john white
25-04-2007, 08:40 PM
I like to get around the place on 'tinternet, and I commonly try out lines of thinking and practise communication skills on "conventional" forums. Today I had a chance to write on the subject of banking, thought I'd share with you all
http://news.sky.com/skynews/article/0,,30400-1256664,00.html BoE Takes Property Blame
Updated: 13:33, Tuesday March 20, 2007
The group that decides the interest rate deliberately fuelled a consumer boom to boost house prices and personal debt so that "UK Plc" could avoid recession.
Former governor Edward George said the Monetary Policy Committee "did not have much of a choice" in the matter.
The MPC members were battling to use interest rates to prevent the UK being dragged into a worldwide economic slump, he explained.
And, he said, his legacy to the MPC - which decides the rate - was to "sort out" the problems that policy had caused.
Lord George - who headed the Bank for a decade until June 2003 - revealed that he knew the approach was not sustainable as he gave evidence to a committee of MPs.
The terrorist attacks on the US in September 2001 caused a stock market crash in the US, and a sharp fall in the global markets.
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"We only had two alternative ways of sustaining demand and keeping the economy moving forward: One was public spending and the other was consumption.
"We knew that we were having to stimulate consumer spending; we knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term.
"But for the time being, if we had not done that the UK economy would have gone into recession just as has the United States.
"That pushed up house prices, it increased household debt ... my legacy to the MPC if you like has been `sort that out'."
"We tried very hard not to do more than we needed to keep within the inflation target limits but we knew that that was going to cause problems later on which are still with us."
Concerns have been raised that the present official rate of inflation does not reflect the everyday experience of many voters.If this is true and the people that knew about it bought into property during this period with this knowledge, could this not be the biggest case of insider trading *ever*?
I don't consider this to be true in so much as I consider it to be a cover story
Highly regrettably, humanity is blighted by a general ignorance about the banking system and how it operates: generally we exist in a state of blind trust regarding banking and the power that control of the monetary system represents.
Especially, we are ignorant of the widespread practice of fractional reserve banking. In operation for over 300 years, fractional reserve banking allows the banks to create money by multiplying the assets the bank holds by a factor of ten (or more) when calculating how much money is available to be lent as loans. New money is not minted as notes or coins, but created as debts. The upshot of this is if I take out a mortgage for £100,000, only £10,000 pounds actually exists: the rest is credit created on my promise to repay the loan with the product of my work for the length of the loan, and of course, if I default, the bank gets to take my actual assets against the debt. It really is a stroke of the pen business
Generally, Gordon Brown's transfer of control of interest rates to the Bank of England is considered very positively, as a move that has brought great stability to the UK economy (politicians not being trustable with the nation’s finances. However, the upshot of this is that control of the economy has been surrendered from elected representatives and given over to un-elected non-representatives
In addition to this, we are generally ignorant that the Bank of England is neither owned by the government or by the crown, but is in fact a private company: a private company whose shareholders are protected by absolute secrecy. So in effect Gordon Brown handed over control of the economy to a private corporation, that the people have no oversight or democratic redress of whatsoever
In 1997, total indebtedness of the British people (mortgages, loans, credit cards) stood at 77 billion. Amazingly, ten years later banks are lending the same amount every two months: that is, over a billion pounds in debt is created out of "thin air" every single day. On the surface, this looks like good news, lots more money for people to buy goods and services: but is it?
Consider house prices: the cost of a family home has essentially trebled since 1997. In order to afford this level of debt, it is now common practise for both partners to have to work to service a debt based on lending an amount equal to six times joint annual income: even in the midst of the Thatcher years, most mortgages were no more than 3 times higher wage earners annual income: that is a massive increase in profits for the banks, or put another way, a massive increase in enservitude to the banking system. People consider the value of their homes to show how much better off they are. But again, is this true?
Lets say a home in 1997 cost £60,000, covering a quarter of an acre of land and constructed from 6000 bricks (with the value of a home commonly considered to be a 50/50 split between the worth of the building and the worth of the land it stands on). Such a home is more than likely worth in excess of £180,000 today. But does this show the value of the home has increased? A comparable home cannot be bought for £60,000. It’s still made of 6000 bricks and covers the same amount of land, and can only be purchased at a significant increase in liability of indebtedness. Could it not equally be said that the massive rise in house prices in fact shows the level of devaluation of the economy? An economy inflated not by the value of physical assets, but by debt created at minimal risk to the banks through fractional reserve banking?
Historically, there are parallels with our current situation. Banks, upon gaining control of interest rates, have usually made credit freely available for a period of about 20 years. Then, the banks simply turn off the tap, and cease making new credit freely available. The inevitable result is a massive foreclosure on debts, and real wealth (control of physical assets) being sucked into the banking system, making the people even more dependant on the money supply and willing to accept a society with far fewer basic protections and rights
Perhaps even more concerning is the fact that Britain’s gold reserves have been slowly removed from the country over the last ten years and removed to Europe to be put under the control of the EU: essentially these gold reserves were sold for credit (also produced out of thin air by the European banking system)
Could it be that the reasons politicians like Tony Blair are continuing to push forward plans for European integration with no concern for the opinions of the people is because the people will ultimately have little choice in the matter?
Should the UK economy collapse because the banks turn off the credit supply, and with no Gold reserve to back a re-floated pound, what other option would there be but to join the Euro immediately and irrevocably (with the total loss of parliamentary sovereignty?) In fact, would people, unable to perceive accurately the events that have led them to that place, and in there fear and distress about their future and security, not clamour and demand for just such a move?
