“..pretty bubbles in the sky. ” !!

I saw this comment in a blog about yesterday’s emergency Budget: "Darling has increased or matched decreases with increases! " I sat here shaking my head in disbelief – Is nt that what a budget is? Balancing our expenditure against our income? Being the simple bloke I am I prefer to make my own mind up about the chaos around me and not resort to all the experts who like to have their 30 seconds of fame on the various TV channels.
Darling the politician, ( not the soldier charecter in ‘Blackadder’, although come to think they do bear the same trait:Little boys lost in a man’s world, contriving not to face the enemy head on), has introduced his cure for the British economy. Her Majesty’s opposition, who for the last 10 years oppose for the sake of it, yet again have no sound economic arguments as an alternative.
The current world crisis began in America when loans were given to people who had no possible chance of repaying them. The loan sharks,[Whoops], sorry, banks then sold these debts to other financial institutes who in turn conned the worlds spivs, errr brokers, to guarentee the original loans. In the last 12 months banks have realised what most sensible people learn from the moment they get there first $ or £ pocket money. You can only spend what you have in your hand. Loans to pay loans, dubious banking practises, economic recession. . . ring any bells ??
The South Sea Bubble of 1720, was an economic situation that occurred through speculation in the stock of The South Sea Company. [ I will relate here only the economic story ],The company had been granted a monopoly to trade with South America under a treaty with Spain while the company assumed the national debt of England. Shares in the company were "sold" to politicians at the current market price; however, rather than paying for the shares, these lucky recipients simply held on to what shares they had been offered, "sold" them back to the company when and as they chose, and received as ‘profit’ the increase in market price. This method, while winning over the heads of government, the King’s mistress, etc., also had the advantage of binding their interests to the interests of the Company: in order to secure their own profits, they had to help drive up the stock. Meanwhile, by publicising the names of their elite stockholders, the Company managed to clothe itself in an aura of legitimacy, which attracted and kept other buyers.The price of the stock went up over the course of a single year from £100 a share to over £1000 per share. Its success caused a country-wide frenzy as all types of people – from peasants to lords – developed a feverish interest in investing; in South Seas primarily, but in stocks generally. The price finally reached £1,000 in early August and the level of selling was such that the price started to fall, dropping back to one hundred pounds per share before the year was out, triggering bankruptcies amongst those who had bought on credit, and increasing selling, even short sellingselling borrowed shares in the hope of buying them back at a profit if the price falls. In August 1720 the first of the installment payments of the first and second money subscriptions on new issues of South Sea stock were due. Earlier in the year Blunt had come up with an idea to prop up the share price — the company would lend people money to buy its shares. As a result, a lot of shareholders could not pay for their shares other than by selling them. Furthermore, the scramble for liquidity appeared internationally as "bubbles" were also ending in Europe. The collapse coincided with the fall of the Mississippi Scheme of John Law in France. As a result, the price of South Sea shares began to decline. By the end of September the stock had fallen to £150. The company failures now extended to banks and goldsmiths as they could not collect loans made on the stock, and thousands of individuals were ruined (including many members of the aristocracy). With investors outraged, Parliament was recalled in December and an investigation began. To restore public confidence under the guidance of the prime minister, Parliament attempted to deal with the financial crisis. The estates of the directors of the company were confiscated and used to relieve the suffering of the victims, and the stock of the South Sea Company was divided between the Bank of England and East India Company. [ie Nationalised].

The quagmire that is the world’s capitalist system has for the past 10 – 15 years been floating on a plastic raft of credit. Furthur more when Washington begins to nationalise banks farms and its car industry I for one have got the message ! Back here what has our darling chancellor done to squeeze credit from the system? Why, he has borrowed £120 000,000,000 !!!! From Monday you will be pleased to know,that when you flash your credit card for every £100 you "borrow" the credit card company will only charge you £97.50! What of taxation? why people earning £150,000 + ie footballers and bankers may be taxed at 45p in the £ . . .in two years time! Which, dear reader, just happens to be after our next general election! You can have a grant to insulate your homes – not I suggest against the economic storm but against powercuts and an energy deficit. I see no sense in building more houses, schools and hospitals if we have no power stations to run the electrical equipment inside them. The good news for China and the other asian economies is that we will need lots of heavy duffle coats and blankets to keep out the winter cold!



2 thoughts on ““..pretty bubbles in the sky. ” !!

  1. at this stage of your life, what can you expect from the government?
    and by the way, you might not have a clue what deep shit china is sinking into now………

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