Monday, February 18, 2008

As I have written before, I do not think that the government's handling of the Northern Rock crisis is any good for this country.

We have a Chancellor of the Exchequer who has never had a job in the city and who clearly, along with the shadow Chancellor, has no real grasp of fiscal policy. Why else would they put forward these ridiculous proposals for charging non doms when they bring so much money into the country and the city of London provides a quarter of UK GDP. Really.

But to nationalise Northern Rock is, in the words of Professor Tim Congdon the UKIP economics spokesman, "robbery under the law."

Banks have liquidity ratios which allows them to, shock horror, make money. The money in deposits is not in liquid form because it should never be needed all at once, except in Mary Poppins and when the government and Bank of England can't deal with financial problems in a subtle and sensible way.

But Northern Rock took out a loan with the Bank of England, they weren't lent a load of cash. Even a bank like Barclays or Bank of Scotland couldn't pay back all their loans in six months if asked, so how could Northern Rock?

What credit rating does the UK Treasury/Tripartite Authority/Bank of England deserve? The answer is triple B: BBB.... for bungle, blunder and botch.


Anonymous said...

'UKIP economics spokesman.' I can barely type for laughing. More of this type of thing please.

Anonymous said...

Any links to the dispatches programme on youtube?

Chris Palmer said...

Do you believe that a qualification for becoming Chancellor of the Exchequer should be to have worked in the city?