How credit cards & bank loans REALLY work - Learn, & this will change your whole life!!

[nuke em]

I completely agree. I've knocked enough holes in Nuke Ems arguments at the start of the thread to reach my own conclusions on all this but even if we take all the arguments at face value I just cant see why "fractional reserve banking" is such an issue.

 

The key point is that people have a choice - if you dont trust the banking system then simply use it to move money / pay bills when you have to (ie. to avoid bartering) and convert your savings from "money" to assets (ie buy gold and keep it in your cellar/shed/under the mattress). Personally I'll keep using banks because I much prefer the lifestyle I have now (nice car, house, clothes etc) and I know that my standard of living is so much better than that of my parents basically because the economy has grown funded by "fictitious" bank debt.

 

The header to this thread says that understanding how bank loans work will change my life - I dont think so unless by changing my life Nuke Em wants me to move 100 years backwards.

 

As I said in one of my earlier posts, the world will ge better and we will get through this recession - its just a matter of time.

 

 

Stornaway , The only thing you have knocked holes in is ????????!!!!!!!

You havent rebutted with "facts" any of the info given throughout this thread, but anyway....as you say "even if we take the arguments at face value....."

So, as to your other points in your last post, if the debt monster is not currently affecting you, insofar as you pay your bills & your "debts" etc as many people in this country are still doing then of course all this will pass you by. ie it doesnt currently affect you. As you state: you have your nice car (on Finance?), House (on Mortgage?) nice clothes (on the credit card?) so of course you want to keep everything as is. So dont rock the boat!

 

However,

 

many people are on on this DEBT forum 'cos they do have problems with their alledged "Debts" . This thread is for really for them , to help them (as THE KNOWLEDGE) helped me to understand .

Three years ago i would not have believed a word of this, why because i was like you, only more so, i had a great situation. all the lifestyle, toys and more, what did i care ? Truth is i didnt know or care about any of this, why should i ? , i wasnt directly affected! i had no idea about fractional reserve banking or anything like that.

 

Yes your standard is better than your parents in one way

we can have everything NOW, we dont need money NOW we just sign away, pay tomorrow, great while you can afford the repayments, but if your job goes away next week ( to China ) for example then what?

 

finally

you sound like you are a fan of john maynard keynes's version of economics ( as are most Gov's) he said much the same thing as you do.

 

me, i prefer Ludwig von Misses Ludwig von Mises Institute - Homepage and Murray Rothbard Murray N. Rothbard for my economics education

 

each to their own:!:

[diddydicky]

Stornaway , The only thing you have knocked holes in is ????????!!!!!!!

You havent rebutted with "facts" any of the info given throughout this thread, but anyway....as you say "even if we take the arguments at face value....."

So, as to your other points in your last post, if the debt monster is not currently affecting you, insofar as you pay your bills & your "debts" etc as many people in this country are still doing then of course all this will pass you by. ie it doesnt currently affect you. As you state: you have your nice car (on Finance?), House (on Mortgage?) nice clothes (on the credit card?) so of course you want to keep everything as is. So dont rock the boat!

 

However,

 

many people are on on this DEBT forum 'cos they do have problems with their alledged "Debts" . This thread is for really for them , to help them (as THE KNOWLEDGE) helped me to understand .

Three years ago i would not have believed a word of this, why because i was like you, only more so, i had a great situation. all the lifestyle, toys and more, what did i care ? Truth is i didnt know or care about any of this, why should i ? , i wasnt directly affected! i had no idea about fractional reserve banking or anything like that.

 

Yes your standard is better than your parents in one way

we can have everything NOW, we dont need money NOW we just sign away, pay tomorrow, great while you can afford the repayments, but if your job goes away next week ( to China ) for example then what?

 

finally

you sound like you are a fan of john maynard keynes's version of economics ( as are most Gov's) he said much the same thing as you do.

