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Thread: Brexit - Dose of reality needed

  1. #41
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    Which they admitted - 'there is no money left'

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    Phantom (11-02-2019)

  3. #42
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    Quote Originally Posted by Phantom View Post
    Lending is the life blood of any economy, and borrowing is not a sin, without lending/borrowing/ overdrafts none of us would have the computers to visit this Forum, or motor cars, or housing, or shops or leisure centres etc etc etc. - just think about it?


    As far as interest being charged, how many people are happy to pay for a solicitor or an accountant, or for food or mobile phones, or a pint of lager, knowing that the supplier charges a percentage on top of the cost price as a profit, yet complain about banks charging a percentage to make a profit- a charge which often is far far lower than the profit margin on many goods!


    As far as the financial crisis is concerned, the banks did not expect to be bailed out, and had it not been for Gordon Brown lacking the ability to think 'outside of the box' , they may not have been.


    He was already well aware of the fragility of the UK economy and that it would mean a collapse in the U.K., if the financial crisis in the US was to spread, and he, along with Alastair Darling, panicked, & reverted to type by throwing money at the problem, (our money by the way ) instead of perhaps trying to manage the situation.


    The US Treasury dept. interfered' some will say 'intervened', in the massive US 'top up' mortgage market ( where borrowers basically had borrowed the deposit on their homes and which inflation had normally covered over a period ) and they would normally remortgage their property to cover both loans with enough equity still left in the property to give the remortgage lender comfort, but all of a sudden, remortgaging was not available so the US borrowers could not re-mortgage these top up loans to lower rates when the loans came to maturity, which traditionally they had been able to do


    Now, not only were they stuck with the two loans ie top up and mortgage, but they couldn't afford to pay the New 'much high rates/payments on the original top up loans, so they were in deep trouble and falling behind with their payments , and repossession became the name of the game with the result that a whole bunch of toxic mortgages were created 'in an instant’ , from what were AAA rated mortgages, many of which were held as assets by British Banks on a 'swop' basis.


    The US Government created this situation , some say justifiably, others say through ignorance, but not repeat not U.K. banks.


    The effect of this US Government intervention was that several US lenders had their AAA credit rated loans ( which other lenders inc some in the U.K., were using as security, as mentioned above ) down valued overnight to sub- prime, which meant that the other lenders inc. British Banks were "shafted", by virtue of the security they 'bought ' in good faith, at AAA rates, now being rated as ZZZ ( or Sh1t, Sh1t, Sh1t, as it is known in financial circles !


    Secondly, Gordo and the UK Government Treasury Team, caused even more panic in the financial markets by running around like headless chickens, and the domino effect quickly began in the banking sector, with the government not just 'not knowing' but 'frankly' not understanding what to do, & as already mentioned, they panicked even more, very quickly resorted to type, & did the only thing they knew "use taxpayer's money", in this case, to bail out the banks which were likely to topple, rather than perhaps letting one or two go down, and waiting for the results, but no, panic it was !


    Where were the Tories ! Well out in the cold of opposition for a full 13 years or so before the crisis , although to read some reports you wouldn't think so - yes, it was a full 13 years before they could stop the rot, and blaming the Tories for shortages, food banks ( which Labour introduced) the weather , anything and everything in fact, when Labour was in power for 13 years, and left the incoming Government without funds, is completely & utterly brainless.
    Phantom - yes- my point is money creation should not be achieved through commercial entities 'lending'. The example you point to with the margin on goods is a little different - when you go and buy a loaf of bread from *****, they actually have a loaf of bread for you to buy. Banks don't actually lend you their own, or savers money. It would be a different case if ***** had a magic loaf of bread making wand and it simply appeared from nothing! Similarly, a mobile telephone, laptop etc. I pay for these items, but I get something of value. A mobile telephone allows me to make and receive calls, a laptop allows me (in my line or work) to earn a living. Bricks allow me to build a house etc - things of value. The telephone supports my labour, which in turn earns me money. BoE notes (empty promises) are based on a lie. Strangely, if you fail to honour the promise of a promissory note (which is what a tenner really is!) there re consequences. Why not the BoE - they are a company and unless I am wrong, a company enjoys the rights and privileges of a person, and a person should therefore enjoy the rights and privileges of a company. They do not. Don't believe the BoE is a company, look it up. Don't quote me, but it is company registration 000043 (or something) with companies house.

    As for lending etc - I differ from you in that my laptop, car, home etc is paid for. I do not have a credit card, overdraft or loan.

    As for the money creation in the economy, the bank of England (which is a company) works in exactly the same way as the commercial banks do. The money is based on nothing.

    Let me ask you this. Why do we pay interest. Interest is not charged as a security against defaults (they may calculate a rate based on a risk of default, but it is not a security- if it were then the banks would surely return this after the loan is paid, as there is no further risk to them). Is it charged to compensate the banks for the lack of use of their asset (the money) whilst it is with you? No, as they don't lend you anything (in fact, if you study the accounting entries, it actually appears that the loan applicant actually funds the deal).

    Before you simply respond with an outright attack (which tends to happen) - ask yourself what the bank of England actually is. It now has a single shareholder, the uk government, but this was not always the case. The government do not run the bank, look at those that do - they represent many private companies. Look at the history. You talk about the US government, yes they are in no better position. Sadly, I can name 3 presidents who tried to change the system for the better, returning money creation to the people (not the private, in their case, Federal Reserve and its predecessors). Abraham Lincoln, John F Kennedy and Regan. The main difference, Regan survived the attempt on his life. I do not believe in coincidence, so when I see that (very quietly) the executive order by Kennedy to restrict 'the fed' was repealed I start to suspect things.

    As for the UK banks, they are as guilty as their American counterparts. I won't mention which ones, but there are some particularly bad examples on our shores.

  4. #43
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    Quote Originally Posted by Jinset View Post
    Last speech i have heard from the EU meps was "the best deal for the UK is to withdrawn from the EU". I wonder who will be the "new" trading partners the UK will have and under what agreements.
    USA will probably make an amazing trade deal with the UK.

    I hope it happens.

  5. #44
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    Quote Originally Posted by Junckrfu View Post
    USA will probably make an amazing trade deal with the UK.

    I hope it happens.
    It will be amazing for American and disastrous for Britain.

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