Pyramid Comment

This journal takes an alternative view on current affairs and other subjects. The approach is likely to be contentious and is arguably speculative. The content of any article is also a reminder of the status of those affairs at that date. All comments have been disabled. Any and all unsolicited or unauthorised links are absolutely disavowed.

Wednesday, April 23, 2008

Chancellor In Control

The current Chancellor of the Exchequer is Alistair Darling and examining his background provides little evidence of any assumed competence in financial affairs. Does Darling actually have any idea of what is happening in the very confusing global financial crisis? Bank inter-lending is apparently a practice that is not happening. The failure to lend to each other has the effect of keeping public borrowing rates up. This is convenient for banks that appear to have created the monstrous situation and is a wonderful justifiction to maintain high interest rates even when the Bank of England has opened the taps to pour in £50bn of liquidity. There's something seriously wrong with this logic unless it's the obvious conclusion that the situation is actively being engineered to maximise any payback. The inundation of information from all quarters about matters relating to the global financial crises does have the major benefit of adding to the confusion and masking the affairs that affect a great many people.

It is effectively a smokescreen
creating disinterest by overload

The incredible situation is taking shape that a bank (RBS) is asking shareholders to lend it money (£12bn) so to maintain credibility. The bank defends its strategy. Amazing? Not really as the banks have been lending money on vapour for a long, long time. And to each other, but no longer. The mists continue to clear so that the situation becomes more transparent and, paradoxically, confused. Virtual Money The Increase Of Worth And Value The real money is that which lenders pay the banks when servicing loans. The original loan can be extended based on theoretical money and repaid capital represents the gain the banks will make on nothing. There's at least one serious problem, though probably several that 'simply' manifest simultaneously creating massive confusion. And it's very confused. Running for cover though nobody realising that the tail covers are in place. It's all got to be paid for somehow and it won't be the banks funding their own folly. Games are being openly played in front of an audience that doesn't understand what is happening. This arrogance is depressing, yet very predictable. Quite nauseating. Rather like a scientist explaining the depths of quantum mechanics to the (average) ten year old. It's all an esoteric art to the uninitiated.