 

me, i prefer Ludwig von Misses Ludwig von Mises Institute - Homepage and Murray Rothbard Murray N. Rothbard for my economics education

 

each to their own:!:

 

i do however feel that we should keep some perspective on all this

 

as a nation we have been "living beyond our means" for well over 30 years and it should have been obvious to us all that the live now - pay later culture was bound to come to an end

 

 

i am old enough to remember having to wait months for a mortgage decision, of not being able to raise money on a mortgage unless it was for genuine home improvements, saving up to buy things instead of "on tick"

 

 

it is very easy and less painful, now that the recession has come for us all to "blame" the banks and the government for getting us into "this mess" but the fact is that with few exceptions we ALL got ourselves into "this mess"

 

just because someone tempts us with easy money does not absolve us from our own moral upbringing

 

 

we cannot simply say we had our arms twisted up our backs or had the money forced upon us!

 

"We are" the government - its not a faceless supernatural entity - we put them there, we went along with the gravy train

 

i understand your "crusade" against the present system but still feel that you havent really got anything other than "soundbites" and cliches to replace it with

[nuke em]

i do however feel that we should keep some perspective on all this

 

as a nation we have been "living beyond our means" for well over 30 years and it should have been obvious to us all that the live now - pay later culture was bound to come to an end

 

 

i am old enough to remember having to wait months for a mortgage decision, of not being able to raise money on a mortgage unless it was for genuine home improvements, saving up to buy things instead of "on tick"

 

 

it is very easy and less painful, now that the recession has come for us all to "blame" the banks and the government for getting us into "this mess" but the fact is that with few exceptions we ALL got ourselves into "this mess" - There is some truth in that statement, However if people were told up front that Banks just create money off the back of their own signiture they might still be ok with that but they also might say, Well why can't i just do that , why do i need a bank to create fiction funds? I'll sign this paper, it becomes money and Voila ! I'm my own bank!

 

just because someone tempts us with easy money does not absolve us from our own moral upbringing - True, but as above , if we were told the WHOLE story up front.....

 

 

we cannot simply say we had our arms twisted up our backs or had the money forced upon us!, True again, but their marketing is very clever and is based on not telling the whole story as above

 

"We are" the government - its not a faceless supernatural entity - we put them there, we went along with the gravy train , Not True.. If only we were the Gov. Actually it is an entity, A Coporation. See my post 185 repeated again here "Did you know for example that our country is already bankrupt ( it has been since 1869) and that we are trading in bankruptcy under chapter 11 protections, & that our Gov is in fact a Corporation ( check it out for yourself, they have a listing on Dun & Bradstreet) so are our MP's, The Police, the Court system. ( check out Northampton Bulk Court Centre as another example of a legal fiction Corporation or Your local Police Authority), the DVLA, The FSA etc etc. These are all private for profit Corporations. Were you aware for example that Alistair Darling is a Corporation who also DBA "the Labour Party" ? We certainly were not told that at any time!

 

(Check out John James Harris's videos regarding Corporations that most people think are UK Gov "departments")

 

 

i understand your "crusade" against the present system Not really a "crusade", just trying to inform those of us that are in the mire how we might have of got here and how we were not told the whole truth up front. Because if we were told the whole truth up front, the creation of debt just by your signiture, the preditory lending practices is another example, then perhaps some of would have made different choices but still feel that you havent really got anything other than "soundbites" and cliches to replace it with. Not my job to come up with a replacement system, just trying in my own little way to inform people about the one we have now... Of course if the BBC were a proper "for the people" organisation they could dedicate 2 or 3 TV hours a week to the subject to educate,inform the populace en masse and then more people would be able to make more informed choices based on education and its possible that less of them would be scratching around debt info forums such as this one for answers

 

sorry , but i thought it better to answer within your answer, hope you dont mind

[diddydicky]

There is some truth in that statement, However if people were told up front that Banks just create money off the back of their own signiture they might still be ok with that but they also might say, Well why can't i just do that , why do i need a bank to create fiction funds? I'll sign this paper, it becomes money and Voila ! I'm my own bank!

