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Gordon Brown’s $1 Trillion Global Rescue Package Unravels

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http://www.timesonline.co.uk/tol/news/poli...icle6819450.ece

Alistair Darling is scrambling to plug a gaping hole in the $1.1 trillion global rescue package agreed by G20 leaders in London — hailed at the time as Gordon Brown’s biggest success.

Some countries, led by Germany, are even calling for the bailout to be scaled back amid fears that it risks burdening economies with too much debt and could encourage inflation.

The breakdown of unity reflects the different speeds at which countries are emerging from recession and conflicting views about the outlook for the global economy.

The differences also extend to the kind of capitalism that leaders want to shape out of the global crisis. A serious disagreement will flare this weekend at a meeting in London of G20 finance ministers over whether to impose an international cap on bankers’ bonuses — a measure being pressed by France. Mr Darling believes that the proposal is unworkable and will table an alternative plan to tie bonuses to performance, The Times has been told.

At the end of the G20 summit in April, the Prime Minister claimed to have built a “new consensus†among world leaders and was lauded for his role in securing the rescue deal. But a follow-up summit this month in Pittsburgh will take place against the backdrop of undelivered pledges and wrangles over how to curb bankers’ pay.

Officials admit that almost $200 billion (£123 billion) pledged in credit facilities for the International Monetary Fund has yet to materialise. Most embarrassingly, the shortfall includes $75 billion due from the European Union. The Chancellor has warned Europe to set an example and do more to meet the target of $500 billion. Britain has agreed to lend up to $15 billion to poorer economies and is willing to provide up to $11 billion more as part of an EU package. So far, none of the extra credit has been called in by the IMF, although government insiders believe that it will be needed to prop up struggling economies before long.

Other European nations are resisting increasing their commitments to the IMF, demanding that China and India do more to shoulder the burden.

Germany is leading demands that the Pittsburgh summit start discussions on how to scale back the bail-out. Peer Steinbrück, its Finance Minister, has called for the reduction of fiscal measures as soon as possible. Angela Merkel, the German Chancellor, has echoed the call for an exit strategy. An insider at the Bundesbank, said: “I never walk into a room without knowing how to get out of it.â€

British officials have barely concealed their irritation at what they regard as “premature†talk of winding up the global bailout. A senior official conceded that the global economy was picking up but added that it was “far too early to declare victoryâ€. In a speech today, Mr Darling is likely to indicate that economic support already agreed, through lower taxes, higher government spending and lower interest rates, should remain until the recovery is “assured and sustainedâ€.

Philip Shaw, chief economist at the investment bank Investec, said: “The authorities are aware that if they start exiting too quickly they run the risk of killing off any recovery. In the 1930s they tightened policy too early and it set everything back.

I think the govt is more panicking because ending the stimulus will end the bounce and Brown will have to fight an election being forced to make cutbacks in spending which he said he wouldn't do.

So far there is no exit strategy and the recovery is not sustainable because no one has tackled the fundamental problem of debt.

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That's why Brown is desperate to have some fiddled figures in Q2 next year to show that the UK is out of recession JUST in time for the General Election.

To be able to do this, he will beg the IMF and BIS and everyone else to pump more money into the banks.

He knows he has no political future, but he wants to make sure Cameron is left with a country in tatters.

...Just in time for Darth Mandelson to become Labour leader.

What a nice scenario eh?

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So the swimmer isn't swimming at all, he's just being propped up on the bodies of other dead swimmers...

The guardian have it such:

http://www.guardian.co.uk/business/2009/se...world-recession

Darling warns of danger in withdrawing stimulus packages too soon

The chancellor said he would oppose moves by France and Germany to begin 'exit strategies'

It is incredible to believe that they think it's over or that what they have done has actually done any good.

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Is the answer not just to keep printing? That way the music won't stop, right. :blink:

(or pay off everyones debt with this printed funny money.) :unsure:

Yes

Who cares about inflation in the west? Nobody, because everybody is in debt (apart from a few loonies - us).

Printing is the solution to the problem.

A spell of hyperinflation to eradicate the debts, then issue of a new stable currency backed by gold (so investors know that it cannot be inflated away)

problem solved.

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http://www.timesonline.co.uk/tol/news/poli...icle6819450.ece

I think the govt is more panicking because ending the stimulus will end the bounce and Brown will have to fight an election being forced to make cutbacks in spending which he said he wouldn't do.

