisis (unless you're going to argue that NR's business plan was sustainable) - and that liquidity crisis was resolved by the taxpayer.


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No! Come on WotW! It is highly likely that NR was not just solvent but able to meet normal claims for funds in 2007. It was an unprecedented number of savers seeking withdrawals over a few days that gave NR a short-term liquidity problem.

"But there is that crucial structural difference between Japan and Europe which allows the Japanese government to borrow these astonishing sums: Japanese individuals save far more than we do, and lend their money to the state".

Robert, I don't think they do nowadays - Japan is not a nation of savers, it is a nation of FORMER savers. When this penny drops, the Yen could be in big trouble.

This comment was removed because the moderators found it broke the house rules. Explain.

I would make 2 comments:

1. It is not in anyones interest to see countries default. If there was a concerted effort by the Eurozone to bundle their loans (alongside adequate action to remove some of the excesses of certain countries)and insist upon reasonable rates then the markets would have to respond and I think positively. The threat to the market is a default on a massive scale which would bankrupt some of the funds - the risk is then shared a bit more fairly.
2. I am more than happy to lend my savings to the government at current bond rates - heck of a lot better than the Buiding Society. Why not use one of the nationalised banks as a national loan vehicle or even a national bank - more than happy to put my bank account outwith the commercial banks!

#19

'The UK is lucky in that large debt repayment is not up for some years to come...'

Whilst this is true, problems elsewhere are not good news for us either.

Behind every reckless borrower, there is a reckless lender.

RBS has loaned a lot to Dubai and Greece.

If you think the world is in trouble now, consider: trillions of dollars of bank and corporate debt. Once you get that picture, remember these trillions are coming due over the next three years. Then add: this will push interest rates higher because potential borrowers will be competing.
Dig this: Banks that have to refinance debt will be competing with a huge wave of government debt. (Banks face nearly $5 trillion in debt coming due over the next three years.)
Credit default swaps in Spain, Portugal and Greece have all traded down to junk (from top triple-A). Why? I’ve written about credit default swaps, but I just can’t seem to get the message across. Look at the “D”; that "D" stands for DEFAULT.
Chancellor Angela Markel has urged quick and decisive action to stop market speculation. I wonder which country(s) Markel was referring to?
Here’s a hint:
Germany shocked financial markets when she took unilateral action to ban
- naked short-selling of euro government bonds,
- related transactions in credit default swaps (CDS), and
- on Germany's 10 leading financial institutions.
Response: German bunds soared!
I suspect these German-type bans will become EU-standard operating procedures at G-20 (except in that very individualistic country called Britain).
But there will be impact on Britain nonetheless because most such German-banned trades originate from London and New York, mostly New York. Though Germany moved unilaterally, it’s this type of regulation that will put an end to speculation and it's this type of regulation that should be extended to the full broad range of credit default swaps – including the ones that very much helped to bring down Greece i.e. the ones that bet against Greek sovereignty. (In my opinion, this type of negative betting should be an international crime.)
As the best financial minds in the EU think and plan and implement the American fiscal policies (or lack thereof) march on. I believe that the Wall Street system is at the root of financial rot. If I was running a country, I would draw a firm line; I would refuse to deal with the United States on a financial basis until it brought down meaningful financial reforms, including getting rid of all speculative instruments. Next I would visit Canada with an eye to financial reform and how to implement same.

All these countries are in such a mess what we've already been told is only the tip of the iceberg. The deficit is not the debt and where all of that debt is is still to be discovered.

Because the biggest mistakes have already been made by unloading so much of the bank debt onto the national debt they are now in a catch 22 situation where they have to keep borrowing and the taxpayer keeps giving until all of the debt is known but by then who knows where we will all be.

At some point in this merry go round the money will run out and everyone will plunge into the big black hole of money printing and hyperinflation.

Perhaps all public services and governments should become limited companies declare themselves insolvent and start again with the best bits.

20. At 2:17pm on 09 Jun 2010, Up2snuff wrote:

"No! Come on WotW! It is highly likely that NR was not just solvent but able to meet normal claims for funds in 2007. It was an unprecedented number of savers seeking withdrawals over a few days that gave NR a short-term liquidity problem."

Check your facts - NR had already gone to the BoE for emergency funding - which was the story Robert broke - which then led to the withdrawls.

Once you've gone to the 'lender of last resort' - then you're bankrupt - that's why they call it 'last resort'.

...or how long do you think NR could have survived with their business plan down the tubes due to the LIBOR rate rising?

If NR hadn't of fallen then the Government would not have dropped rates and injected liquidity into the system. If NR were struggling at 5% LIBOR - how long would they last at 6%, or 8% - and should the BoE keep quietly lending to them without us knowing?

The 'liquidity' crisis NR faced is the same 'liquidity' crisis Greece is facing - it's insolvency.

I get fed up reading this drivel Bobby; factually all correct I presume, but dancing around the problem as ever. This is not the time for the BBC to describe things in the abstract, it is well past the time that you called a spade a bl***y shovel.
15% of our GDP just to pay the INTEREST is absolutely catastrophic, and you should be condemning without mercy, any UK Govt. who has allowed this to happen. (Yes Gordo, you)

The only people who are going to pay for this stupidity are the taxpayers and their grandchildren, and it was not our fault. For those that say no-one forced us to borrow more, remember which Governments and BofE created the climate to encourage ridiculous leveraging in housing and credit card debt.

We are either going to be shafted by huge inflation, mullered by a wretched exchange rate, taxed to oblivion, or our savings and pensions vapourised. Basically no-one in the financial sector has paid any price yet, and doesn't plan to. All these currencies are going to be worthless, even the yuan and the dollar. Like a number of your posters have suggested, gold will be the last refuge, the only true non-counterfeit currency (just watch out for the tungsten eclairs).

