Endgame - Nationalised Banks

[shermanator]

Here's what Marx wrote in 1867.

"Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debts become unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the state will have to take the road which will eventually lead to communism".

Am I the only one struck by Marx's vision into the future of banking and the ultimate endgame of nationalised banks? Perhaps Bob Diamond knows this day is fast approaching and is clearing the tills in best Bankster fashion.

Of course this all should've happened in 2008 but the inevitable has merely been delayed not avoided. The next leg down in asset values will lay waste to British banks as surely as night follows day, when the defaults are realised on the balance sheets.

[LJAR]

we can always let them go bankrupt.

not every bank is in trouble - lots of them are and they have friends in high places, but the market is like the tide.

You cannot resist it for ever.

[Gone baby gone]

Here's what Marx wrote in 1867.

"Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debts become unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the state will have to take the road which will eventually lead to communism".

All very good.

Except the Marx quote is totally bogus: http://www.snopes.com/politics/quotes/consumerdebt.asp

A 10 second google search would have revealed this truth.

But sometimes, I guess you want to believe.

[@contradevian]

I don't think Marx could have predicted that the banks would take over the government and not the other way round!

[MrB]

All very good.

Except the Marx quote is totally bogus: http://www.snopes.com/politics/quotes/consumerdebt.asp

A 10 second google search would have revealed this truth.

But sometimes, I guess you want to believe.

Nice work, saved me 10 seconds.

[miko]

It would be a good idear , just think of all those govenment ministers , at present there is no guarantee that they will automatically get a seat on the board of a city bank after they take their golden hand shake and pay off form parliment .

If the govenment owned the banks then during their time in Westminister they would know that it was going to be a smooth transition from parliment to a three lunch appointments a day job with half a million thrown in.

[Georgia O'Keeffe]

But the tree octopus is real, right?

http://www.youtube.com/watch?v=hAWDEsgMahQ

[Gigantic Purple Slug]

Here's what Marx wrote in 1867.

"Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debts become unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the state will have to take the road which will eventually lead to communism".

Am I the only one struck by Marx's vision into the future of banking and the ultimate endgame of nationalised banks? Perhaps Bob Diamond knows this day is fast approaching and is clearing the tills in best Bankster fashion.

Of course this all should've happened in 2008 but the inevitable has merely been delayed not avoided. The next leg down in asset values will lay waste to British banks as surely as night follows day, when the defaults are realised on the balance sheets.

The problem is not lack of theories for what will happen. There are loads. Strikes me there is very little new in economics. Maybe that's because all systems in which economic operates ultimately have finite boundaries and human participants, whether they are villages, cities, states or the entire globe. The only thing that varies is the scale.

The real clever thing would be prediciting which of those multitude of theories is actually going to happen. Looking back with hindsight, it seems obvious but at the time of the events, it's difficult to call. Of course there are always so many people making predictions some of them are bound to be right, but IMO it tends to be more luck than judgement. To me economics is chaotic and although we will always be able to explain what happened in a logical and plausible way, and probably using the basis of a theory that was written a hundred or so years ago, prediciting the future is a different issue.

If we're talking cuts, I reckon a bunch of monkeys with red and green buttons and a big stock of bananas would do as well as the MPC. And they'd be a lot cheaper.

[Gone baby gone]

But the tree octopus is real, right?

100% bona fide. I'm in charge of the collection. Just PM me and I'll give you a PayPal account you can send a shitload of money to.

[scepticus]

"Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debts become unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be nationalised, and the state will have to take the road which will eventually lead to communism".

Am I the only one struck by Marx's vision into the future of banking and the ultimate endgame of nationalised banks? Perhaps Bob Diamond knows this day is fast approaching and is clearing the tills in best Bankster fashion.

Whatever the pedigree of the quote (amazing how people will prefer pedantic combobulation over actually addressing the question or issue isn't it?) its truth is obvious.

However, what is missing from this prediction is the possibility of printing more money as required, and perhaps more crucially, creating more bank capital as required.

The nice aspect about this notion (it has plenty of less nice aspects to be sure) is that its enactment would certainly have a very nasty impact on bank profits.

Anyone know what goldman sachs profits have been looking like recently?

[MC Fur Q]

I wonder what Nostradamus had to say about the HPC? Did he say when it will finally get started?

[Gigantic Purple Slug]

I wonder what Nostradamus had to say about the HPC? Did he say when it will finally get started?

No but his guess is as good as anyone elses. And of course with hindsight it will be clear that what seemed like inane rambling was really the prediction of a genius.

Nostradamus formula :

i) Make vague statements that can be interpreted in any one of a million ways.

ii) Make lots of them.

iii) Sit back and wait for immortality.

So simple, but he seems to have had the genius to do it first. Mind you I don't think he got rich off the back of it.

[Executive Sadman]

Centralization of credit was one of the central tenets of communism.

and people think the crash was caused by ignorance. My ****. The puppeteers engineered everything.

Mass murder and gulags soon to follow.

[Lepista]

The trouble is - at the end of the day, which prole benefits - the one who knows the game, and stays out of it, or the one who goes all in and racks up the biggest debt they can source...?

[aa3]

When the government owns the major banks it can direct credit in a rational fashion. For example imagine Britain wanted to build up a certain industry. It could provide long term low interest loans to the best corporatins in that area, loans to build up the supplier network, and lend money to build the infrastructure to get materials in and products out.