So far there is no exit strategy and the recovery is not sustainable because no one has tackled the fundamental problem of debt.

What worries me the most is that he contrives for us not to have returned to falling house prices when we get to the election.

This will mean that the sheeple will think that Gordo stabilised prices and that any subsequent fall will be blamed upon the incoming (Tory) government.

So they will vote the Tories out at the following election and the arrogant W*nker back in again.

tim

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Yes

Who cares about inflation in the west? Nobody, because everybody is in debt (apart from a few loonies - us).

Printing is the solution to the problem.

A spell of hyperinflation to eradicate the debts, then issue of a new stable currency backed by gold (so investors know that it cannot be inflated away)

problem solved.

And what about the old people who will see their savings turn to dust, while being unable to work?

If we print to cause inflation, we steal of the last generation. If we keep borrowing, we steal off the next generation. There is no easy way out.

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What worries me the most is that he contrives for us not to have returned to falling house prices when we get to the election.

This will mean that the sheeple will think that Gordo stabilised prices and that any subsequent fall will be blamed upon the incoming (Tory) government.

So they will vote the Tories out at the following election and the arrogant W*nker back in again.

tim

I don't think you quite get the political system do you?

If your going to lose ensure enough shtf once your out of office which means the voters blame the new govt and you can prosper at the next election.

Clearly not good for the long term of the country but who cares you get back in power.

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Come on guys, you must admit this is much more fun (at last) than 'someone' just pressing a 'Game Over' button.

At some point I predict it should be possible to link this thread with the Wilson's failed exit strategy :)

maybe Q3 2010

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Yes

Who cares about inflation in the west? Nobody, because everybody is in debt (apart from a few loonies - us).

Printing is the solution to the problem.

A spell of hyperinflation to eradicate the debts, then issue of a new stable currency backed by gold (so investors know that it cannot be inflated away)

problem solved.

the problem is that NOBODY will have any savings....so no matter the write off with inflation, there will be no banks to lend to buy and sell houses.

oh, and no food.

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That's why Brown is desperate to have some fiddled figures in Q2 next year to show that the UK is out of recession JUST in time for the General Election.

To be able to do this, he will beg the IMF and BIS and everyone else to pump more money into the banks.

He knows he has no political future, but he wants to make sure Cameron is left with a country in tatters.

...Just in time for Darth Mandelson to become Labour leader.

What a nice scenario eh?

mandelson has on camera ruled himself out of ever being a prime minister - but he said nothing about eu presidency...

next labour leader will be one of these: darling, harman, milliband, balls - and harman probably has the best chance

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I don't think you quite get the political system do you?

If your going to lose ensure enough shtf once your out of office which means the voters blame the new govt and you can prosper at the next election.

Clearly not good for the long term of the country but who cares you get back in power.

Of course I understand

I said that I was worried that he would achieve it (because 6 months ago he didn't seem to have a hope of doing so)

tim

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If we print to cause inflation, we steal of the last generation. If we keep borrowing, we steal off the next generation.

As they seem intent in going to the extremes of both it looks like large scale political turmoil will be the likely end result.

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the problem is that NOBODY will have any savings....so no matter the write off with inflation, there will be no banks to lend to buy and sell houses.

oh, and no food.

Isn't that an argument for printing? ;)

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And what about the old people who will see their savings turn to dust, while being unable to work?

Stick em in an OAP's home. Most of them are half senile anyway, so wouldn't know the difference.

They've had a lucky life (apart from those who served in the war - not many of these left) so what's a little hardship of having to sleep in dormitories 10 to a large room.

If we print to cause inflation, we steal of the last generation.

Through high house prices, the last generation have stolen a lot from us. Its payback time...

the problem is that NOBODY will have any savings....so no matter the write off with inflation, there will be no banks to lend to buy and sell houses.

Once a new currency is created after the big inflation I described, that currency will be backed by convertable gold, so there is no reason why banks should not be prepared to lend to viable businesses on that basis.

oh, and no food.

Food comes from farms. Fams don't need money to create food - they sell the food they make for money.

Edited by Thread Killer

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As much as everyone hates Labour, and we all know what the Tories have done in the past - who is good enough to bring us all out of this mess???

Perhaps that is up to ourselves - I'm OK with that as I don't owe a € to no man until the end of the month and the bills come through :ph34r:

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