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Listed below are comments made by FiniteResources between Friday, 19th December 2008 and Sunday, 20th December 2009.

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Butterworth's Jerusalem: the full English 11:40pm on 20 Dec 2009 11.

'A friend of mine did a 6 year study into near death experiences within a clinical environment and she is convinced that we are on the verge of some new understanding of ourselves and our place in the Universe.'

She is right. Our place in the universe will soon be like that of the full stop at the end of this sentence
Banks: The world is weary of the past, but boy, was it exciting! 9:03pm on 25 Nov 2009 Clearly the ATM network is a point of vulnerability that the Gummint needs to address - assuming that it hasn't already done so. But how credible was this 'threat'?

Have you followed this up with, say, Link Network to see whether two banks alone could 'switch off' their ATMs - short of pulling the fuses at the branches themselves? Agreed, all it would have taken at the time to cause chaos would have been the mere rumour of a hole-in-the-wall freeze-up...
Exceptional times 8:35pm on 02 Sep 2009 #53 wrote:

"Fast foward 10 years and most people will be paying a much larger percentage of their monthly salary on their mortgage payments because house prices have risen much faster than wages!"

Check out the Nationwide house price affordability indices at http://www.nationwide.co.uk/hpi/historical.htm. On past trends, house prices look set to keep on falling, or at best stagnating, for a long time to come - possibly another 8-10 years.

But you're probably right about wages not keeping pace with house prices. This isn't an ordinary recession where inflation takes a short breather: it is already turning into full blown deflation.

As deflation sucks money out of the global economy, there will be less money to pay people. If wages fall faster than house prices, which is more than possible, houses will become increasingly unaffordable even to those on average incomes - just like at the top of the boom but without the option of getting a mortgage at all, let alone a no-docs, 125% loan from Northern Rock or whatever.

The Government can no longer keep up the trick of transferring real wealth to itself and its friends while maintaining a facsimile of prosperity for the rest of society by encouraging us to make up the shortfall in real money by massive borrowing. We're all going to start feeling a lot poorer soon - meanwhile the present Government is busy throwing our children's futures away in a desperate attempt to hold up the façade until after the next election.
Exceptional times 2:14pm on 02 Sep 2009 All money is debt. The only way for me to have a pound in my pocket is for me or someone else to borrow it from a bank. Apart from the relatively tiny amount of money circulating as notes and coins or held in current accounts, all money only exists as electronic ones and zeroes on bank computers in the form of credit/debt depending on what side of the coin you're looking at.

And, whatever you may believe, it's all the banks' money, not ours.

The big problem is that the banks only create the principal that they lend out, not the interest. That has to be paid for by 'growing' the economy. And what does 'growing the economy' mean? It means millions of people (called 'consumers' by the banks and economists) taking on more debt.

As far as the banks are concerned, the 'real economy' is just a kind of hen house: it's there to keep the 'consumers' housed, fed and watered so we can take on more debt.

Thanks to the deregulation of the last two decades, the banks have been able to keep back more and more of the debt-money for themselves, for use in games of Derivatives Poker and the like. This means that 'consumers' don't even get to use all the money they're paying interest on, and so have to resort to - you've got it - borrowing even more. (Society experiences these debt flows at a collective, not individual level).

Like a Ponzi scheme, it produces fountains of wealth for those at the top . . . until the real economy is totally exhausted.

In a 'normal' recession, the poor old draught animals at the bottom get to take a breather while the Government feeds the banks with low interest rates, bailouts,and QE if necessary, until the whole shebang is able to pold on again.

But this isn't a normal recession. This time the banks have flogged the real economy to the brink of death. At the same time, through their incredible ineptness at Derivatives Poker, they've actually poured more money down a black hole than the entire planet is capable of borrowing into existence over the next decade or so. Even Ben Bernanke's helicopter-borne money printing presses will never keep up with the rate of destruction of debt.

It's a bit late in the day for Stephanie to write: "But Lord, please don't send us there quite yet." We're already up to our necks in it.

The roaring noise ahead isn't a bit cheer greeting the return of business as usual. It's a very, very, big waterfall.
Recovery risk for government borrowing 09:15am on 21 Jul 2009 "a funding crisis [is] a very remote danger - largely because the market for gilts is much wider and deeper than it was."

It had better be. Sprott Asset Management of Ontario has calculated that in the US, for instance, there is not enough money in the domestic economy to fund the US's increased need to issue debt - and the US 'only' needs to borrow three times more than normal, whereas the UK needs to up its borrowing by a factor of four.

AAA ratings count for little these days. With every major Western economy chasing after their cash, overseas investors - now the only lenders of last resort - can sit back and wait for borrowers to bid up interest rates to sell their debt.

