The half-baked partial nationalisation of British banks is giving the 
taxpayer the worst of all worlds, for it provides frighteningly large 
sums to the very people who have got us into this mess without any
proper control over what the banks do with it. The likely response of 
the banks to the present action is likely to be the same as their 
response to the previous massive taxpayer assistance they have received 
in the past year: they will hoard the money to fill the holes in  their 
balance sheets made by reckless lending.

Full scale nationalisation is the answer. This will at a stroke begin to 
unblock the credit freeze,  because the question of a lack  of 
confidence will be obliterated because the taxpayer will be behind the 
banks (which in the case of an advanced  country such as Britain is the 
best security there is). That alone  will remove most if  not all of the 
danger to the taxpayer of massive losses. In addition,  because there 
will be only one agency making the decisions, the Government, it would 
be possible to rapidly allocate specific amounts of money to provide 
credit for small and medium size businesses and to mortgages.

Apart from the present crisis there is a good general reason why banks 
should be nationalised. They are the prime drivers of the growth in the 
money supply through their massive expansion of credit (when a loan is 
made the money supply increases by the amount of the loan, because the 
lender still owns the money and the borrower has the use of it.) The 
lack of proper controls over lending has effectively privatised control 
of money, with the financial institutions being allowed to contaminate 
the currency by creating money of widely varying quality. An analogy 
would be with a currency based on gold  with the government minting to a 
consistent standard,  while allowing private companies to mint coins to 
whatever standard they chose. Nationalisation puts control of the 
currency back where it belongs, in government's hands.

Why are our politicians still not doing what is necessary? It is because 
all three major British parties have bought into so-called free market 
economics (in reality, government controlled markets through 
anti-monopoly legislation) and are now in the position that they cannot 
openly criticise what has happened in the past 30 years because they are 
all guilty of supporting it.  That Gordon Brown, the prime British 
architect of the present mess through his failure to act to control the 
expansion of credit (worse, he acted as cheerleader for it), is trying 
to portray himself as our saviour is truly repellent.

There is a further problem, an emotional one. Many of the followers of 
laissez faire hold their creed  as religious belief rather than a 
rational policy and are, consequently, very loth to give it up  That 
being so,RH
-- 
Robert Henderson
Blair Scandal website: http://www.geocities.com/ blairscandal/
Personal website: http://www.anywhere.demon.co.uk

I had a grand of Northern Rock shares - where did the money go? To the
Government I guess.  Will they pay taxpayers back when banks start
making a profit again as their shares go up in value.

On Mon, 13 Oct 2008 20:26:07 +0100, Robert Henderson
 wrote:

>There is a further problem, an emotional one. Many of the followers of 
>laissez faire hold their creed  as religious belief rather than a 
>rational policy and are, consequently, very loth to give it up  That 
>being so,RH

you're sure right about that bit....
you socialists are just the same....
you never ever give up the cult religion

regards...

-- 
web site at www.abelard.org - news comment service, logic, economics 
 energy, education, politics, etc 1,552,396 document calls in year past
--------------------------------------------------------------------------------
  all that is necessary for       []     walk quietly and carry
  the triumph of evil is that      []           a big stick.
  good people do nothing     []   trust actions not words
                    only when it's funny -- roger rabbit
--------------------------------------------------------------------------------

Robert Henderson wrote:

> Full scale nationalisation is the answer. This will at a stroke begin to 
> unblock the credit freeze,  because the question of a lack  of 
> confidence will be obliterated because the taxpayer will be behind the 
> banks (which in the case of an advanced  country such as Britain is the 
> best security there is). That alone  will remove most if  not all of the 
> danger to the taxpayer of massive losses. In addition,  because there 
> will be only one agency making the decisions, the Government, it would 
> be possible to rapidly allocate specific amounts of money to provide 
> credit for small and medium size businesses and to mortgages.


Well what they could have done with a fully nationalised bank is
allow all benefit money to be dealt with via that bank, thereby stopping
all the interest paid flowing away from the public purse.

Then they could also help those on benefits by cutting their visa cards interests in half.

It's bizarre that the public should Loan private banks, public money
at zero percent interest only for the banks to then charge us
19 percent to borrow our own money back.

If all Benefit accounts were moved to a National Bank of England
it would save ~Billions.



--
Blue

On Oct 13, 8:26 pm, Robert Henderson 
wrote:

> The half-baked partial nationalisation of British banks is giving the
> taxpayer the worst of all worlds, for it provides frighteningly large
> sums to the very people who have got us into this mess without any
> proper control over what the banks do with it. The likely response of
> the banks to the present action is likely to be the same as their
> response to the previous massive taxpayer assistance they have received
> in the past year: they will hoard the money to fill the holes in  their
> balance sheets made by reckless lending.

Isn't that what a capital injection is supposed to do?

Capital is not for lending to customers but the maintenance of liquid
reserves into which profits from the banking process are paid and
losses are met.

One of the criticisms made of the banks is that their capital base is
too low.

