Posted tagged ‘politics’

We Need a Jubilee Year to Write off Debt

January 20, 2009

We need nothing short of a Jubilee year where debts are written off to solve this depression. Now is the time to wipe away the mountain of derivative debt that is about to avalanche and bury us.

Conventional methods for de-leveraging the bottomless pit of banker-created debt aren’t working. The Brown government isn’t making any promises of success either. Everyone else is up the same creek is the best they can say. The £37bn hoovering up of debt was declared a failure after a mere two months. The next in line £200bn cash bung will help push public debt up to an estimated 10% of national GDP by 2010. By this time the credit rating of the UK will be downgraded meaning that the government will have to up interest rates if it is to entice anyone to buy the bonds needed to finance the spending spree. Aside from the inflationary effect of all the money being created to stimulate the bankers, high interest rates will start set off an inflationary spiral.

Instead of saddling the tax payer with debt by spending billions on strategies with uncertain results, why not wipe the slate clean of derivative created debt? Who would it hurt aside from those banks are about to collapse anyway? After all, isn’t it generally seen as enlightened when we wipe out the debts of struggling Third World nations to give their people a chance of survival?

If money keeps disappearing down the every hungry mouths of bankers with little or no long term effect, the inevitable payback will come when the government has to start cutting social security, pensions, education and NHS budgets. Maybe ultimately the tens of billions for Trident will be lopped off the defence-offence budget. Perhaps.

Maybe, it’s inevitable that the government will end up going to the IMF with a begging bowl. IMF and World Bank aid comes at a price. Further infrastructure sell offs, more budget cutting and loss of national independence over economic affairs. Oh, and throw in a few riots as the disappearing middle classes say enough is enough. Look at Iceland, Argentina, Indonesia…

The same rich investors who are being supported by tax payer money are now short selling on bank stocks as that’s the only certain way of making money at the moment. Who would want to buy shares in a failing bank? The only mug is the tax payer.


Greek Riots coming here soon?

December 9, 2008

Greek riots – the flashpoint of a 15-year-old son of a bank manager shot dead by police. Another western society that has been destabilised by a new left government implementing IMF/World Bank neoliberal policies that has left one fifth of population living in poverty while the rich have gotten richer under a deregulation and low tax program. The government is perceived by the people as corrupt and ineffective. With an insulated governing class; and a prime minister himself the nephew of a previous president.

The Guardian newspaper interviewed a Greek who spoke of a generation who see their parents stuck in debt who themselves have no hope, living on 500 Euros a month.

In some ways it is invigorating to see people rise up and say ‘Enough!’ Refreshing that technology has not been deployed to prevent people from doing so – such as microwave cannons designed to cause burning sensations and nausea in people. For now, it still comes down to tear gas and truncheons; with the usual media focus of ‘anarchists’ and ‘stone throwers’ when no mass movement can consist entirely of those elements. Though mobile phones and internet allow flash mobs to form according to CNN: “These young people — often referred to in Greece as ” the known-unknowns” — use texting and Web sites to organize and communicate.” A linguistic legacy of Rumsfeld.

These riots follow hot on the heels of those in Iceland, where one third of people are trying to exit the country. Discontent bubbles quickly to the surface as citizens realise the government is unaccountable and incapable of managing the economy effectively as it is the international bankers who pull the strings. And then what can you do but take to the streets? We are going to see more of this – like the so-called ‘IMF riots’ seen in Argentina, Russia, Mexico, etc. in previous decades as the middle classes feel the chill.

The Financial Times reports today that UK corporate pension pots are falling in value at a time when corporate insolvencies are mounting. The dangers of unrest increase as the middle class gets looted and every day seems to bring a story telling us that the recession/depression will be deeper than feared.

When will it happen here?