 

 

exactly. well go on then shurl create your own 10,000 to buy that car you want!! what's stopping you

[diddydicky]

a british govt trading(or not as the case may be) under the rules of a former colony- thats rich

[diddydicky]

Not my job to come up with a replacement system,

 

aha, gotcha there shurl,

 

i would argue that it is encumbent upon ANYBODY who wants to destroy something to be able to replace it!

 

i could quite easily go and hire a JCB and knock down my house

 

Ive got a good idea

 

lets do away with all the computers in all the world because they are the tool of those who want to spread disharmony and discontent and are controlled by the big corporations like microsoft

 

 

what will i replace it with? i hear you ask,

 

don't ask me i'm just some pillock that comes up with silly ideas of how to destroy things without knowing how to cope with the consequences

 

seemed like a good idea at the time Guv!

[nuke em]

There is some truth in that statement, However if people were told up front that Banks just create money off the back of their own signiture they might still be ok with that but they also might say, Well why can't i just do that , why do i need a bank to create fiction funds? I'll sign this paper, it becomes money and Voila ! I'm my own bank!

 

 

exactly. well go on then shurl create your own 10,000 to buy that car you want!! what's stopping you

 

do you know what, there is some movement along those lines.. you say it in jeste i know.... but there are some people further along the path who are using Accepted for Value as a "payment" method

 

would you adam an eve it!

[nuke em]

Not my job to come up with a replacement system,

 

aha, gotcha there shurl, No Dick you havent, i dont have the time... too busy trying to educate and get on with my own set of problems

 

i would argue that it is encumbent upon ANYBODY who wants to destroy something to be able to replace it!

Really , when Wimpey builds a new housing estate, they first get ACME demolition in to destroy what is there first... and ACME are never involved with the rebuilding process. Plus as i already said, i dont want to destroy anything, it is counterproductive.. just to educate!

 

 

i could quite easily go and hire a JCB and knock down my house

Where would you live ? sorry i dont have any spare room to house you

 

Ive got a good idea

 

lets do away with all the computers in all the world because they are the tool of those who want to spread disharmony and discontent and are controlled by the big corporations like microsoft - I wouldn't do that , anyway Computers are but dumb bits of plastic and metal, they need live humans to "tell" them what to do, why to do it and when to do it!

 

 

what will i replace it with? i hear you ask, - You have a hearing problem -i didnt ask

 

don't ask me i'm just some pillock that comes up with silly ideas of how to destroy things without knowing how to cope with the consequences - You said it, why, i dunno ?

 

seemed like a good idea at the time Guv!

 

1 2

[nuke em]

a british govt trading(or not as the case may be) under the rules of a former colony- thats rich

 

actually we are not rich, the bankster are 'cos that's who the Corporation is indebted to

[diddydicky]

do you know what, there is some movement along those lines.. you say it in jeste i know.... but there are some people further along the path who are using Accepted for Value as a "payment" method

 

would you adam an eve it!

 

you mean a form of bartering and promisery notes?

[nuke em]

you mean a form of bartering and promisery notes?

 

 

no i do not, not exactly... i mean "accepted for value" and "set off" (you will need to do your own research on this from now on )

 

I will explain one thing though, SET Off's using a business as an example

businesses do SET Off's every day, take VAT for example

 

Business A

Purchased £1000 plus VAT ( vat =£150) worth of goods , they paid out £1150 ( with vat at 15%)

 

They sold those goods at £2000 plus vat , they received £2300

 

Now they have to do their VAT return

 

so Input VAT = £150 which would be "SET Off" against Output VAT at £300 which means they send the HM revenue £150 which is the O/S balance

 

Now imagine if there was a way you could set off the £amount of a car you might want to buy ......or an even an existing debt you might currently have .........!