What I would like to see is a detailed analysis of what exactly would happen if we let all these banks fail. Hank Paulson's TBTF 'Armageddon' scenario has never been properly debated -why don’t you start?

Giving them free money and fat commission on easy Bond sales for a couple of years hasn't helped at all. They have stuffed their own pockets. Where is the argument about nationalising at least one major bank in each country.

Regards,

22. At 2:29pm on 09 Jun 2010, Caledonian Comment wrote:

"As Mervyn King said : "In the old days we'd have quietly helped a struggling bank and nobody would have been any wiser.""

...yes - and what else would go on without us being 'any the wiser'?

...and who would decide 'enough it enough' - when the 4th, 20th or 100th bank comes for aid?

What beggars belief is that nobody, not even global bond vigilantes, are talking sound accounting sense. Every national solvency calculation under discussion in these arguments involves comparing a debt or a financing flow to GDP. GDP is not cash because it is distorted by hedonic and imputational adjustment clap trap.

The correct way to view sovereign debt or financing is as a proportion of national government tax revenue. Of course governments might try to tax a bit more but generally it must be assumed that national treasurers are not fools and that national tax rates are already fine tuned close to the point of maximum revenue.

The reason that solvency calculations are not made on a such a straightforward basis is that virtually all governments (except a few odd places are like North Korea) are deeply and hopelessly insolvent in this view. Why do global investors put up with it? They feel there is nowhere else to go and wish also to bury their heads in the sand.

When we bear in mind that much national tax revenue is merely taking back tax from public servants gross pay then we can see that a good proportion of so called national tax cash flow is also accounting clap trap but it would at least be somewhere to start.

WOTW - I enjoy your posts but do sincerely hope you're wrong. Life is ok at the moment, ok I'm a debt slave and can cope with reduced public services - hell I'd even forgo my future crummy pension and free health service if it means we have to live within our means. The alternative of shooting people over a tin of beans doesn't sound like much fun. Let's face it, if the current corrupt and fraudulent capitalist system breaks down then it won't be replaced with economic nirvana until we've all had a good old war first.

15. At 1:52pm on 09 Jun 2010, writingsonthewall made an interesting observation:

'They have created a cycle of lending which serves no constructive purpose - but if it stops - the whole thing will collapse'

Is it therefore reasonable to conclude, that the majority of this debt is underpinned by the working Joe and Jane's as yet untested promise, that they are prepared to spend a life time as debt slaves servicing the interest demands of an industry that profits from creating money from nothing?

A compound debt trap, set by the wily, and walked into by the unwitting.

If you think this is bad - you wait until the IMF gets into some of the 'rogue states' and discovers how many of them have been 'doing a Greece' and hiding the true state of affairs - aided and abetted by banks of course.

Then the markets will get nervous (they don't like uncertainty) - and a nation will need to be sacrificed (default). Then those 'clever markets' will start hunting around to start looking for what the rest of us already know - the world is broke - the majority are in debt to the few, whether it be Government or private debt.

Control has been handed to people we don't know - whose motives are unclear - does that sounds like Democracy to you?

I have to say I don't really understand why commercial banks exist at all. Perhaps someone could explain why the government/central bank do not run the whole damn show with my local bank being a branch of the BoE.

#25 BluesBerry - Good shout!

#28 allmyfault - Gooda rant!

31. At 3:10pm on 09 Jun 2010, OffToOZ wrote:

"WOTW - I enjoy your posts but do sincerely hope you're wrong"

So do I - but hoping for something isn't going to make is happen. I hope it will be sunny on my wedding day - but if it isn't then I'll just have to deal with it.

"Life is ok at the moment, ok I'm a debt slave and can cope with reduced public services - hell I'd even forgo my future crummy pension and free health service if it means we have to live within our means."

...but it's not just your future, it the future generations who will also forgo - did they enjoy the boom years? Will the get Ipod's? - will they be thankful for what we leave them?

"The alternative of shooting people over a tin of beans doesn't sound like much fun. Let's face it, if the current corrupt and fraudulent capitalist system breaks down then it won't be replaced with economic nirvana until we've all had a good old war first."

...and that is what I fear the most - which is why I say it's important we put all our efforts into producing a generation which can find the alternatives for us - and not cut their education to pieces giving us no chance.
It's also why I say it's vital we stop arguing about the collapse of this system and start building the next system. Unfortunately there are too many people with vested interests (and loudspeakers) who insist this can be fixed.
It's just wasting time.....and making us less prepared for collapse.

I have entertained the possibility that 'this time' is not 'the time' - which means we have time to take action. However if by some miracle we get through this then many will happily take it as a sign of 'it's fixed' and continue as normal - this will be worse for us.

Revolution by considered and deliberate change, or revolution through anger.
Lets take the former as we know the latter always leads to bloodshed and often allows dictators to enter through the power vacumn.

9. At 1:42pm on 09 Jun 2010, corum-populo-2010

You know, I've been thinking about just that. Something like telling everyone that every penny they have is worthless, but fear not. We've got these new coins and each of you, pauper and king alike can all have 1000 of them to begin a new economy. No off you go and get on with a new life.

Wonder how that would play out - Monopoly?

Robert, it seems you are saying there is no need for the government to slash and burn then?

Guy along our street works in the housing benefit office. Well he did. After receiving his P45 a week ago, he's now on the dole and isn't looking like such a happy 30 something anymore. Someone else left to pretend they are surviving on 65 quid a week while the public bang on about lazy scroungers. He's not got a chance, has he?