There are wheels within wheels moving all around us
http://news.sky.com/skynews/article/0,,30400-1256664,00.html BoE Takes Property Blame
Updated: 13:33, Tuesday March 20, 2007
The group that decides the interest rate deliberately fuelled a consumer boom to boost house prices and personal debt so that "UK Plc" could avoid recession.
Former governor Edward George said the Monetary Policy Committee "did not have much of a choice" in the matter.
The MPC members were battling to use interest rates to prevent the UK being dragged into a worldwide economic slump, he explained.
And, he said, his legacy to the MPC - which decides the rate - was to "sort out" the problems that policy had caused.
Lord George - who headed the Bank for a decade until June 2003 - revealed that he knew the approach was not sustainable as he gave evidence to a committee of MPs.
The terrorist attacks on the US in September 2001 caused a stock market crash in the US, and a sharp fall in the global markets.
Advertisement
"We only had two alternative ways of sustaining demand and keeping the economy moving forward: One was public spending and the other was consumption.
"We knew that we were having to stimulate consumer spending; we knew we had pushed it up to levels which couldn't possibly be sustained into the medium and long term.
"But for the time being, if we had not done that the UK economy would have gone into recession just as has the United States.
"That pushed up house prices, it increased household debt ... my legacy to the MPC if you like has been `sort that out'."
"We tried very hard not to do more than we needed to keep within the inflation target limits but we knew that that was going to cause problems later on which are still with us."
Concerns have been raised that the present official rate of inflation does not reflect the everyday experience of many voters.If this is true and the people that knew about it bought into property during this period with this knowledge, could this not be the biggest case of insider trading *ever*?
I don't consider this to be true in so much as I consider it to be a cover story
Highly regrettably, humanity is blighted by a general ignorance about the banking system and how it operates: generally we exist in a state of blind trust regarding banking and the power that control of the monetary system represents.
Especially, we are ignorant of the widespread practice of fractional reserve banking. In operation for over 300 years, fractional reserve banking allows the banks to create money by multiplying the assets the bank holds by a factor of ten (or more) when calculating how much money is available to be lent as loans. New money is not minted as notes or coins, but created as debts. The upshot of this is if I take out a mortgage for £100,000, only £10,000 pounds actually exists: the rest is credit created on my promise to repay the loan with the product of my work for the length of the loan, and of course, if I default, the bank gets to take my actual assets against the debt. It really is a stroke of the pen business
Generally, Gordon Brown's transfer of control of interest rates to the Bank of England is considered very positively, as a move that has brought great stability to the UK economy (politicians not being trustable with the nation’s finances. However, the upshot of this is that control of the economy has been surrendered from elected representatives and given over to un-elected non-representatives
In addition to this, we are generally ignorant that the Bank of England is neither owned by the government or by the crown, but is in fact a private company: a private company whose shareholders are protected by absolute secrecy. So in effect Gordon Brown handed over control of the economy to a private corporation, that the people have no oversight or democratic redress of whatsoever
In 1997, total indebtedness of the British people (mortgages, loans, credit cards) stood at 77 billion. Amazingly, ten years later banks are lending the same amount every two months: that is, over a billion pounds in debt is created out of "thin air" every single day. On the surface, this looks like good news, lots more money for people to buy goods and services: but is it?
Consider house prices: the cost of a family home has essentially trebled since 1997. In order to afford this level of debt, it is now common practise for both partners to have to work to service a debt based on lending an amount equal to six times joint annual income: even in the midst of the Thatcher years, most mortgages were no more than 3 times higher wage earners annual income: that is a massive increase in profits for the banks, or put another way, a massive increase in enservitude to the banking system. People consider the value of their homes to show how much better off they are. But again, is this true?
Lets say a home in 1997 cost £60,000, covering a quarter of an acre of land and constructed from 6000 bricks (with the value of a home commonly considered to be a 50/50 split between the worth of the building and the worth of the land it stands on). Such a home is more than likely worth in excess of £180,000 today. But does this show the value of the home has increased? A comparable home cannot be bought for £60,000. It’s still made of 6000 bricks and covers the same amount of land, and can only be purchased at a significant increase in liability of indebtedness. Could it not equally be said that the massive rise in house prices in fact shows the level of devaluation of the economy? An economy inflated not by the value of physical assets, but by debt created at minimal risk to the banks through fractional reserve banking?
Historically, there are parallels with our current situation. Banks, upon gaining control of interest rates, have usually made credit freely available for a period of about 20 years. Then, the banks simply turn off the tap, and cease making new credit freely available. The inevitable result is a massive foreclosure on debts, and real wealth (control of physical assets) being sucked into the banking system, making the people even more dependant on the money supply and willing to accept a society with far fewer basic protections and rights
Perhaps even more concerning is the fact that Britain’s gold reserves have been slowly removed from the country over the last ten years and removed to Europe to be put under the control of the EU: essentially these gold reserves were sold for credit (also produced out of thin air by the European banking system)
Could it be that the reasons politicians like Tony Blair are continuing to push forward plans for European integration with no concern for the opinions of the people is because the people will ultimately have little choice in the matter?
Should the UK economy collapse because the banks turn off the credit supply, and with no Gold reserve to back a re-floated pound, what other option would there be but to join the Euro immediately and irrevocably (with the total loss of parliamentary sovereignty?) In fact, would people, unable to perceive accurately the events that have led them to that place, and in there fear and distress about their future and security, not clamour and demand for just such a move?
There are wheels within wheels moving all around us