marko Posted January 24, 2009 Share Posted January 24, 2009 Now the government effectively owns RBS, once they find out the extent of the sh1t they have on their hands, what is to stop them tailoring their QE to ensure they are not left holding a turkey? I can't see anyway they can lose: they have the ability to plug any gap they find in the banks balance sheets by just printing up the money. We are being told the taxpayer is potentially liable for enormous amounts - but surely the government can just QE-cook the books to ensure that the taxpayer 'wins'. Never mind the inflation of course. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 Now the government effectively owns RBS, once they find out the extent of the sh1t they have on their hands, what is to stop them tailoring their QE to ensure they are not left holding a turkey? I can't see anyway they can lose: they have the ability to plug any gap they find in the banks balance sheets by just printing up the money.We are being told the taxpayer is potentially liable for enormous amounts - but surely the government can just QE-cook the books to ensure that the taxpayer 'wins'. Never mind the inflation of course. Qe means they are holding a turkey regardless of how much debt they write off. This will be paid for either by higher taxes, reducing disposable income, or inflation, reducing disposable income. DEBT IS REAL. Quote Link to comment Share on other sites More sharing options...
dr ray Posted January 24, 2009 Share Posted January 24, 2009 My immediate concern about ZaNulabour in charge of the banks is that they will use the banks for social engineering much like local councils in Labour boroughs use their housing departments. In this Nuworld white middle class businessmen in their 50s will be turned down for a loan if their business is not environmentally sound while a single parent wanting to set up a creche for orphans of Bolivian lesbian shawl weavers (and retired Nulabour ministers) will have access to taxpayer funds. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 My immediate concern about ZaNulabour in charge of the banks is that they will use the banks for social engineering much like local councils in Labour boroughs use their housing departments.In this Nuworld white middle class businessmen in their 50s will be turned down for a loan if their business is not environmentally sound while a single parent wanting to set up a creche for orphans of Bolivian lesbian shawl weavers (and retired Nulabour ministers) will have access to taxpayer funds. Banks? if government own all the banks. there is only one. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 24, 2009 Share Posted January 24, 2009 The flaw in your plan and the bit that Ponzi Brown doesn't get is that people don't want more DEBT. Giving the banks QE money so they will lend isn't going to work, people will question whey they should pay for money the banks are getting for free and the govt is just printing. Even if the govt use's QE to give everyone a tax break say you don't start paying tax until you are earning £20K+ there's no guarantee people will spend and may just pay down debts with the extra cash. I would also argue the US/UK have been QE for years and look at the mess we are in now, if we are increasing the money supply at 12%+ a year and there still isn't enough money how much does need to be printed? Quote Link to comment Share on other sites More sharing options...
Privateer Posted January 24, 2009 Share Posted January 24, 2009 In this Nuworld white middle class businessmen in their 50s will be turned down for a loan if their business is not environmentally sound while a single parent wanting to set up a creche for orphans of Bolivian lesbian shawl weavers (and retired Nulabour ministers) will have access to taxpayer funds. Why is that bad? Taxpayers' money should not be used to help aged, greedy WASPs to ****** things up for everyone else. White middle class businessmen are the root cause of just about every major problem in the world today. There needs to be a cull. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 Why is that bad? Taxpayers' money should not be used to help aged, greedy WASPs to ****** things up for everyone else. White middle class businessmen are the root cause of just about every major problem in the world today. There needs to be a cull. that'll be me then. Quote Link to comment Share on other sites More sharing options...
Privateer Posted January 24, 2009 Share Posted January 24, 2009 that'll be me then. You vill also go on ze list. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 You vill also go on ze list. Im due on carousel soon... my life clock is blinking red. Quote Link to comment Share on other sites More sharing options...
bimyo Posted January 24, 2009 Share Posted January 24, 2009 Im due on carousel soon... my life clock is blinking red. I'm sure there is an HPC/ UK plc comparison in that film... the way people really believed they could get regenerated... Quote Link to comment Share on other sites More sharing options...