 

Does it bear thinking about?

[charlie*]

I have seen several money systems that could

be considered.... but not until enough slaves

discover the truth and rebel... en masse.

Politicians in the know won't do it - look what

happened to Pres Lincoln, Pres Garfield and....

John F Kennedy.

 

As the banksters said... (not verbatim)

 

'these people and others who help

us keep our [problem] going will be so pleased with the

favours we bestow upon them, even if they learn

the truth, will not make any complaint... and the

masses, the slaves who pay us usury on all the

money we give them will bear this burden forever

for they will know no better'.

 

Was it Henry Ford or Stonewall Jackson who said,

words to the effect....

 

'if the masses ever discover what was happening in

their name, there would be a revolution overnight'.

 

KNOWLEDGE IS POWER

 

BUT, hey-up, the system may be cracking.... the

guaranteed defined benefits pension schemes that

ALL banks give/gave their employees are, one by one,

being shut down in favour of money purchase schemes

which carry NO guarantees. They will not be happy

as the full meaning filters down the ranks.

 

Maybe tho they will begin to stir - especially

as they're not very well paid in the lower and middle

ranks anyway - but had looked forward to a comfortable

retirement.

 

My neighbour right opposite was a Nat West manager,

he's 84 now and healthy... he doesn't have a care in the world.

 

charlie*

[charlie*]

I have seen several money systems that could

be considered.... but not until enough slaves

discover the truth and rebel... en masse.

Politicians in the know won't do it - look what

happened to Pres Lincoln, Pres Garfield and....

John F Kennedy.

 

As the banksters said... (not verbatim)

 

'these people and others who help

us keep our [problem] going will be so pleased with the

favours we bestow upon them, even if they learn

the truth, will not make any complaint... and the

masses, the slaves who pay us usury on all the

money we give them will bear this burden forever

for they will know no better'.

 

Was it Henry Ford or Stonewall Jackson who said,

words to the effect....

 

'if the masses ever discover what was happening in

their name, there would be a revolution overnight'.

 

KNOWLEDGE IS POWER

 

BUT, hey-up, the system may be cracking.... the

guaranteed defined benefits pension schemes that

ALL banks give/gave their employees are, one by one,

being shut down in favour of money purchase schemes

which carry NO guarantees. They will not be happy

as the full meaning filters down the ranks.

 

Maybe tho they will begin to stir - especially

as they're not very well paid in the lower and middle

ranks anyway - but had looked forward to a comfortable

retirement.

 

My neighbour right opposite was a Nat West manager,

he's 84 now and healthy... he doesn't have a care in the world.

 

charlie*

[Stornoway]

Stornaway , The only thing you have knocked holes in is ????????!!!!!!!

You havent rebutted with "facts" any of the info given throughout this thread, but anyway....as you say "even if we take the arguments at face value....."

 

I think you'll find that between posts 102 and 152 I've demolished many of your arguments with hard facts albeit you do seem to have trouble accepting that what is said in the Times and Wikipedia is true...

 

I also note that we are still waiting on the stagflation which you said last March would be here within 12 months (see post 117).

 

I also hope that underdog13 didnt listen to your advice in post 74 when you told them to sell their house or fix their mortgage rate quicksmart because bank base rates were going to be 10% by end of 2009.

 

I t take your point regarding the debt monster and how it affects people (including me in the past) but it doesnt alter the fact that people have a choice. We can live within our means and still fund some of our lifestyle by debt or we can go completely overboard and get our personal finances into a mess.

 

I have a major problem with the greed of our banks over the last 10 years and the level of bank charges which have been applied are appalling but we need to fix the system through regulation not send ourselves back to the dark ages.

