The so-called credit crunch really began when the banks ran out of money and our Government bailed them out with money they did not have, money that they would borrow on top of all the money they already owe.
That’s fine, but if all that money is already sitting out there in the system and there are people or institutions anxiously waiting to lend it, why was there a problem in the first place?
More importantly, if the Bank of England is lending our money at the current bank rate, what interest will the Government have to pay those investors who are going to fund all their extra borrowing?
It seems to me that there might just be a bit of a “black hole” somewhere in Mr Brown’s strategy to save the world, because what I suspect is that in reality, more money has been lent than actually exists and the only way that can be solved is to print more. I think our experts call that inflation.
D G Roberts Wells
When we had the British Empire we used to keep our eye on the strength of the £pound, capital flows, VISIBLES(goods) and the Balance of Payments. . We didn’t rely so much on INVISIBLES like tourism, insurance and other services as we do now. . And of course the chancellor wouldn’t have been wearing an invisible suit of clothes as Gordon has for all these years, telling us we could all eat cake.
Charles Henry
I remember those days Charles. That’s when we were told we never had it so good, when the worker was down trodden and the bosses used to sack people for no reason at all. We had an empire where we ruled with an iron fist. Gorden Brown is doing a good job to get us out of this and of course Vince Cable is the best Lib Dem at the moment. At least Brown is doing something. Get real Charles the Tories still have their heads in the sand. I think I’ll stick by Brown and Darling, anything has got to be better than Cameron and smarmy Osbourne.
Jerry Jones, Dorset
But the Books always balanced Jerry, and there were plenty of jobs. . And an American Dollar was only worth ‘Five Bob’ (25p) then. Now a Dollar is worth 66p! . . ‘Oh those Americans are all so stupid’. . I bet they’re glad they didn’t have Gordon Brown and his invisible suit of clothes. . At least George Dubya kept his eye on the oil supply. . We have to go cap in-hand to Russia and France for all our energy supplies now. . You can’t make this sort of thing up Jerry!
Charles Henry
The world has changed Charles and you will have to change with it. I know Maggie is your hero, but she set to destroy the Unions and sold off everything she could. Remember retail price maintenance when the government kept an eye on prices. She got rid of that in one foul swoop. I’m surprised she didn’t sell off the Houses of Parliament. Where shall we start when we want to talk about destroying British industry. The Tories have a lot to answer for, and sitting on their backsides and doing nothing is the not the solution to the problems today. They laughed at his Gaff about “saving the world” but they have no answers except snide remarks and sneers. It all very well making clever little asides at Prime Ministers question time. What the people want is action, too late maybe, but it’s the best we’ve got. I’m willing to give the man a chance.
Jerry Jones, Dorset
Changed Jerry! . .What do you mean, Changed!? . . The end of Boom and Bust? . Gordon’s promised land when you wouldn’t ever have to work again and we could all live on cheap Chinese imports FOREVER has just exploded into a cloud of dust. . . The Money-Tree has died Jerry. . Property isn’t going to go on rising by 10% a year forever. . Welcome to the REAL world of WORK Jerry. . There isn’t a Tooth Fairy after all. . Boo Hoo.
Charles Henry
I’m sorry Charles but I don’t understand where you are coming from. Your little Maggie set all this off in the Eighties when she promised everyone would be equal and England was great. Thanks to her we have no industry which is English, we don’t own the water we drink, the electric and gas we use, we own some banks or part of them because of this government. Thank God she never got her hands on those. We have a housing shortage because the Tories froze the money. This country has a mess to clear up and I worked through your precious Maggie’s time and had two jobs to pay my mortgage when interest rates were 15%; so please don’t patronize me. The Tories have no answer. David Cameron is always saying “I have asked my Cabinet friends to go back and look at our policies” He said it at the Conservative conference and he said it this week. Now if the Tories had the answers why is he always asking them to look at policy? Quite simply they haven’t got any.
