Posted on March 6, 2009
Mervyn King had the look of a man, that if he farted he would shit himself whilst explaining this latest plan which will make him either a hero, or a scapegoat. It is in truth a path in to the unknown, a stab in the dark that could, if unsuccessful, result in spiralling inflation, or hyper inflation, as experienced in Germany in the 1930’s and more recently in Zimbabwe. If this happens ladies and gentlemen we may as well purchase revolvers and take a stroll in the woods as we will be well and truly fucked.
What gets me, and call me Mr Thicky if you wish, is how do you get banks to lend again when the base interest rate is so low, plus they will not lend unless the money is guaranteed against assets, but not many people/businesses have valuable assets as most have devalued or been repossessed.
It is a right mess, as you now have a bank who will not lend unsecured money (the words horse and bolted come to mind here), and borrowers who have nothing to borrow money against or won’t risk personal assets. Only recently Chef Anthony Worrell Thompsom complained that he could not get a £300k overdraft to prop up his ailing business as he refused to put up his £1m house as security. Personally I think that if you borrow that much money you should have it secured against an asset, isn’t the failure of the banks to ensure that what brought the country to it’s knees?
It would appear that as well as reckless lending we have also had reckless borrowing. If people like Worral Thomson believe it is okay to borrow £300k unsecured and walk away free from debt by winding up his Ltd company if it all goes tit’s up, it just shows the culture with have lived in for the last 15-20 years.
Perhaps the only way the banks can claw money back is by picking on people like my house mate. They recently kindly gave him a business overdraft without him asking for it, and charged him £175 for the privilege.