Friday, 12 September 2008
If Brown is crazy can a King help?
Gordon's weak policies are doing nothing to help the UK. Perhaps that is too much, as least he realises the credit card is now full and there is to be no more reckless spending.
However the damage is done. In so many areas the Uk is in a parlous economic position. Let's review a few of the things mentioned by a real economic brain, Mervyn King, yesterday:
- The Government want to extend the special liquidity scheme, which Mervyn King wants to stop and replace with something more sensible. Banks have now borrowed about £170 billion (per my good info). Free money is a nice one for them, but is not really the answer long-term.
- He warns the Government off the idea of nationalised mortgages (too late, Northern Rock!).
- Spending his way out of recession is only going to sink our markets, thereby increasing bond prices and further increasing national debt (our children's future deprived, remember). Yet Labour will have to do this to buy back some client votes.
- Asset backed securities will not come back during a falling housing market. Thus banking models need to change. Will Labour let a big bank go to the wall, err..see Northern Wreck.
Sane ideas all of them, hopefully the Government will listen, doubtful though. However, lets hope King can persuade his committee to vote for lower interest rates in the near future. 2009 looks dark enough as it is.