Friday, September 19, 2008

You have to wonder if the government and sterling isn't next

So the solution is going to be to buy up the bad debt - and give it to the tax payer, because the alternative is unthinkable ( or rather we do remember it from the 1930s).

But hold one - the US has a massive amount of debt, the UK's is really closer to Italy's than Labour have been honest enough to admit ( when Gordon's little off balance sheet tricks are taken into account and Northern Crock is added in ).

How long before the markets turn on the governments and their currencies ?


I also wonder who is being bailed out right now and who supplied the excess credit in the first place. Alistair Darling last night talked about foreign credit supplying the property market. Is it at least possible that this crisis could have been intended to reduce the West to a more manageable size by potential competitors ? To be sure the explanations I hear are only partial and now attempt to balance the whole situation seems to be made.

What's really going on ?

Update:

See Liam Halligan in the Sunday Telegraph "Financial crisis: Default by the US government is no longer unthinkable"

And on Mon 22 Sep we get "These are nightmarish figures that threaten a run on the pound and spending cuts of 1976 proportions." from the Daily Telegraph comment section here.

1 comment:

wildgoose said...

You're not the only one who's had that thought. China in particular looks very much to the long term.

Meanwhile, 20% of the UK economy is finance related. So despite Gordon Brown's claims, we are NOT best-placed to weather the current financial sh*t storm.

If there is a massive currency realignment then we have real problems. The real work is done by the people who actually manufacture the goods, not by those who hand over bits of paper promising to pay for them at some point. Sooner or later, (probably sooner), they will stop accepting Western paper and start trading more amongst each other.

And where will that leave us? England is now the most densely populated country in Europe. We need to import food to survive. What happens when the paper money we want to use to pay for that food isn't worth as much as it used to be?

Just what does it take to get this all through to the people at the top in their cosy Westminster bubble of reheated student politics?