UK National Debt. Part Four.

I seem to have drifted away from UK National Debt into World Finance but, of course, there is a close relationship between the two subjects. For several months I have been wondering about,
"Where Does The Money Come From"? The "money" being [1] the Billions distributed in cash or stock to thousands of employees of financial institutions, as well as the CEOs etc of public companies, in the form of bonuses. [2] The Millions accrued by top flight sports stars, in salaries, prize money and endorsements. [3] The Millions, often multi, earned by entrepreneurs, presenters, performers and artistes in the broad spectrum of entertainment, one example, covered by "broad" being Formula One Racing. [4] I will include Authors as a group, a few of them are multi million earners but, I think, it is fairly easy to see where most of their "money" comes from.

In many cases one can accurately surmise that the "money" comes straight out of the pockets, often very willingly even eagerly, of the population. Conversely it is not easy to see where the Billions of units of"money", made by elements of the financial institutions, come from. Can one argue that gains, by individuals or organisations must imply that other individuals or organisations have suffered exactly matching losses? If the question Where does the money come from? is answered I can then pose the question "Where does the "money" go"? I note that one answer to that is that some of it is given away. Page 8 of The Sunday Times RICH LIST 2010 is headed "Philanthropy hits a high note". On page 9 "The Sunday Times Giving List" gives details of donations to various charities by some of the UK's wealthiest people. A truly mind blowing amount of 531.2 million pounds topped the list and that was given away by one man. The close "runners up" amounts, in millions were; 470, 294.2, 275.6 and 103.4, when I read these amounts out to my wife I felt quite choked emotionally. I think it can be assumed that a very high percentage of that money will find its way fairly quickly into the down to earth economy, this to the benefit of the general population.

This highly commendable philanthropic route will not be followed by the trillions of units of hard currency owned by individuals or controlled by organisations whose aim is to use it to generate even more billions. This headlong pursuit of the quick billion or so resulted in the World Financial Armageddon, it is not surprising that world leaders are now, at least talking about taxing bank profits as a result of the cookie crumbling in such a strange way, that being Governments having to step in to prevent the collapse of financial institutions that are "Too Big To Be Allowed To Fail". What a dream scenario for those such institutions. If they take a high risk and lose the taxpayer will bail them out, but if they win that will justify massive bonus handouts to their top personnel.

In all seriousness I think the ultimate solution is that, in a concerted action, all of the countries in the world should nationalise their banks. It just has to be possible, for an internationally accepted modus operandi to be legalised, that will enable every country to take control of all banking activities in their country.

This idea will be pursued in my next pipe dream blog, "Controlling World Finance"

Frederick W Gilling Tuesday 04 May 2010