34. At 3:37pm on 09 Jun 2010, Uphios wrote:

"I have to say I don't really understand why commercial banks exist at all. Perhaps someone could explain why the government/central bank do not run the whole damn show with my local bank being a branch of the BoE. "

...because that would be Communism and not corporatism - one is supported by the current state encumbants (and the last) - the other is not.

There is no need to privatise money lending or money creation - unless of course you want to hand power to the private sector - which is the ultimate aim.
The argument that "I don't want a beaurocrat deciding if I get my money for my small business or not" has been overtaken somewhat as I suspect many SME's are finding this problem occuring without a beaurocrat in sight!

There is an assumption that the private sector will make this process of money lending 'efficient' - but what is the price of that efficiency?

32. At 3:34pm on 09 Jun 2010, Dempster wrote:
15. At 1:52pm on 09 Jun 2010, writingsonthewall made an interesting observation:

'They have created a cycle of lending which serves no constructive purpose - but if it stops - the whole thing will collapse'

Is it therefore reasonable to conclude, that the majority of this debt is underpinned by the working Joe and Jane's as yet untested promise, that they are prepared to spend a life time as debt slaves servicing the interest demands of an industry that profits from creating money from nothing?


So the sooner everyone goes home to watch some carrots grow, the sunset etc for a while the sooner we bring this silly muggins' game to an end?

38. At 3:58pm on 09 Jun 2010, copperDolomite wrote:

"Guy along our street works in the housing benefit office. Well he did. After receiving his P45 a week ago, he's now on the dole and isn't looking like such a happy 30 something anymore. Someone else left to pretend they are surviving on 65 quid a week while the public bang on about lazy scroungers. He's not got a chance, has he?"

That's the real story here - it's all those "I'm alright jacks" who can't see the problems that don't affect them. Still, those will diminish in number because I haven't seen any figures to show there is a turnaround in unemployment.

The 'hidden waste' of Capitalism.

What I find wierd is this talk of markets as if they somehow represent anything of worth.

If you were going to make money on a bet (what all financial transactions are), you would surely look at depth at who you're lending to. You would know that Greece was dodgy, that the banks were over leveraged etc. If you didn't, you're a sucker, not a professional gambler.

Yet the markets oscillate in hysteria at the latest news that the garden is not all rosy. Even on news that the "clever" market is meant to have already factored!

The only conclusion I can draw is that a small number of powerful entities are driving the market for their own gains. They obviously don't care if people live or die as long as they get their instant profit. Along with them must be large numbers of suckers, who can only function with a viewpoint of minutes rather than the yearly viewpoint you need to actually "invest".

I imagine that these suckers are actually employed by banks, rather than individuals calling their stockbrokers to sell or buy, every 5 minutes. So once again the banks, desperate for easy money are distorting a system designed for another purpose.

I like the idea of low growth, and living within our means, if it means that the banks suffer. But somehow I think they will still be the boss of us...

Debt has to be repaid, or rolled over. When rolling over become impossible or too expensive the system shrinks and the debt has to be repaid. This started happening in 2008 and the situation is getting more serious by the day. Also debt cannot get cheaper therefore it is only going to get more expensive.

The inevitable numerical economic consequence is a depression - there is no alternative.

Now which country will be the first: the Japanese have been bumping along the rim of the financial precipice fro a decade or more with zero interest rates. (By the way zero interest rates are a very good indicator of forthcoming economic doom.) The UK is in an appallingly bad situation with zero interest rates and supporting a fundamentally unsound global banking system with far too many big banks fro a small insignificant country like the UK to support. The USA has resources, but a gigantic financial hole and zero interest rates.

The tragedy of the last two years is that we have spent hundreds of billions of pounds digging the hole deeper. The situation is terrifyingly bad worse than at any time in the history of the Bank of England - indeed five times worse that any time in the last 350 years (interest rates being one fifth of the previous minimum.)

The only way is up from here; up in interest rates; upping sticks for over-indebted private citizens and repaying mortgages; upping the bail-outs of more banks and building societies.

I will not go on about I told you so, but I did for the last decade and I know who to blame, and whose responsibility it is now to act.

Start increasing interest rates, let banks repossess property and sell it off and re-establish the value of money - that is to only way out. It will be hard. It will last twenty or more years. But It is a direct arithmetic consequence of the last three decades of policy and entirely predictable. We must also put up taxes by perhaps 20% and cut the pay of all public employees by 20%, but don't make them redundant. It is going to be terrible, but if we don't do it it will be taken out of our hands by the IMF and that will be much much worse.

They payments on the debt were delayed to forstall any revolution or overthrow of governments and more importantly, bankers beging dragged into the streets by anh angry public...it was about self-preservation by the bankers and they knew that the delayed payements would be acceptable to the politicians, their partners in the crime, and generate additional interest for the banks. The is a cycnical system that is based on greed and political stability that can be controlled to maximize profit and be under-written by taxpayers. When the bill becomes due these folks will al be gone and those dealing with it will say it was created by those in the past and so no one will be held accountable....justice delayed is justice denied.

36. At 3:48pm on 09 Jun 2010, writingsonthewall


Right, what we need to save the beans becoming targets is education. So, are you volunteering for Skeptics in the Pub? They are supposed to be Skeptical about everything, but so far it seems to be mainly pseudo-science debunking, libel law etc. So if you are up for it get yourself in touch with them and start preparing an evidence based presentation.

At least this government has started out positively: It's cancelled dumb 'white elephant' projects such as the third runway and ID cards
Massive more spending cuts of that nature to come... Let's hope!

