An addendum to Friday’s post, on 7,11,08

I am neither an economist, nor have I got a financial background, and perhaps that is the reason why I find our current financial situation to be surreal. I have now seen the future I referred to in ‘Crazy Mathematics’ and I still don’t understand it, but feel that, as I, and my family, will be helping to foot the bill in our taxes for the payment of interest and capital on these colossal loans, I’m entitled to some explanation that I can understand.

As I see it, millions borrowed money they couldn’t pay back, and thousands speculated rashly on the stock exchanges round the world. During that period money was flowing around the world and between banks, as tangible currency. Suddenly, virtually overnight, in a high proportion of the more wealthy countries, the money seemed to disappear down a black hole, irretrievably. There are two things about this that defeat me logically, the first is how it could go as it did, so suddenly, and apparently without trace, and without any prior indication that this was a possibility. The second imponderable is where the hell has it gone? I don’t know; you probably don’t know, even if you are the manager of a local bank, you don’t know, because if you did, you would have been bound to tell somebody, and then we all would ultimately know, because it would be on TV remorselessly. You would think at least at the Treasury, the Bank of England, and the chancellors in all these countries would know, and somebody would spill the beans. I cannot help but believe, because all these eminent financiers seem to be running around like chickens with their heads cut off, that they don’t know either, but how can that be?

Our taxes are maintaining the governments which allowed this debacle to take place, despite all the warnings that they must have been getting with reasons explained, but chose to ignore them, across the world. We trusted the banks with our savings as shares, some companies trusted financiers with their workforces’ pensions, and yet nobody has told us where all this money, that we personally have lost, has gone, and how come we lost it? This raises the burning question of what are the chances of these trillions going the same way? If the system in the past was wrong, why is what is now being perpetrated so okay? People are losing their jobs mainly because the banks are hanging on to the money that we allegedly have loaned them, instead of supporting the small and medium-sized commercial enterprises that have a legitimate case for borrowing, and a high potential for repayment and thus save jobs. It is our money over the years that is going to be required to pay back the interest and capital, not the banks, as they are totally dependent on us. One aspect of this that I also find impossible to understand, is why the leaders of the parties in Westminster are now talking about reducing the very taxes that I would have assumed were necessary to maintain the repayments that I have mentioned, and to prevent our standard of living being whittled away with time.

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