Where is my money Mr King?
Billions upon Billions of our wealth has been poured into the banks, private banks. I want to know exactly where it is, what is being done with it and by whom. If Mr King cannot or will not tell me, then he or those with my money have something ugly they are hiding.
We were told putting money in to the banking system would stabilize the banks, kick-start lending and lead to a recovery in the real economy. None of these things has happened. It is no good saying, as I have heard various politicians and bankers do, that this is because a global downturn has changed the circumstances. That is circular rubbish. The bail out policy, we were told, was what would avoid a global downturn. Obviously it didn’t. And yet the same lost little men want to repeat the failure at even greater cost.
We have been told over and over that if we did not bail out the banks then, among other apocalyptic threats, all out pensions would be ruined. Our pensions?
Haven’t state pensions already been cut in every country that has bailed out its banks? The pensionable age has been raised and various professional pensions (police etc) have been cut? In countries further along the road we are on – and don’t kid yourself we are on the same road, like Greece, state pensions have been slashed.
These austerity measure have all been precipitated by the financial crisis. So the real situation is that the State pension – that is paid for with your taxes, your life’s work, is being cut in order to save PRIVATE pensions held in private pension companies.
So once again I want to know where my money has gone. Billions in new capital were put in to RBS. What happened to it? Where has that money gone? It obviously did not do any of the things our leaders and bankers said it would because three years on, tens of billions later RBS is so weak and insolvent that Moodys downgrades it along with Lloyds. The downgrade makes it harder for the banks to borrow money and more expensive for them to insure their debts.
It is worth noting that theseare the two banks which put £280 Billion of bad debts in to teh Government’s Asset Protection Scheme. Is it coincidence that the head of that scheme announced he is leaving and it has been reported that the scheme would be wound down? I wobnder if we’ll find that scheme is wound down but a new worse one set up?
Three years of failed policy and many billions of public money pissed away and the UK’s most unstable and insolvent banks are a little more unstable and insolvent than they were.
If the government of a country puts billions of pounds, euros or dollars of it citizens wealth in to private banks why are the people of that nation not allowed to know what has been done with it all? If Dexia now needs tens of billions more to stay alive don’t the citizenry of Belgium France and America who already sank billions in to the bank have a right to know where all that money went?
What is the argument that says they have no right to know? I want a banker or a politician to tell me in public why I’m not allowed to know where billions of my money has gone. Step up Mr King.
You know where it all is. It’s at the Bank of England.
Look on the Bank Return under ‘Bank Reserves’ and ‘Other Liabilities’. Observe how the original QE simply replaced the emergency funding put in place rather than added anything new. Observe how QE has reversed itself to the tune of £23bn over the last eighteen months.
And that’s because there is no money going into the economy. Central bank money never leaves and can never leave the Bank of England’s balance sheet.
The effect on the real economy can only come from spending. And nobody is borrowing anything more at the moment. So the transmission mechanism – cheaper money inducing borrowing and spending in the private sector – is bust.
Here’s the pretty picture http://www.bankofengland.co.uk/markets/images/liabilities_assets.jpg
Neil,
You are right there. Banks put money back at the central banks. And it is not only banks. Siemens pulled all of their money out of Societe generale in France and placed it direct with the ECB. What a vote of confidence that is in other European banks.
See the link here:
http://www.reuters.com/article/2011/09/20/us-siemens-idUSTRE78J40F20110920
In total they took 500 million euro’s out of SocGen. Siemens has with the ECB 4-6 billion euro’s. That is 4-6 billion euro’s that is inactive.
Banks are too afraid to lend and business are now too afraid to deposit at banks. Basically there is a lot of inactive money. QE will not help much when these flows are in place.
The global stimulus has run its course, further deleveraging is ahead. It will suck wealth from everywhere.
RBS is a Deep Dark place.
The west has become addicted to the oil spice – it seems incapable of doing anything without its motive power.
Not even the BoE via the treasuary will release funds to increase the countries core capital base – maybe because there is nobody around with the expertise to use the funds wisely anymore.
Remember the goverments do not control the nations utilties so if they spend money into the economy it will be probally blown on fast cars & fast women.
I would like to see at least one big totemic engineering feat that can be controlled with one elite staff unit so as to pump money into the economy & increase its real capital base – think Irish sea tunnel or some other such thing. – but if they spend any money into this decapitalized starved medium it could create a massive inflationary shock.
The emaciated patient seems happy to slowly starve rather then risk sudden death if it eats a steak.
I object to saving private pension funds with taxpayer money. I decided 25 years ago not to invest in a private pension because I thought it was a stupid long term risk, I knew the pension company’s would need a bailout at some point. I was also certain that I would be as sick as a parrot if I lost all my pension money in some ponzi scam, so I drank it instead. Why should I bail out folk that were stupid enough to trust private company’s with their pension funds.
