Friday, December 16th, 2011
CLOG121211
Do you remember how, over the past decade or more, we – and particularly our young people – have been encouraged to live increasingly on credit. Well, it seems that that was not enough for those who steer the markets. They have now succeeded in seducing entire states – some of them quite respectable – to live increasingly on credit. So while some of us were gradually realising what was happening to us personally, the big players had moved on to the really big fish. All this made me think of those huge bonuses bankers paid one another – as they were based on the amount of business done, it mattered not whether the actual banks won or lost. If the shareholders wouldn’t stand the loss, then the customers would get it, one way or another. Then I was feeling a bit guilty about lumping all bank employees in with the “scoundrels” at the top. Was not the humble bank employee as much a pawn in the great pawn-shop as any of us. However, I myself have now realised that, if you see an expensive house extension going up near you, the owner will, more likely than not, be employed in banking (or allied trades such as insurance). These are the only people with easy access to substantial mortgages, at infinitessimal interest rates. If we could add up the “in-kind” value of all these mortgages granted to rank-and-file employees, how would it compare with the scandalous sum paid out in bonuses to their bosses? Would it, in fact be so huge as to dwarf those bonuses?
So the majority of European countries (including UK) are hugely in debt and must borrow even more just to service those debts. I’m still asking myself “who has all the money to lend to these borrowers? – China was my first thought, then the Oil Sheikhs. Finally, I concluded that it was actually our own money, looked after by “fund managers” and lend back to our governments who then have to tax us, render some unemployed (who then have to spend their savings, if they have any) and withdraw benefits from the most needy. So, our investments have been loaned back to us at a rate of interest substantially higher than we would be paid, as depositors. Clever, isn’t it? Perhaps I’ve been watching too much on RT!
Capt’n (Granpa) Jim.