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Financial System Continues Collapse - Opportunity For Optimism

Despite the euphoric reaction of the BBC as the results of the Greek election became clear, nothing changed in Europe this morning.


After an initial boost to the stock markets, the inevitable slide right back down again continued just as quickly as Spain’s cost of borrowing shot right back up.

The Gates Of Hell

The UK Column has been warning for years that unless some fairly specific action is taken, the utterly corrupt financial cartel which runs this planet would take us all right into hyper-inflationary hell. Well, here we are. We have arrived at the gates, and they aren’t pearly.

It is all so unnecessary. Our financial and economic problems could be solved so easily, but for the sheer cowardice of our elected representatives to stand up to the few that are running the country at the bidding of those with the purse strings.

As the Eurozone implodes under the weight of the never ending cycle of bailout, austerity and asset stripping, at last week’s Mansion House dinner here in the UK, Mervyn King and George Osborne launched their latest “failed before it has even begun” initiative to save the British economy.

Perhaps we should be grateful for small mercies - Marvyn King at least acknowledged that it is the insolvency of the banks that is the main issue here. In his Mansion House speech he said,

Where there are debtors who cannot afford to repay, there are creditors who will not be repaid … Until losses are recognised, and reflected in balance sheets, the current problems will drag on. An honest recognition of those losses would require a major recapitalisation of the European banking system.

Indeed.

King also, finally, admitted just how bad things actually are: “the authorities around the industrialised world have thrown everything bar the kitchen sink at the problem”, none of which worked.

His response? “Bolder action”.

And this is where it all begins to feel like “Groundhog Day”, because, surprise surprise, the bolder action is more “monetary easing”; more hyper-inflationary money printing, as if the debts can be paid by simply printing more and more.

In addition, King wants “to make clear that the Bank [of England], through its discount window and other facilities, will provide banks with whatever liquidity they require given the prospect of turbulence ahead.”

So, while King is clearly now admitting the facts that we at the UK Column have been reporting and commenting on for years now, King is clearly totally unwilling to do anything whatsoever to make things better. Quite the opposite.

Funding For Lending

The other, much publicised, string to the King and Osborne puppet show was the announcement of their bank lending plan, where they will give money to the banks for the sole purpose of lending it on to British businesses.

It has always staggered me how many times these people can announce the same policy, giving it a different name each time, for so-called economists and journalists get all gushy about it. Just what is the difference between this and so-called “credit easing” in practice?

What’s the good of lending taxpayers’ money to dying companies in a dying economy anyway? Is this a rational thing to do?

Perhaps Labour Has The Answer

Let’s not assume that Labour has any answers, either. Bilderberger Balls is just as much in the pocket of the bankers as Bilderberger Osborne. Sadly, there are no solutions coming from any of our front bench Parliamentarians, and so far at least, no backbenchers have had the guts to get themselves organised into any sort of pressure group.

But it’s not just our politicians who are living in cloud cuckoo land. Last week, the BBC was yet again “surprised” by some figures from the real economy - manufacturing figures, as usual.

Why, when they have such illustrious “experts” as Robert Peston to give them a clue, is the BBC surprised that UK manufacturing is in a state of collapse, when the government is doing absolutely nothing whatsoever to build it up? It has, after all, been the policy of successive British governments over the last forty or fifty years to systematically destroy our manufacturing base and replace it with shopping centres.

Fifty Years Ahead

I have been banging on about this economic collapse for nearly fifteen years now, both on and off the internet. The usual response from people went along the lines of “well, if you wait long enough, of course it will happen”.

This is one of those “I don’t want to think about it, so I’ll just discount it out of hand” responses, like calling someone “anti semitic” if they criticise Israeli policy, or “conspiracy theorist” if they dare to ask questions about a host of historical events.

But it was obvious to me that just about everyone had forgotten the most basic principles of real economics, and had fallen head over heels in love with the god, money.

As the nation’s infrastructure was systematically sold to private corporations, bent on creating “shareholder value” and ignoring future investment, it was absolutely clear that government had forgotten the word “posterity”.

But it was worse than that, because the government of Margaret Thatcher went out of its way to persuade us to drop any notion of the general welfare or the future, and to think only of ourselves; of today’s pleasure. “Loadsamoney!”

I enjoy reading books by James Fenimore Cooper. Aside from brilliant novels like “The Spy” and “The Bravo”, Cooper wrote extensively of pre-revolution American colonies. What is absolutely clear of those early colonists is that their first consideration was for the future.

Everything they did was for the future; for their children and grandchildren in the full knowledge, just as the person who plants an acorn, they would not, themselves, see the fruits of their labour.

We have forgotten to think in these terms, which is why, as the BBC keeps telling us, “no-one saw it coming”.

What’s The Answer?

It’s hard to imagine one, isn’t it? We are constantly bombarded with pessimism from a relentless political and mainstream media assault. We don’t talk ourselves into recession, we are talked into it by people who can only be described as kleptocrats. The artificial cycle of “boom and bust” has superimposed on it another cycle, where once in a hundred years, “they” asset strip the general population.

There is money to be made in a depression, you see. If you’re in the right place, at the right time, and if have the morality of a reptile.

But the answer is really very easy: put the banks in their place, and build our way out of it.

Can’t be done, you say?

Ask Iceland.

It Starts With Glass Steagall

I’m perhaps as bored of saying this, as you are of reading it, but I will continue to say it until it is a done deal.

Glass Steagall is the most efficient way to put the banks in their place. Instead of continually bailing out a bankrupt banking system, we protect people’s equity: their savings, their pensions, their homes, by requiring the banks to split into separate businesses.

The retail banks, which hold our savings, our pensions and the deeds to our homes, we protect.

The investment banks, which are the banking equivalent of Paddy Power, we leave to their own devices.

Massive Reinvestment In Basic Economic Infrastructure

Every economy needs infrastructure. Electricity, water, transportation, telecoms. For the last forty years, we haven’t invested in ours. We sold it all off, and permitted the new owners to asset strip it.

As a result, our water pipes leak, our power stations are end of life, our railways are so expensive it costs less to fly from London to Warsaw, than to take a train from London to Plymouth.

But this should be seen as an opportunity, rather than a disaster. There are several million jobs there. High quality, high tech, high skill jobs which will give our next generation a reason to get up in the morning.

It’s not enough, though, to just replace what we have with the same. We should be looking to the future; fifty to one hundred years in the future.

So we should be replacing our tired, old railways with Maglev. We should not only be looking to fix the leaky water pipes, but also at how we can develop our water systems so that no area of the country ever has shortages just because of a change of weather pattern. We should be developing the highest energy density power generation we possibly can. What is the economic benefit to giving hundreds of acres of land over to a 9th century technology which is at best 30% efficient, and simply can’t be used at the times it is most needed? We should be investing in nuclear fusion.

But There’s No Money!

Isn’t it fascinating how much money can be found to continue the bailout of the banks? It is time to put this notion that there is no money to bed, once and for all.

As we all must know by now, money is not real. It is a convenience. Whether or not there is any, is totally dependent on who is producing it.

Let me remind you of the quote from the Times, which Justin Walker included in his article, “The Case For A ‘Greenback’ Pound”, published in the last issue of this newspaper:

If that mischievous financial policy, which had its origin in the North American Republic, should become indurated down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and be without a debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedence in the history of the civilised governments of the world.

That “mischievous financial policy” is a system of national credit, a “Greenback” Pound.

Optimism

Things look dire, and they are. We are literally at the gates of hell, and it is only fear and pessimism which has brought us there.

Isn’t it time we put our politicians and banks in their place, and find within ourselves the optimism to imagine a bright future?

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