We're benefiting from the fear currently: gilt yields are lower than much of the time that QE was in operation.

The downfall of society will be the lies - the lies to each other and the lies to oneself.

Governments have lied about their finances
Banks have lied about their liabilities
People have lied about their debts
Politicians have lied about their expenses

Any system of exchange must be built on trust - parties who do not trust each other find it hard to trade with each other. Even the free market principles require participants to be 'uncoersed' for the system to work.

There is no accountability whatsoever - so why will the next generation be any different.
This week we got a 'lesson in lying' which says if you're big and rich you can lie all you want and get away with it.

"BP initially estimated that the wellhead was leaking 1,000 barrels (42,000 US gallons; 160,000 litres) a day"

https://www.cbc.ca/world/story/2010/05/02/www.cbc.ca/m/rich/world/story/2010/05/07/www.cbc.ca/m/rich/world/story/2010/04/24/deepwater-horizon-oil-rig-leaking.html

...and this weekend they claimed their new cap is capturing 15,000 barrels a day - quite amazing for a leak only producing 1000 barrels a day.

https://af.reuters.com/article/energyOilNews/idAFN0914437420100609

...and why the confusion about the flow?

"BP has resisted entreaties from scientists that they be allowed to use sophisticated instruments at the ocean floor that would give a far more accurate picture of how much oil is really gushing from the well.

“The answer is no to that,” a BP spokesman, Tom Mueller, said on Saturday. “We’re not going to take any extra efforts now to calculate flow there at this point. It’s not relevant to the response effort, and it might even detract from the response effort.” "

https://www.nytimes.com/2010/05/16/us/16oil.html

...and not a word said about it - they have misled the public and the authorities and yet nobody bats an eyelid. Obama gets a little angry - but that's just to impress his voters - I doubt there is any real anger there.

With that as an example - what hope is there for an 'honest and transparent' banking system, government or corporations?

No worries moderators - all claims backed up from other news sources. Unlike others - I am prevented from misleading the public - I am not a corporate giant with lawyers and I don't have a PR department.

The 'jumpiness' of markets is a reflection of the lies being uncovered and the mistrust it produces.

...now I'm sure there's a good bible story which relates to this phenomenon....

The revoltion obsessed WOTW wrote

Revolution by considered and deliberate change, or revolution through anger.
Lets take the former as we know the latter always leads to bloodshed and often allows dictators to enter through the power vacumn.

Or, not having a revolution at all

Great, that's settled then

I find it hilarious the way that some people try to pass all the blame for all this onto capitalism but it was mainly socialist governments, like ours, lobbied and threatened by trades unions to pay far than they could afford to the public sector that created this mess. There would have been a sovereign debt crisis anyway with or without the help of banks. The current problems facing Spain, Portugal and Greece had little to do with banks and everything to do with deceitful left and right wing political parties overstretching themselves.

And it makes no sense what Peston says about debt only being a problem if it is due in the next year or two. That is exactly what PIIGS leaders thought three or four years ago.

Correct RP.
The contradictions in your post e.g. perceived insolvency and liquidty, and the raising of finance, like in the USA indicates, not only that the numbers don't add up, but bankers/financiers/investors are taking quite different views.
Of course in the history of economics/accountancy/finance/business this is nothing new...but there is more Disorder* to come.

Money is no respecter of different persons. Different nations, have as you highlight, different ways of doing things.

Homogeneity or heterogenity. It's one way or another, along the rope.
I reckon if these present problems don't get solved quickly the EU will be in trouble. However we all have seen what happens when European nations squabble with each other and I think the consequences are too dire to contemplate. Future Economic hawks v doves.

The solution is simple, a return to cash values.

Unfortunately society thinks you can 'have it all' and 'the sooner the better'.

[*Still, Joy Division,

...these sensation barely interest me for another day,'']

just one question Robert - why are we still listening to the same people who didn't see this coming?

"Ben Bernanke said he was confident the US would avoid double-dip recession - despite woes in Europe and worries at home about jobs and the housing market. "

https://news.bbc.co.uk/1/hi/business/10277429.stm

Is this the same Ben Bernanke who didn't see the mortgage security market blowing up?
Is this the same Ben Bernanke who turned on the printing press because he simply didn't know what else to do?

Someone put it much better than I could.

"It is worth noting that in his capacity as a Federal Reserve Board governor from 2002 to 2005, chief economic adviser President Bush, and then Fed Chair since January of 2006, Bernanke never raised any concerns about the housing bubble and the threat it posed to the economy. Based on this history, readers may question Mr. Bernanke's ability to assess threats to economic stability."

...and yet they still get air time, they are still moving the markets with their statements and still being paid by the taxpayer for what must be at the very least the biggest cock-up in history.

This isn't a Ben Bernanke problem - it's an endemic problem with the people we have promoted to the top. They are backward in their thinking and have no initiative or understanding of the beast they claim to control.

Have we become so desperate we are forced to listen to failures?

Lets listen to people who haven't got it wrong so far shall we?

https://www.trendsresearch.com/forecast.html

Lots of money floating around, taken from the citizens under threat of imprisonment and passed from one faceless entity to another. The lucky few get to siphon off a small percentage of a monumental sum as if goes past. The rest of us are expected to work as if we were slaves to keep funding it all.

The sooner people adopt a simpler lifestyle and stop struggling to keep up with the Joneses the sooner it will all end and we can be free again.

No country should ever become a solvency risk as each one has massive physical assets. I dont understand why each one does not settle the tab by borrowing against the assets and repaying over 10/20 years.

Of course spending reforms should follow,,,, its just like a consolidation loan really.