Jerry Jones, Dorset
So Jerry; when a burglar breaks into your home and steals all your savings, then comes back and knocks on your door saying he’s been round to all your neighbours for a loan for you, but it means you’ll have to give him all your credit cards and sign over your pension; you’ll say “Oh thank you very much mate; would you like the keys of my car also?”
Parents have been signing sureties for their children’s mortgages for generations. 99% of the time they were never called upon. . It was like an extra insurance for the Building Societies. . Not forgetting lending criteria was always more strict. . . What the Government should be doing now; as the Conservatives suggest, is for the the Government to give sureties to the Banks to get them all start lending again. . . It is the same principle as the ‘Just in Time’ stock-holding principle of large companies. . It would free up the Cash-Flow, increase everyone’s liquidity and decrease the need for such large cash holdings of the big lenders. . . This is not Rocket Science, just expedience in time of an emergency. . Proper lending criteria can return and the situation will improve.
Charles Henry
The government has told the banks to lend more money and that was part of the deal they struck. The banks are expected to lend to small businesses and home buyers. Northern Rock is beginning to, but the banks can’t have their cake and eat it too. The government may have to get tough with them. This isn’t all Gordon Brown’s fault as the Tories try to say. At least he is trying to do something. If the Tories want to have a chance of winning the next election get rid of Osbourne and bring back Clarke. At least he doesn’t sit on the front bench with a sneer on his face. The problem there is,is that he is Pro Europe and most of the Tories party members with any clout are not. And for God sake put Letwin back on the back benches. He was a liability before and still is. He made one speech as shadow chancellor in an election and was never heard of again. More’s the pity we have got to put up with him down here.
Jerry Jones, Dorset
I am sorry Jerry, but your understanding of good banking practice is as flawed as Gordon Brown’s. . We used to have the Gold Standard before currencies were allowed to float freely. . Modern currencies are by Fiat, government decree. . The Banks need sureties or they will continue to hoard currency.
Charles Henry
It’s not what happened in the past it’s how things are going to be done in the future. You have to move with the times. The banking world has shown that it can’t go on as it is. I’m not saying Brown has the answer to all our problems by any means. Time will tell Charles and i can see we are not going to agree on this. I will be the first to say i was wrong if things go t*ts up. Just take a trip around the old mining towns and villages and you will see that Maggie has to answer for. She ruined an industry that now some people say we need back. . Take care Charles.
Jerry Jones, Dorset
Jerry you are being rather selective now. . It was Arthur Scargill who tried to destroy democracy using miners to bring down the government. . I agree, all governments have made mistakes, but there have been many very large payments made to miners since. . I believe we all owe it to our children and our children’s children not to saddle them with interminable indebtedness and help them to find a sound footing for their security in their old age. . We can’t have our cake and eat it. Surely we can agree on that. . I will take care. . Thank you.
Charles Henry
Charles, you’re wasting your time trying to reason with Jerry. If the EU, Labour or Lib Dems said they were going to A-bomb us Mr Jones would support the idea, I think, going on his other letters.
You and I support a rich, free, independent and self governing nation as we were before that traitor Heath destroyed it all, but it seems others don’t. Sad, but a waste of time trying to reason with some of them.
Happy Christmas, Charles.
Greg Heathcliffe, Swindon
Happy Christmas to you also Greg. . Yvette Cooper, Chief Secretary to the Treasury said yesterday, “We have never had a policy of targeting the pound. Our policy has been to target inflation and that, I think, has been the right way. It has paid off over the last 10 or 11 years.” . .Well I believe until the Government accept they cannot divorce what is happening today from their handling of the economy over these last 10 or 11 years, our country will continue to suffer from their incompetence. . We need a change of mindset and an acceptance of the errors that were made. . Then we need a change of government. . There will be no sudden magic cure in my view. . We have to go ‘Back to Basics’ to coin a phrase. . Abandoning our economy to the Chairman of the Bank of England and the Monetary Committee, with the single lever of interest rates, was never going to be a viable way to control our economy in my view. . That’s why we have a Chancellor of the Exchequer.
Charles Henry