UK National Debt Part Two.

In Part One I raised the subject of National Debt and suggested that a World Financial Transparency Era would not be amiss. As the financial explosion/implosion happened in 2007 with the instantaneousness that those words so dramatically describe, I came to think that the glib spin words "credit crunch" and "economic slowdown" should be replaced with the truly descriptive "World Financial Armageddon".
As the true magnitude of the economic devastation being created became apparent, in the after shocks, I wrote to an acquaintance and commented that we had both served in the largest world war ever and we were now in a recession that was likely to be the largest the world has seen. The National Debt that is now being carried by many major economies only reinforces a long held belief that the last couple of years may well come to be regarded as a watershed moment in how the world is run. I have a fervent hope that these changes, if they occur will be for the common good, and that the rioting being depicted on the streets in Greece, as I type this, is not a trailer for the immediate future.

Transparency in world finance may help to stop my mind from boggling at the scope for Creative Accounting, balance sheet fudging and outright theft that must have been spawned by the bailing out of banks by some of the world's governments. There must have been plenty of scope as "toxic" assets were not declared or were added to before being sold off. Our tax payers now own at least one bank outright and have substantial amounts of stock in others. Are any of our banks and other financial institutions borrowing money at 0.5 % and has some of that money been used to buy bonds that earn higher rates of interest as they swell the National Debt?. Some of the money must have been used to support debit and credit cards that earn very high rates of interest. As well as resuming large bonus payouts to their top wizards some of these institutions may be able to get themselves out of hock and start the next money making - for them - boom,
boom, boom,Bomb.

This blog on finances will continue in Part Three.

Frederick W Gilling Sunday 02 May 2010