There may be trouble ahead...
Too many people are in debt. We recently had Northern Rock closing its doors on its customers, failing to honour "we promise to pay the bearer on demand" as is printed on our banknotes, because the Bank of England refused to bail it out with a loan. Now the world's largest bank, Citigroup, is in trouble and is holding an emergency meeting this weekend. Citigroup's chief executive, Charles Prince, may have his head on the chopping block. It is rumoured that Barclay's bank is also in trouble after approaching the Bank of England for an emergency loan. Is the capitalist system about to come crashing down? Are we heading for another Wall Street Crash?
I don't normally blog on financial matters. However, I must admit that I have been feeling the pinch of late. Debts up to my eyeballs, bank charges for going overdrawn. But there is definitely something going wrong. What are banks doing with the money that they are supposed to be looking after for customers? When banks like Northern Rock have to borrow £23 billion from the Bank of England, and the government has to step in to bail them out the warning signs do not look good.
Then there is the question of why did Gordon Brown appoint Alistair Darling to the post of Chancellor if he does not have faith in him in a crisis like this? Apparently, Gordon Brown has appointed Baroness Vadera, the International Development Minister, to oversee the job is done to Gordon Brown's liking. Does this mean that we will soon see a cabinet reshuffle?
UPDATE: Citigroup's Prince to resign.
A mixture of law, politics, autobiography and humour. Once described as "The Devilish Advocate" (Guardian), I do have the ability to provoke a response. Sometimes it comes from someone who uses a thought process, and sometimes from jerks usually associated with the knee.
I can not understand what is going on at the moment over at the Treasury.
ReplyDeleteIs Alistair Darling really the Chancellor?
Or has the organ grinder decided to use another monkey for his dirty business.
But I certainly agree with you John that funds don't seem to go as far nowadays!
I think in reality funds have always been tight. The banks and lenders have allowed people to live beyond their means and as the screws tighten the first to feel the pinch is the public.
ReplyDeleteWith regard to the Chancellor... As with all members of a government the man at the top(or woman) pulls the strings.
House prices rise we are told because of demand! Not then the estate agents who over value or the lender who tells you borrow more and more!!
The banks created the problem because of greed. It's a shame the public as normal have to pay the price. We have been made to operate in a system that we have no control over. You go out to work and earn money that is your own. Yet, we have to use the banks and we have no real say on what they do with it.
The more prudent (I really wanted to use that word) we become, then the cheaper things become. Human nature I am afraid, does not allow us to be prudent (said it again!) and so the bubbles burst time and time again.
Great to see more and more bloggers drawing attention to these things. Yes, we're in big trouble.
ReplyDeletewell i'm no expert but I thought it would always turn to shit if the economy was allowed to run on the simple premise that all was well as long as people were all running round with a fistfull of credit cards. What to do, tighten the belt now or go on a final binge for christmas and sod it?
ReplyDelete"We recently had Northern Rock closing its doors on its customers, failing to honour "we promise to pay the bearer on demand" as is printed on our banknotes, because the Bank of England refused to bail it out with a loan."
ReplyDeleteI must have missed this bit in the news. As far as I'm aware the BofE did bail NR out and are still doing so.
rossinisbird: Initially the Bank of England refused the loan until the government stepped in and the Bank of England changed its mind.
ReplyDeleteThe story didn't become public until after the Treasury and BofE had agreed to provide the 'lender of last resort' liquidity funding.
ReplyDeleteIt's incorrect to suggest that the headless chicken run on NR's savings accounts was caused by the BofE's initial reluctance to provide the facility.