This Recession And Banks

We are all aware I think of the central role played by banks in the financial mess we currently find ourselves in. It was a case of very stupid people being allowed to run banks, with greed as an overriding motive. This is common, as even children display this proclivity if not reined in by their parents. The role of parent to banks of course is supposed to be supplied by government agencies.

But let us think back. When the seeds were sown of this disaster the principal banking centres of the world had Clinton and Blair in government. Stupidity certainly breeds stupidity and here it was full blown and at the highest level. Clinton indeed kicked off the whole thing by insisting (in law no less) that banks give mortgages to people who couldn't afford them.

Banks then saw a need to 'hedge their bets' and bundled and sold on debts. Everyone had their eye on the profits and didn't consider the consequences. It really is that simple. Here, we also had the unstoppable Gordon Brown on a crusade of his own imagining. He used the liquidity the banks provided to borrow insanely and urged other people to do the same, by keeping money rates low. 'What happens when rates go up?' nobody asked.

Indeed, this also slipped Brown's mind. Either that or he simply didn't care and there is plenty of evidence that was the case. On top of this we had the communist experiment taking place in Europe, where to support a power grab, a single currency had been 'agreed' by 27 countries across Europe. The one size fits all imposition was a disaster waiting to happen. It completed the perfect storm of financial crisis.

But what has happened since? What is happening today? Well, banks are handing themselves handsome bonuses and pushing up interest rates and not loaning businesses money, all without any real complaint from Ministers. Quantitative Easing is pouring new money into banks and the 'rescue' of Greece is just money that the EU gives to banks that Greece owes money too.

Do you see the connection? No matter how grave the situation, no matter what you think should be done to get us out of the financial downturn. all that is actually happening is money is being channelled to banks. Something, reader is afoot and I don't know what. Clearly you and I are not party to it.

Consider. Tony Blair (or Gordon Brown) did one 'good thing' according to popular history and that is giving independence to the Bank of England. They didn't but hey, gingerbread houses don't exist either but there is a story. The Bank's sole 'job' was to keep interest rates low. A political objective then.

But in what way is printing money (Quantitative Easing) compatible with 'keeping interest rates low'? It is, naturally, a prime cause of inflation. But we are still doing it and by 'we' I mean the Bank of England, so what is going on? Why are politicians and the BoE ignoring this sacred directive and the political consequences of driving up inflation? It must be a pretty important reason and it isn't to help the economy.

I don't think it is a Right Wing conspiracy and I don't think it is driven by Jews as I'm sure the left would aver, I think in all honesty that it is because the politicians have given too much power to banks and now cannot rein them in. Frankenstein has created a monster. It is a time of national disaster and we need a Churchill, but what have we got? A Cameron and a Lord Haw-Haw (Nick Clegg).