Glastonbury cancelled

No doubt? This lot have consciences? You're delusional mate.

 

I think they do. They’re human beings. The chances are they do, although it may not appear that way with their woeful decision making

 

The BBS is great when we have these open debates that morph from the topic. Love it.
Anyway, as a regular Glastonbury attendee up to 5 years ago I'm sad it's been cancelled.
However, on to the debate about money and government borrowing. I'm not an economist but read an economics degree and pre-lock down was going to do a part time post grad course at the LSE.
In an economic debate you have to leave politics at the door because all parties tend to latch on to the latest economic theories and then ditch them when they require action that is politically unpopular. (Thatcher bucks the trend, but only to a point)
governments predominantly borrow by selling bonds on the financial market at a fixed rate of interest. These are either held or traded by financial institutions.The UK government is well placed to do this because it tends to borrow in longer term cycles, eg 10 year bonds and can sell them at low rates as we are seen as a safe bet to pay out at the end. The money spent on servicing this debt by paying out on each bond is reckoned each year in the budget, not the value of outstanding bonds. Contrast say Greece whose bonds have near junk value and can only borrow on 3 year cycles at much higher interest rates. We have an Halifax mortgage, they have a wonga loan. We could in theory run much higher borrowing as we are at around 100% of GDP which is relatively low, whereas eg Greece and Italy are around 130% and are breaking EU rules. France also break these rules but are allowed to get away with it. Governments worldwide since the crash have engaged in quantative easing, printing money effectively. Although UK does it by recapitalising banks in various ways
Also since the early 70s in line with Chicago school "monetarist" theories governments sought to control the supply of money. Heath/Wilson abandoned it for political reasons. Thatcher tried it and kept changing the definition of money right up to psbr2 and right down to notes and coins.
So where does all this money swishing round the city come from? Well they have invented ever more contrived financial instruments such as CDNs and shorting to magic money up out of this air. Blair's labour were the worst at letting them get away with it and the bubble burst for various reasons causing a crash we were at the epicentre of. By way of balance Cameron pumped more money into the banks with no stipulation of what happened to it and most went out of our economy

 

Conspiracy theories. My fave is heaven 17 and what did they know that we didn't.?
In 1983 they released "crushed by the wheels of industry" a line from which was "there's a party going on that's going to change the way we live, but how do we know we've even been invited" 17 years later (see what they did there) just such a party took place. The world economic forum at Davos ramped up to full effect. After it brown allowed banks to drop their already meagre liquidity ratios and more tellingly, eg Citibank told it's private investors to invest in the hourglass economy, eg yacht makers and Cartier etc and pound shops and betting shops. Forget the squeezed middle like Woolworths, comet etc.

 

I'm not an economist but as I understand it...

On a very simple level... A government can issue bonds and sell them on the international market to raise money. They don't have to print actual notes. The market will buy those bonds in looking for a return at some point in the future, providing they believe the country involved is economically strong enough to pay it back.

Zimbabwe failed because its economy was knackered and so nobody internationally would have anything to do with them. As a result they printed their own money and it went south.

Anyone looking for the crazy side of this should read 'Adults in The Room' by former Greek Finance Minister Yanis Varoufakis. Absolutely bonkers.

 

One interesting thing about the Greece situation is that the overwhelming amount of money they received from the EU bailouts went into the Greek Central banks and then straight back out again to the German and French banks who had recklessly loaned Greek over £1tn in. The real danger was the French and German banks collapsing and tanking their respective enonomies.

 

I too read his book. He had commented extensively on the Greek debt crisis before that. As I had said in my long post previously, politics and economics are poor bedfellows. The euro is a political project. It removes both market self righting mechanisms and (in the form of EU budgetary restraints) prevents governments from spending their way out of recession.

 

And those loans to the Greeks came with the massive caveat of sustained austerity for the Greeks as well.

 

The world is basically a massive pyramid scheme

 

That sums it up nicely.

 

The summing of international debt creates scary numbers.
Even ignoring interest.

If we all set off with £100, and I lend Helen £10, that’s a total of £10 debt, if Helen lends £10 to Chef, and Chef lends £10 to Darfield, and Darfield lends £10 to me we’ve all still got £100 but there’s a total of £40 worth of debt.

 

Lend us a tenner!