All I keep hearing is borrow this amount to finance that or get into debt to pay for this. This is the same for business and personal finance.
Whatever happened to saving for an item until you could afford to buy it
whether it was new manufacturing machine or pedal cycle. I`m obviously way out of date. (but no debt whatsoever)

Cut everyone's wealth and incomes by 25%. Drive out the idle rich for ever. Regulate against greed, cheating and corruption, break up the banks, keep speculators out of the homes market, pay off our debts and don't get into this mess again.

Excellent further analysis, Robert, so thanks for that (......although I'm a bit disturbed that Belgium does not figure in your final little list at all. Do we take this to mean you not count the land of Tintin and moules frites as a country? If so, I think we should be told!)

Yes, it's kind of becoming clear that the two key questions that will determine the degree to which a countries debt will be downgraded are not 'what is the deficit this year?' and 'what is total indebtedness?', but more:

- can you believe the figures? (or alternatively, has this countries government been continually deluding itself and/or others about its position?...... Obviously governments that have done deals with the Great Vampire Squid to hide debt are not going to look good here, and deserve to be hammered, probably first given their privileged information by the very same Squid of course!).

and secondly:

- is there likely to be much civil strife when the cuts hit? (or alternatively, has the country demonstrated any recent history of being able to reduce government spending levels without riots in the streets?)

In this context the UK and Japan look OK I guess, while France does indeed look less secure.

Evening Robert,
nice explanation from your point of view of the impending Government defaults.
Would you project your argument a little further?
If one EU country defaults (doesn't matter which one) then the whole connected chain snaps (weakest link and all that). If EuroLand is seen to be at risk of default then the USA collapses and China holds a great deal of worthless paper.
With the latest decision by the USA (via the UN of course) to destabilise the oil market (Iran) I predict the stock markets in the US will collapse again with no prospect of a rescue this time because they have already mortgaged their future.
Price of Gold is increasing daily which is a symptom that some people fear currencies of all denominations will lose most of their value.
Every government has dismissed the double dip possibility, well I have news for them, by the end of this year we will be in a worldwide depression.
I hope all of the bloggers can point out how wrong I was in 6 months time because I fear for the likely consequences.
Hold on to your hats.....

55. At 5:36pm on 09 Jun 2010, dnick wrote:
All I keep hearing is borrow this amount to finance that or get into debt to pay for this. This is the same for business and personal finance.
Whatever happened to saving for an item until you could afford to buy it
whether it was new manufacturing machine or pedal cycle. I`m obviously way out of date. (but no debt whatsoever)
-----------------------------------------
You're obviously in goo dnick, dnick! Me, too. And so are lots of others. A Modern Urban Myth suggests that we all have a share of 1.5 trillion in personal debt but it ain't so. It is worrying though, who does have it? If you an' me are 0, then someone else is 3xaverage. And I know others who are 0 ... . So that someone else is 4x, 5x, perhaps a 6x average debtor. Whhooooo. Really scary!

So who?

Let's be careful out there, tomorrow ...

If its not obvious to anybody with half a brain that virtually ALL OF THE WESTERN economies are out of cash and struggling to recover from the financial melt down caused by fractional reserve banking.
Every western bank has off loaded the debt on to the taxpayer in there respective countries. The banks are clawing back cash by deliberately holding interest rates high on mortgages, credit cards, overdrafts.
And nobody is asking the questions :-
1) Why are credit card companies charging 19-25%?
2) Why are mortgages still being charged at 5-7%?
3) Why are overdrafts still being charged at 19-28%?
When the bank base rates is at 1%, it glorified extortion and people should be up in arms or better still with holding payments. Then they will charge you even more interest!
Like the house of cards it will only take one bank to bring the whole lot to its knees, globalization has a lot to answer for.Governments need to regulate interest rates being charged or better still Nationalize the lot of them.
The banks created this mess but its ordinary people losing there jobs and homes in ever increasing numbers! A double dip is inevitable now while ever politicians cover the various banks and totally ignore the misery of the electorate.

56. At 5:52pm on 09 Jun 2010, PacketRat wrote:

"Cut everyone's wealth and incomes by 25%."

It's called deflation and we will be further into the doodoo if we do!

"Drive out the idle rich for ever."

Why, what have they done except spend and be idle?

"Regulate against greed, cheating and corruption, break up the banks, keep speculators out of the homes market,"

You mean create laws against human nature?

"pay off our debts and don't get into this mess again."

Agreed. I thought this is what the Coalition are going to do. However not get into this mess again - a Russian Economist of the 19th Century called Kondratieff speculated we would be in the doodoo every 70 years or so. So batten down the hatches when we reach 2077 - I won't be here unless they find the elixir of life.

Even the various governments are broke !
Who can they pass the debt on to?, they tried the ordinary general public.
But they have virtually thrown the towel in too!, throw the house keys back to the lender and hand the car back to the finance company.
May be then they will get the message that they have destroyed the goose that laid the golden egg! Expect to see more bank, business and personal defaults.
Everybody is trying to pass the hot potato around banks - governments - to ordinary people etc. Its too far gone now the crash is only a matter of weeks away. Civil unrest is already breaking out as the public sector bears the brunt of the financial whizz kids screw up.

# 43. At 4:31pm on 09 Jun 2010, John_from_Hendon wrote:

"Start increasing interest rates, let banks repossess property and sell it off and re-establish the value of money - that is to only way out. It will be hard. It will last twenty or more years. But It is a direct arithmetic consequence of the last three decades of policy and entirely predictable. We must also put up taxes by perhaps 20% and cut the pay of all public employees by 20%, but don't make them redundant. It is going to be terrible, but if we don't do it it will be taken out of our hands by the IMF and that will be much much worse."