In China the state owns the big 4 banks. It can expand credit in a way it wants if needed, and it can reel in credit when it wants if things are overheating. No need to go through the middle men of private banks, like our leaders pathetically begging the big banks to lend more.

We are almost there if we wanted. The government has Northern Rock, has 80% of RBS, and 50% of Lloyds. Plus imagine the shares the government already holds in the other banks through the government pension plans.

[Arbitrage]

I don't think Marx could have predicted that the banks would take over the government and not the other way round!

Yes, exactly what I was thinking. In today's Britain nationalisation theoretically transfers ownership from the private to the public sector, but as the politicians work for private bankers there's no real change at all

This is not going to end well, eventually even the Brits will revolt

[Georgia O'Keeffe]

When the government owns the major banks it can direct credit in a rational fashion. For example imagine Britain wanted to build up a certain industry. It could provide long term low interest loans to the best corporatins in that area, loans to build up the supplier network, and lend money to build the infrastructure to get materials in and products out.

In China the state owns the big 4 banks. It can expand credit in a way it wants if needed, and it can reel in credit when it wants if things are overheating. No need to go through the middle men of private banks, like our leaders pathetically begging the big banks to lend more.

We are almost there if we wanted. The government has Northern Rock, has 80% of RBS, and 50% of Lloyds. Plus imagine the shares the government already holds in the other banks through the government pension plans.

why would a govt direct credit in a rational fashion this is fantasy as shown by uk taxes, the reason for people rationally investmenting in property is fundamentally due to tax distribution (capital,income and inflation), set by govt i believe, i see no reason why they wont also be allocating the credit to their mates given the expenses scandal. Your statement has no basis in reality as far as the UK is concerned, its not even a guess, its completely proven to be untrue over the last few decades

its quite simple, keep banks private, let bankrupt companies fail, remove limited liability and you will miraculously get efficient allocation of capital despite govt doing what they always do and throwing in incorrect price signals left right and centre. Remove risk and you will simply get allocation of capital in huge amounts completely misdirected

Edited February 7, 2011 by Tamara De Lempicka

[Riedquat]

Remove risk and you will simply get allocation of capital in huge amounts completely misdirected

Why do you think that? Bank bailed out, bank failed - it makes no difference either way if you've managed to stuff your pocket in the process. If you want banks to work efficiently you need failure to badly hurt those running them, far more than it needs to hurt the institution.

[aa3]

why would a govt direct credit in a rational fashion this is fantasy as shown by uk taxes, the reason for people rationally investmenting in property is fundamentally due to tax distribution (capital,income and inflation), set by govt i believe, i see no reason why they wont also be allocating the credit to their mates given the expenses scandal. Your statement has no basis in reality as far as the UK is concerned, its not even a guess, its completely proven to be untrue over the last few decades

its quite simple, keep banks private, let bankrupt companies fail, remove limited liability and you will miraculously get efficient allocation of capital despite govt doing what they always do and throwing in incorrect price signals left right and centre. Remove risk and you will simply get allocation of capital in huge amounts completely misdirected

Under the lib/lab/cons and potentially under any democratically elected government it seems any system will fail.

The free market works in decentralized areas of life. Like say I decide to buy electronics and it turns out the retailer doesn't stand behind its gauruntee.. its not the end of the world. Otoh say I put my life savings with trust co and they lose it all, its a big deal.

Its also a big deal if as a nation we are trying to build up capital in an industry, but our banks would rather use the capital to gamble on oil prices. Even if the banks do finance capital investment, they collect a very large spread, even the lions share of the profits. Its about cutting out this middle man.

[Traktion]

When the government owns the major banks it can direct credit in a rational fashion. For example imagine Britain wanted to build up a certain industry. It could provide long term low interest loans to the best corporatins in that area, loans to build up the supplier network, and lend money to build the infrastructure to get materials in and products out.

In China the state owns the big 4 banks. It can expand credit in a way it wants if needed, and it can reel in credit when it wants if things are overheating. No need to go through the middle men of private banks, like our leaders pathetically begging the big banks to lend more.

We are almost there if we wanted. The government has Northern Rock, has 80% of RBS, and 50% of Lloyds. Plus imagine the shares the government already holds in the other banks through the government pension plans.

How does the government know what the next big thing will be and therefore push investment into it? It can't, which is why central planning is judged to be less efficient than a market based economy. In short, how can a few liars in suits know where to spend the money better than millions of individuals?

[50sQuiff]

Even if the quote were real (how unfortunate for the True Believers to discover it's not), it would merely have been an accurate political forecast.

It's not a monetary prediction, or even an inevitability. After all, a less corporatist state may have chosen to let the banks fail, restructure the debt and issue a debt-free fiat currency in lieu of deposits.

[50sQuiff]

When the government owns the major banks it can direct credit in a rational fashion.

Edited February 7, 2011 by 50sQuiff

[PopGun]

Centralization of credit was one of the central tenets of communism.

and people think the crash was caused by ignorance. My ****. The puppeteers engineered everything.

Mass murder and gulags soon to follow.

and people actually thought communism was dead..... ha.

[Traktion]

btw, I could just imagine the populist government of the time 'opening the credit taps' for first time buyers. How about a pet project by some MP's friend - some extra credit to help has daft idea 'create new jobs', as well as lining their pockets. It would be disastrous.

Edited February 7, 2011 by Traktion

[South Lorne]

...as mentioned he never made the comment....but in the UK the Communist Leaning Stalinist Brown paved the way to destruction ...wonder what Karl Marx would have made of that.....