[nuke em]

I think you'll find that between posts 102 and 152 I've demolished many of your arguments with hard facts albeit you do seem to have trouble accepting that what is said in the Times and Wikipedia is true..Dont think so.... Oh well if it said it in the Times and Wiki IT MUST BE TRUE! or Not

 

I also note that we are still waiting on the stagflation which you said last March would be here within 12 months (see post 117). ok and we are in only July 09

 

I also hope that underdog13 didnt listen to your advice in post 74 when you told them to sell their house or fix their mortgage rate quicksmart because bank base rates were going to be 10% by end of 2009. and we are only in July 2009... plus i cant be bothered to look back to what you said they would be, it is of no matter whether you are correct or not as it does not matter at this point in time, regardless though interest rates are only going one way and that is UP

 

I t take your point regarding the debt monster and how it affects people (including me in the past) but it doesnt alter the fact that people have a choice. We can live within our means and still fund some of our lifestyle by debt or we can go completely overboard and get our personal finances into a mess. True, i agree

 

I have a major problem with the greed of our banks over the last 10 years and the level of bank charges which have been applied are appalling but we need to fix the system through regulation not send ourselves back to the dark ages.True , i agree that might need to happen or more enforcement which is what we are really lacking

 

1 2

[diddydicky]

Originally Posted by Stornoway

I think you'll find that between posts 102 and 152 I've demolished many of your arguments with hard facts albeit you do seem to have trouble accepting that what is said in the Times and Wikipedia is true..Dont think so.... Oh well if it said it in the Times and Wiki IT MUST BE TRUE! or Not

 

 

shurl, a t trickcyclist would have a field day with you

 

interesting remark "if it said it in the times well it must be true"

 

i'm not a trickcyclist myself (not a gynaecologist either - but hey girls - if you got any problems i'm always willing to have a bloody good ferret around for you!)

 

but would describe this as the "Jesus Syndrome"

 

(i think David Icke was the last known sufferer) in which no one's opinion apart from your own is to be taken seriously!!

[Bill Shidding]

These quotations shamefully plagiarised from the "money as debt" films.

 

"Some of the biggest men in the United States, in the field of commerce and manufacture, are afraid of something. They know that there is a power somewhere so organised, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in comdemnation of it"

Woodrow Wilson (former US President)

 

"Permit me to issue and control the money of a nation, and I care not who makes its laws"

Mayer Anselm Rothschild (Banker)

 

"The process by which the banks create money is so simple that the mind is repelled"

John Kennedy Gilbraith (Economist)

 

"Bankers own the Earth.

Take it away from them, but leave them the power to create money, and with the flick of a pen, they will create enough money to buy it back again....

Take this great power away from them and all great fortunes like mine will disappear, and they ought to disappear, for then this world would be a better and happier world to live in.

But, if you want to continue to be the slaves of the banks and pay the cost of your own slavery, then let bankers continue to create money and control credit"

Sir Josiah Stamp (Director Bank of England 1928-1941)

 

"The inability of the colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the PRIME reason for the revolutionary war"

Benjamin Franklin

 

"Until the control of the issue of currency and credit is restored to Government and recognised as its most conspicuous and sacred responsibility, all talk of sovereigntyof Parliament and democracy is idle and futile". "Once a nation parts with control of its credit, it matters not who makes its laws....". "Usuary once in control, will wreck any nation."

William Lyon Mackenzie King (PM of Canada, Nationalised Bank of Canada)

 

 

"We are grateful to the Washington Post, The New York Times, Time Magazine and other great publications whose Directors have attended our meetings and respected the promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practised in past centuries."

David Rockerfeller (Address to trilateral commission meeting 1991)

 

(There are loads more)

 

What should replace FRB? As a wild guess, how about the tally stick?

 

Bill

[rickyd]

Nuke em

 

your comment "and we are only in July 2009... plus i cant be bothered to look back to what you said they would be, it is of no matter whether you are correct or not as it does not matter at this point in time, regardless though interest rates are only going one way and that is UP" is truly inspired. Wow - base rate at 0.5% and the rates can only go up - outstanding!