Yaaaaawwwwwn.

I suppose the people will simply accept being run out of town into the empty wilderness of poverty and social injustice. Individually we can do nothing but when millions are on the scrapheap there is a collective to be frearful of.

To quote(ish) someone in the know "When people lose everything and have nothing else to lose, they lose it!"

What many forget about personal debt is it was/is positively encouraged, how else would this pitifully bankrupt country of ours have existed for the last twenty years without debt, debt, debt? The populace played by the rules, they did what was required of them, they enslaved themselves in debt and consumed, successive governments wouldn't have had it any other way. Now the rules have changed and we're told, "Hey what were you doing borrowing all that dosh, very irresponsible of you, don't you know its caused a global crash. Now you're going to suffer. What, me suffer as well? Hell no I'll be OK I'm a banker/politician/maket trader/rating agency (delete as appropriate) I'm above the law and too big to fail"

I must commend to the house the idea of slashing civil service pay by 20%, imagine the tax loss on 6 million civil servant pay cuts as opposed to 700,000 redundancies. One off redundacy hit or years of tax revenue loss, thought about that one eh John? Oh silly me it's arithmetic, so when the revenue goes down even further with the ensuing unemployment caused by the reduced cash in the economy what then a further 10% pay cut. Maybe eventually civil servants will pay our wonderful private sector overlords to go to work, perhaps we could set up a direct debit.

Oh and John, money has a value - it's zero, naff all, zilch, live with it, it's going to be like this for some time, it's part of the new rules of the game, now we're all enslaved with debt they make the debt unpayable by paying us worthless coins, inflate resource prices and charge absurd interest out of thin air. You're not getting it are you John, this is how they want it, stop writing to Merv or repeating your ancient diatribe get off your backside and do something about it, I have.

#60. At 8:19pm on 09 Jun 2010, KeithRodgers wrote:

"When the bank base rates is at 1%, it glorified extortion and people should be up in arms or better still with holding payments. Then they will charge you even more interest!"

There is a growing movement advocating mass withholding of loan payments but there needs to be sufficient numbers to have the desired effect. The idea is to clog up the default system i.e. simply have too many default loans to be processed. After all if every single debtor simply stopped paying they couldn't repossess us all could they. The biggest stumbling block is trust amongst protesters, do they trust every one else to go through with it or would there be many false promises leaving few enough for the system to cope with. Additionally, the idea is to spend the money not used to pay loans so it can't be recovered from bank deposits and keeps the economy afloat. In effect public sponsored QE and irresponsibility in reverse. How would the banks like a dose of their own medicine.

You see collectively we have the power, unfortunately most are embroiled in the safe haven of conformity and are afraid to exercise their right of protest.

This has now become a game of pass the debt so that whoever holds it when the music stops has to default.

This is quite pointless and downright dangerous for everyone.

Might I suggest that the governments of the world turn the tables by establishing who owes what to whom so that some of the debt can be eliminated by mutual cancellations.

I do not think there is enough money in all the world to pay all these debts so perhaps we should be devising some method of write-down and write-off. Debt jubillees also need to be on the table.

There are better ways of resolving this crisis that just sitting around hoping the next guy gets it. This gives the banks too much leverage over the rest of us despite the fact that we saved their bacon. We cannot go on living in fear.

64

There is also the possibility, that many just don't agree with you as well

48,

Another great post by WOTW as an observation that I had already made. Trust, that's a BIG word nowadays, if you can find it!

Pity I can't email WOTW as I have some questions ;-)

64, That's jacks army unfortunately, great idea btw - Count me in!

The word is DENIAL. The BoE is in denial as they are concerned about deflation while all the data indicates inflation is rising day by day (the current offcial inflation rate stands at 3.7% vs 2% target rate). The BoE believes growth can be achieved by printing money and setting near zero interest rates, while all the economic data indicates growth is nearly stalled. The BoE believes devaluing the Pound would help exports, but the data indicates exports are falling due to high import cost of raw materials. So it seems most likely that the current policies are not working. Shouldn't they change? Yes, Unless Perception is obscured.

With the G20 conference coming up this month, how about posting some league tables showing all 20 countries? Not just a selection of countries.

You could start with the statistics in this blog and make comments on the best and the worst.

In following blogs give other stats like unemployment, growth next year, budget deficit %, etc culminating with a composite overall rating for each country in the "final" blog

69. At 9:45pm on 09 Jun 2010, sammy wrote:
The word is DENIAL. The BoE is in denial as they are concerned about deflation while all the data indicates inflation is rising day by day (the current offcial inflation rate stands at 3.7% vs 2% target rate). The BoE believes growth can be achieved by printing money and setting near zero interest rates, while all the economic data indicates growth is nearly stalled. The BoE believes devaluing the Pound would help exports, but the data indicates exports are falling due to high import cost of raw materials. So it seems most likely that the current policies are not working. Shouldn't they change? Yes, Unless Perception is obscured.

This has been copied from a recent post by someone else, word for word

BE ORIGINAL

@ 34. At 3:37pm on 09 Jun 2010, Uphios wrote:

> I have to say I don't really understand why
> commercial banks exist at all.

You know, there is hope for you, Uphios. You are
capable of realistic and realisable ideas. Why not
join the cause of reason over greed? Don't worry - we
won't confiscate your takings.

#66. At 9:34pm on 09 Jun 2010, Kevinb wrote:

"64

There is also the possibility, that many just don't agree with you as well"

This is very true and I have no problem with that, but you'll be surprised how many do. Debt slaves are starting to crave emancipation Kev and they're not hard to persaude they have the moral high ground if they're likely to be forced into default anyway.

