Not much hope with the Three Stooges, Brown, Darling & Mandy, in charge…
Yesterday, Angela Merkel panicked in Germany – as did the Irish Government previously – and guaranteed all private bank savings. So much for the stability of the euro and the eurozone. But Germany is a sovereign state, so it has the right to bail out its banks/savers (even though, as a champion of the European Single Market, it has forced other countries to adhere to the rules).
Last week, the Americans panicked big time with their $700 billion bank bailout scheme, the Paulson Plan, which marks the socialisation of the US economy. Since when did the US intervene to tackle market failure? Is non-intervention not the secret to its success?
The FTSE 100 Index has fallen by 5% already today, according to Sky News. It is no time for panic, but what else can we expect from the Three Stooges?
Vince Cable is right about suspending Bank of England independence. The Bank is fussing about keeping inflation low, when we face economic meltdown. Merv ‘the Swerve’ King and most of the Monetary Policy Committee – apart from Prof David Blanchflower – haven’t got a clue.
It is time to reverse Brown’s disastrous BOE independence policy and to reclaim control of interest rates. They should be slashed by at least 100 base points, i.e. from 5% to 4%, to stimulate the economy.
The £50k guarantee is good enough – if banks collapse, the UK economy cannot take on trillions of guarantees to pay back savers. The very guarantee, as in Germany, might shore up the banks’ position – but what if they collapse? They would bring the economies down with them directly because of the guarantees.
Germany is spending Euro 50 billion on bailing out Hypo Real Estate – that is only one bank – so what next?
It’s time for action, not panic, from the Three Stooges, but this blogger for one is not expecting anything other than panic.
Mountjoy