On 13 Oct, 20:26, Robert Henderson 
wrote:
> The half-baked partial nationalisation of British banks is giving the
> taxpayer the worst of all worlds, for it provides frighteningly large
> sums to the very people who have got us into this mess without any
> proper control over what the banks do with it. The likely response of
> the banks to the present action is likely to be the same as their
> response to the previous massive taxpayer assistance they have received
> in the past year: they will hoard the money to fill the holes in  their
> balance sheets made by reckless lending.
>
> Full scale nationalisation is the answer. This will at a stroke begin to
> unblock the credit freeze,  because the question of a lack  of
> confidence will be obliterated because the taxpayer will be behind the
> banks (which in the case of an advanced  country such as Britain is the
> best security there is). That alone  will remove most if  not all of the
> danger to the taxpayer of massive losses. In addition,  because there
> will be only one agency making the decisions, the Government, it would
> be possible to rapidly allocate specific amounts of money to provide
> credit for small and medium size businesses and to mortgages.
>
> Apart from the present crisis there is a good general reason why banks
> should be nationalised. They are the prime drivers of the growth in the
> money supply through their massive expansion of credit (when a loan is
> made the money supply increases by the amount of the loan, because the
> lender still owns the money and the borrower has the use of it.) The
> lack of proper controls over lending has effectively privatised control
> of money, with the financial institutions being allowed to contaminate
> the currency by creating money of widely varying quality. An analogy
> would be with a currency based on gold  with the government minting to a
> consistent standard,  while allowing private companies to mint coins to
> whatever standard they chose. Nationalisation puts control of the
> currency back where it belongs, in government's hands.
>
> Why are our politicians still not doing what is necessary? It is because
> all three major British parties have bought into so-called free market
> economics (in reality, government controlled markets through
> anti-monopoly legislation) and are now in the position that they cannot
> openly criticise what has happened in the past 30 years because they are
> all guilty of supporting it.  That Gordon Brown, the prime British
> architect of the present mess through his failure to act to control the
> expansion of credit (worse, he acted as cheerleader for it), is trying
> to portray himself as our saviour is truly repellent.
>
> There is a further problem, an emotional one. Many of the followers of
> laissez faire hold their creed  as religious belief rather than a
> rational policy and are, consequently, very loth to give it up  That
> being so,RH
> --
> Robert Henderson
> Blair Scandal website:http://www.geocities.com/blairscandal/
> Personal website:http://www.anywhere.demon.co.uk

Obviously, for the sake of confidence, everybody seems to be throwing
themselves behind the bank rescue effort.

But the rescue effort is only the best that can be done by people
constrained by both practicalities and politics.

Genuine believers in free-markets think that it probably wont work. It
may save the banks from crashing within the next three or four months,
but there's certainly no guarantee they're saved. And, all this tax
payer's money is going to impact the future even if they are.

Plus, there's the credit shock to the wider economy, which is big and
will happen anyway. Truth of the matter is that some credit
instruments wont get used again - so the world has less credit now
(whether it was sound credit, or not).

The real task for future western governments is to create jobs that
add-value to western economies - like manufacturing used to.
Everything else is just papering-over the cracks.

Technology is the answer. We need to invest in technology like we've
never done before - technologies that will create those jobs.

The British situation is that Britain, for the first time since
Elizabeth 1st, no longer has significant technological advantages.  If
that doesn’t change then we're looking at a new age of economic
mediocrity.

Everything we've done since Elizabeth 1st - that's navigating the
world, building an empire,  winning wars, selling British goods
everywhere - relied upon technological advantages. But we dont now
have enough of those to remain a leading world economy. That must
change or we'll all have to get used to being less prosperous.

count 2 wrote:
> I had a grand of Northern Rock shares

That doesn' mean much, theymight have been worth ten times that once, or 
ten times less.

> - where did the money go? To the
> Government I guess.  Will they pay taxpayers back when banks start
> making a profit again as their shares go up in value.

If your shares are still valid then you will benefit from any future 
profits, so will the government/taxpayer.

On Mon, 13 Oct 2008 20:26:07 +0100, Robert Henderson
 wrote:

>There is a further problem, an emotional one. Many of the followers of 
>laissez faire hold their creed  as religious belief rather than a 
>rational policy and are, consequently, very loth to give it up  That 
>being so,RH

Won't the Bilderbergers be pulling strings?

MM

On Mon, 13 Oct 2008 20:18:45 -0700 (PDT), aiguru@lycos.co.uk wrote:

>Everything we've done since Elizabeth 1st - that's navigating the
>world, building an empire,  winning wars, selling British goods
>everywhere - relied upon technological advantages. But we dont now
>have enough of those to remain a leading world economy. That must
>change or we'll all have to get used to being less prosperous.

I agree with you absolutely. Were you the guy who rang into Call You
and Yours today? He had a remarkably similar view to yours re
technology and the fact that the grocer's daughter stopped us from
doing it.

MM