marko Posted January 24, 2009 Author Share Posted January 24, 2009 (edited) The flaw in your plan and the bit that Ponzi Brown doesn't get is that people don't want more DEBT. Giving the banks QE money so they will lend isn't going to work, ... Yes, but I am not talking about printing to lend, I am just talking about printing to fill the black holes (i.e. true QE with no debt attached to the money). Note that this does not necessarily mean directly supplying money to the bank in particular, but could be to the economy in general - as long as it is enough to keep the economy going and stave off deflation, then it is enough, no? Also, regarding the comment that debt is real - I agree, but the ability to print money and introduce inflation surely means that who pays off the debt can be chosen by the one with the ability to supply money - i.e. the government; we are all going to be paying off this debt mountain via inflation, regardless of whether we personally got into trouble or not. Is not the following scenario easily going to happen if the government choose it? 1) Government nationalises banks on taxpayers 'behalf' and acquires all the sh1te 2) Government QEs to the required amount 3) All the toxic asset sh1te on banks books become viable again because of all the new money sloshing about 4) Government declares bank nationalisations a profitable success for taxpayers (p.s. bread is now a tenner a loaf, but we won't mention that.) Or to put it another way: Bank nationalisation makes QE and (hyper) inflation even more likely? The government won't be able to resist. Edited January 24, 2009 by marko Quote Link to comment Share on other sites More sharing options...
dr ray Posted January 24, 2009 Share Posted January 24, 2009 Why is that bad? Taxpayers' money should not be used to help aged, greedy WASPs to ****** things up for everyone else. White middle class businessmen are the root cause of just about every major problem in the world today. There needs to be a cull. Because a businessman setting up a factory making bombs or fighter planes is good for the economy and a creche for lesbian Bolivian orphans isn't. Morality is a separate issue and should not become mixed up with economic policy. Quote Link to comment Share on other sites More sharing options...
whojamaflip Posted January 24, 2009 Share Posted January 24, 2009 Qe means they are holding a turkey regardless of how much debt they write off.This will be paid for either by higher taxes, reducing disposable income, or inflation, reducing disposable income. DEBT IS REAL. since RBS has 1.9 trillion GBP of debts on their books, it aint gonna be paid off. dont ask me what will happen, but if eliminate the impossible, then what you have left, no matter how improbable is.... Quote Link to comment Share on other sites More sharing options...
Privateer Posted January 24, 2009 Share Posted January 24, 2009 Because a businessman setting up a factory making bombs or fighter planes is good for the economy and a creche for lesbian Bolivian orphans isn't. Morality is a separate issue and should not become mixed up with economic policy. And that's why we're in this mess in the first place. Economics should always be guided by morality, as should everything else in life. The lack of morality and wisdom in our system of economics is what doomed it to eventual collapse. It's just a shame it took so long. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 since RBS has 1.9 trillion GBP of debts on their books, it aint gonna be paid off. dont ask me what will happen, but if eliminate the impossible, then what you have left, no matter how improbable is.... Ok, so lets assume they dont pay off the 1.9trillion in debts. who owned the debts? if this bank defaults and cant sell ANY assets, then thats 1.9Trillion out of the spending power of investors. fact is they have/should have a balancing asset. its the fall in value of the assets that are the problems from the banks point of view. QE is not used to pay debts, is used to make up the assets losing value. debts are paid out of cash flow mostly. Quote Link to comment Share on other sites More sharing options...
dr ray Posted January 24, 2009 Share Posted January 24, 2009 And that's why we're in this mess in the first place.Economics should always be guided by morality, as should everything else in life. The lack of morality and wisdom in our system of economics is what doomed it to eventual collapse. It's just a shame it took so long. Ever since the first monkey picked up a stone and bashed it over the head of his competitor, human technological and economic growth has been spurred on by war and greed. Societies based on anything else have been tried and always failed. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 Because a businessman setting up a factory making bombs or fighter planes is good for the economy and a creche for lesbian Bolivian orphans isn't. Morality is a separate issue and should not become mixed up with economic policy. businessmen also fix cars, computers, install things, grow food and just about everything we consume. some would even charge for the air and water we need too.....what? they do already??? Quote Link to comment Share on other sites More sharing options...