I’m just kidding, I just like to take the piss out of right wing arguments
Richard.
An excellent comment, you just need to edit out the last line. It is not necessary.
The problem is simple. States are trying to bail out a banking sector that is by many multiples bigger than the state. To even attempt to do it is stark staring raving bibbling lunacy. You would think that banks being so much bigger and so much wiser would be bailing out states, logically speaking.
Money only exists if underwritten by a sovereign state. The deriative currency the banks have created is underwritten by precisely sweet FA. So the banks beg our currency to prop up their utterly worthless and socially useless currency.
This is not good for my blood pressure.
bill40: “States are trying to bail out a banking sector that is by many multiples bigger than the state.”
Bullseye.
Meanwhile Fitch has downgraded Italy (one notch) and Spain (two). Portugal is unchanged, but outlook for all three is negative.
@Neil
The US treasuary needs to destabilize Europe a little bit more so that it can drive people into the arms of the dollar.
But the euro area balance sheet has increased somewhat nearly up 300 billion from 2 trillion in a few months.
This gives its base more stability.
The revaluation of Gold last week means that euro area gold covers physical notes at a 2:1 ratio – the highest ratio ever I think.
This is a limited war between the US treasuary & the BIS.
Can you please explain further, I am not understanding the UST/BIS war…
Yossarian, UST = US Treasury, BIS = Bank for International Settlements (which I was unaware of before). But someone else will have to explain what’s going on.
Uh, no, Dork. The US is trying to get Europe to do what the US did, massive bailout of banks (still ongoing in US). US banks level of risk in EU banks is $640 billion – or more. When Geithner invited himself to Eruofin meeting he urged a TARP for EZ. These criminals don’t care about anything in this crisis except saving the banks.
US wants a weaker dollar just as the EZ does. Trouble with that strategy is China keeps buying dollars and euros with plenty of excess reserves of both currencies – keeps the yuan undervalued, you know.
The long term US hostility to EU has everything to do with the EU’s social democracies, and nothing to do with disagreements between BIS and US Treasury.
Hello okie farmer,
Welcome. I tend to agree with your assessment of the root casue of the hostility between Washington and Europe. I would add that DC is pissed as hell that Berlin finally stood up and said, “Actually we don’t take orders from you any more.” By my reckoning that happened at the G20 of ’10.
As for the US Treasurey, the FED and BIS there may well be disagreements I know nothing of. But to my mind they are fundamentally of like mind and outlook. On the same side broadly.
These first 2 links show views about the extent of the bailout
http://www.money.co.uk/article/1002877-bank-bailout-to-add-up-to-1-5-trillion-to-public-debt.htm
http://www.bbc.co.uk/news/business-11462440
If we can agree that £1.3T is about right and that its been going on for four years that makes it £325Billion pa or £0.89Billion a day. Thats about the cost of the O2 dome or wembley stadium. This means we could have had 3 O2 domes in every place[Uk wide http://en.wikipedia.org/wiki/List_of_largest_United_Kingdom_settlements_by_population ] with a population higher than 180,000 and 2 in every place with a population of 50,000 up to 180,000 [every year for 4 years mind] and for anyone who wanted it you could have offered a new wembley stadiun as an alternative, or any combination of the two. This would have been almost as stupid as giving it all to bankrupt banks, but not quite.
Now with this new £75billion QE2 they are going to buy assets the banks dont want, that’s a bit like you or me arranging an overdraft then calling every demolition site used car lot within a square mile and asking them if there are any cars they’re having trouble getting rid of, and buying the lot. Or we could form a template for creating new banks, supervised by local politicians and open a new bank dealing with local [say35miles] businesses in every town with a population of more than 95000, all with a £1billion of assets.
Golem asks “Where is my money, Mr King?”
This is the same Mervyn King who has said:
“The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is, one thousand billion) pounds, close to two-thirds of the annual output of the entire economy. To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”
For an answer to Golem’s question, see the recent report by the New Economics Foundation, Where did our money go?
http://www.neweconomics.org/publications/where-did-our-money-go
An oldie but a goodie.
Where is the money? Where did it go?
I tell you now people, nobody know.
Tell you now people, went up in smoke.
Tell you now people, that aint no joke.
Quantitative easing, where did it go?
People are looking, nobody know.
People are searching, under the floor.
People are laughing, behind closed door.
I tell you now people, tell you right now.
How long it take? To hit the ground?
How long it take? To hear this sound?
I tell you now people, it’s making me frown.
But people are waking, people wake up.
People are blinking, hey wassup?
People are thinking, what the f?
people are starting, to sharpen stuff.