 

For what its worth - I think Stornaway hit the nail on the head. Do not make the mistake of confusing accountancy parlance and long-winded expalantion with common sense. Its not clever, it smacks of arrogance.

 

I particularly liked the simplistic view of mortgages where it costs the bank nothing. So where does the mortgage funding that arrives in the solicitor's client account come from? Is it really san IOU?

 

And if we assume that bank workers are paid at least a pittance for their efforts, isn't that a cost to the bank? Also the comissioning of the various IT systems, property and general infrastructure, marketing, product support et al,surely they aren't free either?

 

Now don't get me wrong here, I'm no fan of greedy nor unethical banks, but you need to keep this real. Would you expect any organisation to provide a good or service for nothing?

 

Banks are about sales, not finance. They sell facilities to permit people to acccess their aspirations and desires - houses, holidays, cars, whatever.

 

If you borrow £1 you know it will cost you more than £1 to repay it, in the same way that the car you bought for £5000 didn't cost the seller £5000. These are businesses not philanthropic organisations, they don't do charity.

 

If you access the funding through the car dealer you'll pay more than £5000. Obviously using your own funds also has a cost, the loss of use of your funds for other gains eg interest etc.

 

I think most folk are able to grasp this concept and shop around for the method that suits them and accept the costs of their choice. Some however let their desire to spend take over and ignore the costs and can slip into a spiral of chaos that leads them into serious trouble, others make use of low rates or interest-free facilities, we're all different.

 

In our Utopia, we would all swap skills and benefit for no profit, just get what we need and pay through work or facility so everyone ends up square wit no debts and everyone's happy.

 

The problem is that people want things before they can afford to balance thier books and this is where the banks assist them on the road to their financial decline, by encouraging spending instead of urging restraint. The reasons are obvious and unavoidable, its all about sales!

 

If bank A says no (because they are ethical and don't want to encourage debt) the borrower heads off to bank B instead, if they say no, it's bank C etc. If they a credit rating that prevents this, they head off into the realms of the "impaired credit lenders" who will facilitate their demise even faster through ridiculous interest rates.

 

Here's a readical thought - lets ban "impaired credit facilities" and stop their victims sliding further into debt. How radical, or likely is that?

 

So we're stuck with what we have and irrespective of where the money is or isn't; whether we are talking cash, negotiable bonds or promisory notes, we cannot escape this system until people stop borrowing.

 

My dad had a simple philosophy - if he didn't have the money he waited until he did. I think that's a great idea, but try telling the "I want the new i-phone/MP3/handbag/playstation" generation. You'll be wasting your breath.

[fergal71]

hi ricky d agree with all you have said apart from the fact that everyone on here is on this kind of site for a reason we do not have problems with companies making money as this pays our wages what we do not stand for is greedy companies flouting laws to suit themselves. and when they make huge profits they get even greedier and pile on even more misery then the get it wrong and we bail them out... how can you take the view you do.... I agree we should buy something that we know we can afford.... this would be the case if it werent for companies changing interest rates inflating charges and ruining our credit historys for making a payment late because of errors their computer system made?????????????? please dont tar everyone with the same brush... the country the world is in recession/depression for one reason only... greed of the few at the top... and whilst they suffer on golf courses, general population suicide rises because we cant pay our bills, cos business we worked for cant get credit to maintain through hard times....

[rickyd]

this is really helpful point, well made. I'm happy to concur that nobody should give in to or condone greed, excessive interest rates and dodgy charges.

 

Whilst I totally agree that the problem is exacerbated by the attitude of the banks, but still believe that initially this has been fed by people wanting to buy before they are able to afford, or have been urged to do so on by easily available credit.

 

The one thing that we need to get away from is the notion that the government had any choice other than to bail the banks out. Not to do so would have rendered the country unable to function as the financial fibre of the UK is inextricably linked to the banking system, not to mention the spectre of massive numbers of ex-bank staff join the ranks of the unemployed.