I would also point out that the policies taking shape go far deeper than just debt protest but I can't go into that on here because if it happens it will begin with very discreet manouvering, however I can say it's all non-violent and will be jolly effective old chap.

Robert

Very interesting but you offer no solutions:-

So we all now know that the fall of the Northern Rock, Lehmans, Bear stearns RBS, HBOS etc was due to being over-indebted, without enough capital cushion. The fear of collapse travelled around the circuit from bank to bank. What Robert is telling us that this is the likely outcome in pretty short time for the indebted governments in his list.

So what is the solution?

We have to save in our domestic economies and put the money into domestic Government bonds.

But why should we do this when the taxman takes a minimum of 20 % and perhaps 50% of the interest, and then inflation takes the rest?

I would love to be patriotic but self interest inclines me to by Gold sovereigns and to stash them under the bed. (No CGT on sovereigns as they are legal tender). I hasten to add that the rise in value is guaranteed if inflation is the solution to unpayable overdrafts.

What we need is a new policy whereby the tax rate on savings income is a real incentive to do it instead of to not do it.

Your thoughts please.

Does this not show most government borrowing is dishonest. When they borrow, they say we will pay interest and at maturity repay the capital. The bond does not say we will repay if somebody will lend us the wherewithal, and otherwise we'll think of some other arrangement that doesn't involve immediate payment. Why do the lenders tolerate it?

69,

Inflation target is just that, a target, it will be reset when the EU and the rest start the printing presses ;-)

And they will be running, night and day.....

73

One of the things I support is peaceful protest, even if like free speech, I do not agree with the sentiment

Why is there such concern about 'The Markets'.

Markets and market makers make heir money 'on the turn' and by futures gambles; volatile markets equal high turnover equals good earnings for Golden Sacks et al. Volatility is in their interests.

So consumer/banking debt has now been transferred into the realms of sovereign debt (pass the parcel!!). Ratings agencies now juggle with government debt instead of offloading 'AAA' rated US sub prime mortgages on 'The Markets'.

Europe/USA cannot meet their liabilities/repayments for sovereign debt to the Chinese/Arab governments without unrealistic growth projections. Meanwhile 'The Markets'/market makers continue to make their money 'on the turn'.

Any ideas on the new world order.

Watch this space!!

#75. At 10:04pm on 09 Jun 2010, JFM wrote:

"Does this not show most government borrowing is dishonest. When they borrow, they say we will pay interest and at maturity repay the capital. The bond does not say we will repay if somebody will lend us the wherewithal, and otherwise we'll think of some other arrangement that doesn't involve immediate payment. Why do the lenders tolerate it?"

You've partly answered your own question - interest, money for nothing, easy return on secure loans or big returns on risky loans knowing you'll get bailed out, until now perhaps.

The other part of the answer is - influence, leverage over your borrower, and its a country to boot. All good innit?

75,

The tail is wagging the dog, the Lenders do not need to tolerate it - They are responsible for 'it'.

I think you require to dig deeper for the truth my friend.

We saw that Greece had an interest rate at near 10% but got a German bank and IMF loan at a much lower rate (a few percent) to refinance its recent loan. Not every country can get an IMF loan (where does its money come from? - contribution from all counties, I guess) at such a favourable rate. Finance institutions and pension companies will want better interest rates to offset risks. So bonds prices become depressed and each successive country wanting to refinance its debts will have to increase the interest rate paid over the previous country. Is this world inflation with stagnating economies (=stagflation) coming down the track?

78, good post, care to expand on your idea of the new world order....?

61. At 8:49pm on 09 Jun 2010, dontmakeawave wrote:

56. At 5:52pm on 09 Jun 2010, PacketRat wrote:

"Cut everyone's wealth and incomes by 25%."

It's called deflation and we will be further into the doodoo if we do!
> Perhaps I got it wrong then. I thought we needed to deflate rapidly and start again.

"Drive out the idle rich for ever."

Why, what have they done except spend and be idle?
> Sorry, I don't mean all idle rich people. Only the tax dodgers and moaners, the ones who reckon the world owes them a living cos aunty vera died and left them a few bob. The Sir Greedies who claim they are working yet achieve nothing. The ones that threaten to leave and then don't. With them out of our hair we'll get some social mobility back and with it more productivity, innovation and wealth creation.

"Regulate against greed, cheating and corruption, break up the banks, keep speculators out of the homes market,"

You mean create laws against human nature?
> Yes, of course. What's the point of making laws forbidding things we are *not* inclined to do? Strange you should question it. Working people have a pretty strong perception of greed etc. Stephanie Flanders for example posed "Is there a difference between greed and self interest?" without offering an answering. For those of us who haven't been to Harvard its a pretty damn stupid question.

"pay off our debts and don't get into this mess again."

Agreed. I thought this is what the Coalition are going to do. However not get into this mess again - a Russian Economist of the 19th Century called Kondratieff speculated we would be in the doodoo every 70 years or so. So batten down the hatches when we reach 2077 - I won't be here unless they find the elixir of life.

> Agreed.
> How about this: "and don't get into this mess again *on our watch*"?
> But how do we do that without savaging our wages and wealth?
> As for Kondratieff, I don't suppose he had in mind world overpopulation and climate change. Our kids have enough to do without having to support the nouveau aristocracy.

33. At 3:35pm on 09 Jun 2010, writingsonthewall

Now you know and I know very well what their motives are: dominance of the markets, both financially and politically.

