Thursday, October 02, 2008

Who provided and then removed the £625bn of credit ?

Robert Peston is starting to make sense to me about the current crisis over on his BBC blog here. ( There has been a lot of drivel produced by the BBC - worse of all the Panorama recently which was all about feelings and putting people on camera who had never realised interest rates change ).

His point is this:

    In 2001 UK bank loans and deposit roughly matched, there was no 'funding gap'.
    Since then UK banks have been raising money from money markets and wholesale funds, which has created the £635bn gap, which increasingly the bank of England is having to fund.


Mr Preston present a succinct argument that I recommend reading here.

But my question remains, as I have asked it before, who or what characterises the ultimate creditors who provided the £625bn and have now withheld it ?

Surely there can be only a few candidates in the world, specifically China and the Gulf Arabs/Saudi.

During the last oil crisis the surplus cash, which burned a hole in the OPEC countries pockets was lent to the third world, especially South America. It cause decades of misery and financial turbulence that still hasn't died down.

Is thats what happening to us now ?

Is this crisis an accident, or has it been planned ?

How responsible are the lenders of the £625bn, who have now taken much of the money back, leaving the citizens and tax payers of the west to be wiped out ?

How can the US be regarded as the worlds prime power when China, in effect, owns them ?

Are these such unreasonable questions ?

What is really worrying is that nothing like them is being asked by our politicians or the MSM. It makes you wonder if they don't already know the answer.

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