 

None of this of helped by piling on extra charges to someone who is already struggling to repay their debts and the fact that obscene levels of bonus are enjoyed by some, whilst most of the working population (including rank and file bank workers) are facing increased costs is so many areas of their lives. Its so bad its immoral. Chief among these are Messrs Hornby and Goodwin who's remuneration package simply beggars belief.

 

You're absolutely right, thanks for responding. An issue this important cannot be allowed to slide into the background

[andrew1]

What they should have done was to give the people the taxpayers money by paying off their loans mtgs and credit with these vast sums of money they have dumped into the banks. That way the banks would have got their money, all be it round the other way than just a hand-out from the Gov't, debt would have been erased, repossessions would be halted, people would have their incomes to spend and businesses would have begun to pull out of recession because people would spend and buy again. And to cap it all although not on my personal wish list, this government wouldn't have had to worry about being re-elected for years to come but been seen as real people champions.. Too easy though...

[rickyd]

great idea but two flaws with your suggestion - 1 why should we, the taxpayers repay Joe Bloggs's loan/mortgage/credit card for him? 2 - the money wasn't dumped, it was loaned and the I expect the Government to recover all of those funds plus a handsome profit in years to come.

 

Its way too optimistic to expect the Government to do anything that directly helps the tax payer. Haven't you figured it out yet? They're not here for us, we're here to pay their salaries, expenses and pensions. The only people who immediately benefited fro the bail out, were the bank employees who kept their jobs and the job centres, who didn't get swamped by loads of redundant cannon fodder from the banks.

 

The big boys, of course simply float above all this and continue picking up their bonuses come what may.

[andrew1]

great idea but two flaws with your suggestion - 1 why should we, the taxpayers repay Joe Bloggs's loan/mortgage/credit card for him? 2 - the money wasn't dumped, it was loaned and the I expect the Government to recover all of those funds plus a handsome profit in years to come.

 

Its way too optimistic to expect the Government to do anything that directly helps the tax payer. Haven't you figured it out yet? They're not here for us, we're here to pay their salaries, expenses and pensions. The only people who immediately benefited fro the bail out, were the bank employees who kept their jobs and the job centres, who didn't get swamped by loads of redundant cannon fodder from the banks.

 

The big boys, of course simply float above all this and continue picking up their bonuses come what may.

 

To answer your first point of " why should we " I'd agree to an extent..but think of the overall benefit this would have brought to society....one I have seen many pointing to about being a society without debt? Once these debts are cleared you close the door on more debt given out irresponsibly which is what has caused this mess - sure people have been irresponsible too..but it's okay for bankers to get bailed out, but not the people they feed off who have been put through all kinds of misery through lending, as someone else pointed out, 'something the banks created from nothing' - they didn't HAVE the money, they lent you an me 'numbers on a piece of paper ' then sold it on via securitisation - they create NOTHING!

And why is it that so many people say that our grandchildren and their children will be paying for this if it's all going to bring such wealth as you suggest?

 

Believe me, the attitude of 'why should we' is the kind of attitude that creates this irresponsibilty in the first place from both sides of the spectrum - just start the lateral thinking and see what benefit society would have gained from this once in a lifetime opportunity to turn the clocks back and make this country respectable and great again...

 

I agree with you, it is too simplistic to expect any government to do anything for the people before they have secured their pensions etc...but wouldn't it be nice if someone could think outside the box sometimes and do something really worthwhile...then educate our kids to steer as far away from this debt ridden society forever...

 

Mornin folks

 

 

A1

[Undercover-Elsa]

Morning

I love your idea Andrew, and surely, as the loans would be paid off by the Government, the tax payer would benefit in that the banks would then not need to write them off against tax.

The Government would then also save on administering the thousands of complaints to the OFT / FOS on dodgy debt collecting as there'd be no loans sold on to DCA's. Might lose out on revenue to the Court system though .