marko Posted January 24, 2009 Author Share Posted January 24, 2009 since RBS has 1.9 trillion GBP of debts on their books, it aint gonna be paid off. dont ask me what will happen, but if eliminate the impossible, then what you have left, no matter how improbable is.... Of course, the question is how much of the banks liabilities are in the UK and/or sterling; these the government can 'absolve' through QE. Debts overseas are outside of the governments control - which is why Gordon Brown KEEPs banging on about other countries needing to go down the QE route as well - they will be bailing out RBS's foreign assets for him. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted January 24, 2009 Share Posted January 24, 2009 Yes, but I am not talking about printing to lend, I am just talking about printing to fill the black holes (i.e. true QE with no debt attached to the money). Note that this does not necessarily mean directly supplying money to the bank in particular, but could be to the economy in general - as long as it is enough to keep the economy going and stave off deflation, then it is enough, no?Also, regarding the comment that debt is real - I agree, but the ability to print money and introduce inflation surely means that who pays off the debt can be chosen by the one with the ability to supply money - i.e. the government; we are all going to be paying off this debt mountain via inflation, regardless of whether we personally got into trouble or not. Or to put it another way: Bank nationalisation makes QE and (hyper) inflation even more likely? The government won't be able to resist. The trouble is there is no magic formula to print just enough to avoid deflation, they will get it wrong politicians always get it wrong and very quickly you could end up with hyperinflation. The other problem is that you may not be able to print fast enough to fill the holes. Everyday the amount of bad debt is increasing. You then have the problem that the banks have become risk averse and don't want to lend money out at ridiculous multiples meaning even printing money might not work. What's going to happen now is anyone's guess. Printing money is something that Ponzi Brown will find really hard to do, because it's easy and "free". However printing money is playing with fire and shouldn't be done by a lunatic suffering from delusions of grandeur. since RBS has 1.9 trillion GBP of debts on their books, it aint gonna be paid off. dont ask me what will happen, but if eliminate the impossible, then what you have left, no matter how improbable is.... Don't forget RBS will have assets, they might not cover the full 1.9tr but it will cover some of it. Quote Link to comment Share on other sites More sharing options...
Minos Posted January 24, 2009 Share Posted January 24, 2009 And that's why we're in this mess in the first place.Economics should always be guided by morality, as should everything else in life. The lack of morality and wisdom in our system of economics is what doomed it to eventual collapse. It's just a shame it took so long. You don't know much about people do you. The silver lining is that you will probably die off when the collapse comes. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 24, 2009 Share Posted January 24, 2009 Of course, the question is how much of the banks liabilities are in the UK and/or sterling; these the government can 'absolve' through QE. Debts overseas are outside of the governments control - which is why Gordon Brown KEEPs banging on about other countries needing to go down the QE route as well - they will be bailing out RBS's foreign assets for him. QE doesnt pay debts, it supplements assets. Quote Link to comment Share on other sites More sharing options...
marko Posted January 24, 2009 Author Share Posted January 24, 2009 QE is not used to pay debts, is used to make up the assets losing value. Yes - QE is going to be used not to pay debts, but to shore-up asset values. Quote Link to comment Share on other sites More sharing options...
Privateer Posted January 24, 2009 Share Posted January 24, 2009 (edited) Ever since the first monkey picked up a stone and bashed it over the head of his competitor, human technological and economic growth has been spurred on by war and greed. Societies based on anything else have been tried and always failed. What makes 'economic growth' desirable, pray tell? It's nought but some ridiculous grail for the ignorant, the venal and the unworthy. There are plenty of societies that would be doing quite well enough without it, were it not for your beloved businessmen and their viscious, subhuman ways. Thankfully, though, fortune rota volvitur and their time is ending. Now it's our turn. edit:splng Edited January 24, 2009 by Privateer Quote Link to comment Share on other sites More sharing options...
Minos Posted January 24, 2009 Share Posted January 24, 2009 What makes 'economic growth' desirable, pray tell? It's nought but some ridiculous grail for the ignorant, the venal and the unworthy. There are plenty of societies that would be doing quite well enough without it, were it not for your beloved businessmen and their viscious, subhuman ways. Thankfully, though, fortune rota volvitur and their time is ending. Now it's our turn.edit:splng But who really wants to live in your commie b*stard world. Not many I'd guess. Quote Link to comment Share on other sites More sharing options...
marko Posted January 24, 2009 Author Share Posted January 24, 2009 QE doesnt pay debts, it supplements assets. Sorry you are right - what I means was RBS's assets. Quote Link to comment Share on other sites More sharing options...
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