48. At 4:56pm on 09 Jun 2010, writingsonthewall

We all know that the kit needed to fix a burst pipe about the size of the pipe under your kitchen sink is a bit different from the kit needed to fit something with a diameter of say a metre.... no we don't need to know, just as the marketing experts at BP say - where's that old Nat Phil 'O school book, did that have any fluid mechanics in it...

43. At 4:31pm on 09 Jun 2010, John_from_Hendon

Krugman has a Nobel in Economics. He disagrees with you. Take a look at what he has published today in the New York Times.

Somebody explain, please!

Question:
1. The sovereign debt crisis is not, say, Greece's problem as it can simply say, sorry pal there's no money to repay your capital.
2. So it's the lenders problem.
3. If the lender is George Soros, then happy days, at least for everyone else.
4. But if the lender is a too-big-to-fail bank, then it's our problem.

So, it's the bankers again being stupid, right?
And, it's not related to the property bubble debacle. It's actually two colossally stupid separate crises caused by the bankers.

Is that it?

Convert debt into equity in the housing market.

87. At 11:14pm on 09 Jun 2010, PacketRat

Think the thing people would point out is that since Soros owns all the wheat, he can refuse to sell it to you if you don't keep in line by paying back the debt to his mate down the golf club.

#86. copperDolomite wrote:

"#43. John_from_Hendon

Krugman has a Nobel in Economics. He disagrees with you. Take a look at what he has published today in the New York Times.
"

Did he see the crash coming AND do anything about it - NO so he should be treated exactly like all other blind and daft economists as so much hot air. Time will tell who is right - but I did see the crash coming and why it came. You believe him if it comforts you - but if he disagrees with me he is unlikely to be right! The Nobel Prize for Economics is a badge of shame and a sign of complete intellectual failure! None of them spotted the express train of disaster therefore they are just ignorant of real economics!

#63. NorthSeaHalibut: sorry but it is you who are in denial and wrong - take action now or be destroyed!

And to KevinB I am not saying that you should be left to starve on the streets - We must build new affordable housing for you, but unless you repay your debts you cannot remain in your mortgaged home. That is the law, like it or not. That is the contract that you entered into and you must take the consequences of your own action.

"Investment Banks face OFT probe"

About b****y time too!

Enough said...................

#87. PacketRat wrote:

"(Sovereign debt crisis)..So, it's the bankers again being stupid, right?

And, it's not related to the property bubble debacle.

It's actually two colossally stupid separate crises caused by the bankers."

Yes, only partly, but the crises are related by the common theme of borrowing more than be repaid. Also the regulators knew that these bubbles were growing out of control for over a decade, but they did nothing - so they are also to blame as we pay them to manage such things and the failed catastrophically.

The bankers were supposed to be regulated and only did what they were allowed to do so not only the regualtors can be blamed but those behind the idea that there should be light regulation - Milton Friedman and his buddy Margaret Thatcher etc.

"We're all doomed", that was dead funny when pte Frazer said it in Dads Army in the bad old days of the 70s.

Its not funny at all now. :(

#52. writingsonthewall wrote:

"Ben Bernanke"... the guy who shared a study with Meryvn King at the 'renowned' economics institution Harvard.

Two duffers drowning us all in their slime!

Tarred quite reasonably with the same oily brush -- where are the feathers? And how long will it be before they are both run out of town?

I should really comment on my previous doomness.

House prices need to deflate by 60% to their true value, commercial property maybe more. You all know what this would do to the banks' balance sheets....

We need to bite the bullet.

26. At 3:03pm on 09 Jun 2010, virtualsilverlady wrote:
Perhaps all public services and governments should become limited companies declare themselves insolvent and start again with the best bits.

Yes. It is called Blackwater, free of regulations - like the Geneva convention!

89. At 11:48pm on 09 Jun 2010, copperDolomite wrote:

87. At 11:14pm on 09 Jun 2010, PacketRat

Think the thing people would point out is that since Soros owns all the wheat...

There's ways round that.
So far, so good!

"The alternative of shooting people over a tin of beans doesn't sound like much fun. Let's face it, if the current corrupt and fraudulent capitalist system breaks down then it won't be replaced with economic nirvana until we've all had a good old war first."

...and that is what I fear the most - which is why I say it's important we put all our efforts into producing a generation which can find the alternatives for us - and not cut their education to pieces giving us no chance.


Well, we've got the wars already. And it seems a really intelligent guy in the government is going around telling journalists that students are a drain on the tax payer (think he meant society, didn't he?) https://www.guardian.co.uk/education/2010/jun/09/david-willetts-students-tuition-fees?CMP=AFCYAH.

He seems to have been quite a burden himself - 'Willetts was educated at King Edward's School, Birmingham, and Christ Church, Oxford, where he studied Philosophy, Politics and Economics.' from wiki. Is this the bit where he announces lecturers and researchers should be the first to go for his 'Civic conservatism' that emphasises the virtue of volunteerism and ignores that idea that Tesco etc don't volunteer the food and other essential items on the shelves!

I mean, wasn't a degree in landscape gardening more useful for him! He could volunteer those skills up and down the cuntry and the ne'er do wells could dollop some gruel into his bowl as an act of charity - well what kind of life do we all think this fairy godmother, two brains is going to give all of us...

90. At 00:11am on 10 Jun 2010, John_from_Hendon

He gave a lecture at the LSE that is worth listening to - podcast available online.

I don't really understand the flight to Gold in the modern era.
Its basically a rare but not very useful metal that doesn't tarnish.
Its value, like cash, depends on the confidence of buyers and sellers and I can't see us going to back to it as a means of exchange, even after collapse in the confidence of the green stuff.

It does make me wonder what a world without money would be like.

I