World Financial Armageddon. Part three.

World Financial Armageddon. Part three, condensed for blog.

Knowing my interest in politics and world finance a friend suggested that I should read "Who Runs This Place", this was written by the late Mr Anthony Sampson and published by John Murray in 2004. As I did not want my thinking to be influenced I did not read the book until after drafting out the short chapters of "A Musing Layman" from which I condensed blogs for my blogging site. Pages 247 to 276, and more, in "Who Runs This Place" give thought proviking insight into the various facets of how money is used [misused?] with the sole aim of making more money, often without any regard to the misery it can create.

Mr Sampson drew attention to the MPs' SelectCommittee on the Treasury. The Chief Executives of the big banks were questioned in connection with many aspects of finance, including credit cards, with the base rate at 3.5 percent one bank was charging 17,9 percent interest. [In the last few days with the bank rate at 0.5 percent the same complaints are being voiced.] This particular report was in respect of the Committee's meeting in October 2003. Surely at that time many high ranking financial officials, both in government and private institutions, must have known that a bubble was approaching bursting point. If they knew and did nothing about it they were drastically at fault, if they did not know then they were also drastically at fault, arguably even more so than those that did know. Irregardless of whose fault it was the taxplayers of the world's biggest economies are having to find the money to save gigantic banks from collapsing. When the dust settles the whys and wherefores of this bail out will provide the material for many learned papers.

The world has experienced the astronomical changes wrought by the French and Russian revolutions, these were events, basically, in individual countries. In my opinion, through present governments or ballot boxes, the time is ripe for every major economy to stage a world financial revolution by nationalising all of its major indigenous banks. In many major countries the taxpayers, because of the World Financial Armageddon, already own high percentages of large banks. A big surprise to me, and I suggest to many people, is that governments in virtual control of banks have not cracked the whip and told them what to do. In too many instances large banks and financial institutions have failed in at least one primary duty and that is to safeguard the money that belongs to their customers. I would, however, advise extreme caution in lending to small businesses. My reason for this is that many small businesses owed their success, or even creation, to the freak circumstances generated by the heady spend, spend and spend syndrome, fuelled for several years, by a seemingly never ending supply of borrowed money. Their chances of surviving in a harsher economic climate could well be slim. The reasoning for this may well be applicable to businesses other than small. This blog will be continued in World Financial Armageddon. Part four.

Frederick W Gilling Monday 03 August 2009