Why we're being left sink...

the_rebubblican

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Mar 24, 2010
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Will Hutton in the Observer had an interesting article in last weeks edition. He takes a birds eye view of events.

There's lots of talk about default, burning bondholders and resurrecting the punt. He believes the euro long term will be a linchpin of global stability with the dollar, yen and yuan.

I've been slackjawed as to why our "partners" are going to impose a level of interest rates that will almost guarantee a default in the near term. Hutton hints at what the major powers fear when he says...

"Dominique Strauss-Kahn, managing director of the IMF, told Stern magazine that he thinks a second financial crisis is almost inevitable given the paucity of reform and the vulnerability of the financial system – and that next time round it will be impossible to persuade taxpayers to fund bailouts. It would be a crisis of democracy."

He also notes the potential weakness of our nearest neighbour..

"If the same financial professionals who caused the Irish bank run decide that British banks are too exposed to Ireland, that the British property market is about to buckle and that, like the Irish, British bankers are hiding the ongoing weakness in their balance sheets and they start a British bank run, then disaster will hit."

So it's clear the global financial authorities and central banks believe that the story doesn't end with Ireland, it probably starts with us. This crisis has a long way to play no wonder their holding their cash until the big money's needed.

Early on he outlines that it was not the euro but incompetence that brought us to this pass...

"The capacity to look at a problem through the wrong lens and then advocate what are, in effect, go-it-alone, beggar-my-neighbour economic policies in the name of free markets and political sovereignty is breathtaking. Dublin followed Edinburgh, Reykjavik and Dubai in trying to exploit unregulated global finance and become an international financial centre. The exercise blew up in everyone's face..."

Ultimately, the outlook as we know (but do not fully understand) is not good...

"...the strains in crisis-hit Ireland and Greece may eventually become impossible to manage. The fiction is to imagine that the soft option is to abandon [the euro]."

So, if he's correct, there's no doubt that part of our problems are the fact that we can't see a way out of this because our global leaders can't either.
 


Clanrickard

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Apr 25, 2008
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33,594
"Dominique Strauss-Kahn, managing director of the IMF, told Stern magazine that he thinks a second financial crisis is almost inevitable given the paucity of reform and the vulnerability of the financial system – and that next time round it will be impossible to persuade taxpayers to fund bailouts. It would be a crisis of democracy."

"...the strains in crisis-hit Ireland and Greece may eventually become impossible to manage. The fiction is to imagine that the soft option is to abandon [the euro]."

So, if he's correct, there's no doubt that part of our problems are the fact that we can't see a way out of this because our global leaders can't either.
He's spot on. Without major reform of the financial system there is a good chance this will happen again. Wall Street has a stranglehold on the White House so they won't reform and the City is too important to Britain. There needs to be a world wide set of rules rigidly policed but too many vested interests don't want this to happen.
 

sonnet

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Nov 26, 2010
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I don't understand.
Are the majority aware of what's happening, or is just the people here on this forum?
Why the opposition doesn't do anything really concrete?
Here's really anyone up there among the politicians who really care for us?
We will just watch, as if in a cinema,or we 'll take action before it's too late?
 


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