Mr Stheeman's comment in his interview, to the effect that many countries are "facing unique challenges of a similar nature" will surely become an enduring icon of Mandarin-speak. I imagine a policeman surveying the wreckage of a monumental motorway pile-up; hundreds dead, thousands injured, telling the news cameras: "It seems that a lot of drivers found themselves facing unique challenges of a similar nature, all at the same time."

Can anyone see how the idea of solving a debt crisis by trying to sell much, much more debt won't end badly?
Next week's banking White Paper turns out a bit "green" 10:00pm on 08 Jul 2009 "The problem is we already know that any recovery is going to be highly inflationary;"

So little likelihood of inflation then.
My impression of the summit so far 11:30pm on 01 Apr 2009 "...there is a centre-left, centre-right consensus on display here that the poor, the powerless and the ordinary Joe has to be protected from the heavy impact of stagnation."

You can count among those Joes the millions of US taxpayers who are being systematically robbed by the bailout of the big financial institutions orchestrated by Obama's appointee Geithner.

Joe Six Pack's main hope of seeing any of his money back was for the US banks to sucker Europe into buying their next round of hallucinated "wealth" (think of AIG's London operation during the bubble).

Now that France and Germany have slammed the door on that option, Obama will have to choose between his Wall Street buddies and his people.

Whichever way he goes will show the US to be what it is: a poorer and less economically powerful country. (Of course, it will be in good company.)
We're in QE street now! 4:25pm on 05 Mar 2009 I've managed to get hold of a long out of print book by Adam Fergusson called "When money dies - the nightmare of the Weimar collapse."

I think the main point is that the point at which QE _stops_ matters more than when it starts.

Secondly, can someone explain whether this new money is debt-free or the conventional kind?

Lastly, money is only a representation of work and 90% of work in our economy is done by fossil fuels, mainly oil and gas. Has anyone at the BoE or Westminster done the maths or checked to see whether UK plc will be able to access sufficient fossil fuels AND pony up the wherewithal to acquire them.

If not, the only answer may be to print and print and print. In which case, Fergusson's book might be worth reprinting as a how-to guide for the people formerly known as UK consumers.
Unfair? We may have to hope so 6:02pm on 09 Feb 2009 The problem isn't lack of lending but lack of borrowing - specifically borrowing by private citizens (I refuse to refer to people as "consumers", however firmly the lunatic priests formerly known as economists are hooked on that world view). Sure, the plight of credit-starved SMEs is real enough but a debt-led "recovery" for the UK would have to be driven by personal borrowing.

Unfortunately for our hapless Government, the majority of British people now fall into one of four categories: already maxed out; feeling too vulnerable to borrow more; congenitally non-disposed to borrow in the first place, and absolutely unwilling to borrow in order to perpetuate the existence of a banking system that has in recent years utterly abused its privileged position as creator (through lending) and owner (through the money-as-debt system) of 97% of the UK's money.

People understand the banks' culpability for the credit binge and present bust instinctively. You don't need to know the rules of baseball to know who won the World Series. People know that they were conned into massively overpaying for houses (ludicrous prices + mortgage interest) and new cars (overpriced extras, plummeting residual value at the best of times + loan interest), thus remaining cash-poor while the bankers partied on at the expense of their customers' pensions and our children's standard of living.

Are people saying: "Let's hold our noses and pay these bankers' bonuses, lest all this "talent" we need for things to get better goes elsewhere?" Hardly For one thing, the "talent" has nowhere else to go.

Effectively, there is a debt boycott developing - "can't borrow, won't borrow." Preserving the existing banks in the face of mounting public anger will only make matters worse.

If the PM really wants to prove that he is something more than a remote-controlled frontman for the Square Mile, he might consider forcing the banks to hand over control of the payment clearing system and then use it to set up a completely new national bank unencumbered by toxic assets. The existing institutions would, of course, sink or swim according to the degree of buoyancy bequeathed to them over the past eight years by their very wonderful, hugely bonus-enriched "top talent" .

Another advantage of starting a new bank would be the opportunity it would allow to reform the debt-money system - at least to the point of rescuing the UK from its current predicament of having to try to restart private borrowing as a way out of Depression - a sure-fire death spiral if ever there was one.
Fixing the Jag 12:14pm on 19 Dec 2008 To #333

It's not a car industry-wide problem.

It's much bigger than that.

Too big to fail? No, impossible to save.

Why? Well, where are the thousands marching down Whitehall chanting "We want cars"?

That said, there is a possible justification for artificially preserving elements of the existing car industry. That is to protect its diversified engineering suppliers. The UK has a clear strategic need of such companies. It needs to build the post-cheap-oil, post-credit-fuelled-happy-motoring Britain that we'll be living in soon - far sooner than most people think.

As long as LR and Jaguar realise that they're not being bailed out to prolong their own pointless and ultimately damaging existences, they can have some of my taxes.

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