In an ideal world...sigh!

[rickyd]

andrew1 - fair point I guess and a wonderfully altruistic aim. Sadly there are those in our society who don't have any responsibility, in all manner of things.

 

Yes, its patently true that the bankers saw no responsibility in persisting with their ill-thought out plans and chose profit over sustainability. Of course that's what their job title says they do, they move funds from A to B and keep the difference. The real responsibility lies with the strategy creators, those who hold the reins to these vast corporations.

 

Take the USA toxic home loan issue. The doorstep sellers may or may not have realised they were encouraging their victims to enter a situation they could never successfully escape from. Their losses did not concern the sellers, they were too busy focussing on their commission.

 

I have no doubt that some of these "advisors" did have second thoughts, maybe some even stopped before doing the deed, but the most successful must have understood the process and the terrible price their clients would end up paying. The bosses of the companies that employed them were absolutely guilty of miss-selling and should be jailed.

 

Moving on to the funding organisations, they should and probably did, carry out due diligence to discover what their money would be used for, and the likelihood of getting their money back, but they clearly didn't. Worse still, if they did and still went ahead, they are equally guilty of complicity in this crime.

 

Having created a house of cards of lending to unsuitable clients on unsuitable properties, they bundled the funding into big parcels and sold the debt to the "respected" corporations, who by their sheers size and length of existence were deemed to be a "safe bet". Incredibly, this gave their prospective business partners even less cause to check the details and they were able to effectively slide the risk off to unsuspecting and importantly, foreign financiers. e.g Citibank Corp to Northern Rock.

 

Remember in all of this is there are the layers of "profit" collected along the way. The doorstep sellers commission; the cut made from the first company on selling the debt to the middleman, their cut from Citibank and Citibank's profit to be paid by Northern Rock, ultimately paid by the man in the street in Britain.

 

The homeowners lost just about everything, most of the doorstep sellers gained then ultimately lost, as nobody wanted to employ them afterwards, the big corporations, as usual, did OK leaving the last link in the chain to pick up the pieces. The systems and regulations were in place, but nobody bothered to follow them, their due diligence turned out to be inept negligence and greed took over from caution.

 

All the big banking corporations are at it. Some work with the public through loans and mortgages, others with global companies with lines of credit and trading accounts. The Government is in there too with PFI agreements and have an abysmal record in this area.

 

The Chancellor's rescue plan was based on necessity as the banks are so intimately spliced into the country's financial DNA that we simply cannot function without them. Imagine a world with no direct debit, BACS salary payments to workers, Switch and Credit Card payment systems (guess which company owns almost all the technology driving Chip and Pin?), bank drafts, mortgages and personal loans.

 

In principle his deal makes sense too. He pays X to keep the banks afloat and gets X + 20% back when they have recovered and bought their shares back from government control. The extra benefit is not having literally hundreds of thousands of ex bank staff as new additions to the dole queue changing from being tax payers to benefit claimants.

 

Where he failed most spectacularly was in not stipulating sufficiently stringent control over what the money could be used for. Practically everyone in the country gasped when a good chunk of the money was paid in executives bonuses and CEO golden handshakes and pensions.

 

I still find it inconceivable that Fred Goodwin got any pension at all as he almost single handed drove the RBS ship headlong onto the rocks. OK you could argue that he had done something good previously and therefore earned a pension, but how on earth could his pension fund double in the same year that the bank went down the tubes and how do he manage to keep it? Easy - the Government's so called expert was hoodwinked by people with years of practice in hiding details, which is precisely why the notion of the Government sorting this out is ill-founded and massively optimistic at best. Of course the expert didn't lose out as a result of his incompetence either.

 

Until we have a government who actually make sensible decisions and follow them through, we're likely to be stuck with what we have and personally I'm not holding my breath here!

Edited September 7, 2009 by rickyd