You need to be proactive with your parents, providing them with alternative investment opportunities.

You should understand their financial requirements now and into the future and suggest the means to provide that using their capital.

The means will depend upon the amount of capital.

Caveat, I am not a financial adviser.

I keep telling you this, "The end" is not very nigh.

I thought that five years ago in the intervening period I've learnt not to underestimate the insatiable appetite for those in power to retain it. The collapse will come, but how close it is and what or who triggers it I have no idea.

Because the entrenched interests rule, we could, perhaps, take a lesson from Mao and apply it to Capitalism.

Tiger Woods for president? There's got to be a joke about filling holes somewhere in there.

Joking aside, the people with most to gain from a deleveraged system are producers of raw materials and manufacturers, after all these are the people funding the gamblers.

The more banks exist for their own purposes instead of serving the economy, the greater the impetus for finding a better medium for trade.

If anything is to change it will be when the Jamsedji Tata's and Bill Gate's of this world find a way of gaining from making our current banks obsolete.

Presumably "the end"...!

My own definition (not that this is relevant) would be the exit of one of the HBAT's whether pushed shoved or voluntary from the Euro. There will then be a difficult period of contagion and consequent defaults which IMO will change the face of Europe permanently.

Philosophically, I think it is arguable that the point at which Greece defaulted on their bonds, months ago, when the term Haircut being used by the EU, to deny default and keep the roller coaster rolling was a default in itself.

Certainly Moody's ruled it as a default and I think it require the specialist view of a bent politician, to deny that an act of seeking NOT to pay out in full, on millions of Sovereign Euro Bonds by Greece was anything other than a default.

Question: When is a default not a default? Answer: when it is politically correct. I think not.

Turning to the latest brainwaves of Mervyn King and the Coalition I see nothing useful coming out of this. Successive governments have wrung their hands over non lending by the UK banks to UK small businesses since time immemorial.

Rapacious lending by Banks to dodgy foreign governments, benefits fraudsters, Ponzi schemes galore and every for of Credit Card and high rate loan to inadequate individuals has been achieved with spectacular success. Sod all has been lent to small UK businesses despite initiative after initiative and grandstanding after grandstanding by the Governor of the Bank of England and Politicians.

Nor will it be. This brave new lending initiative will go the way of all the others, previously rolled out, started by the Wilson government in the 1960's and continued in different forms ever since. Not going to work because the Banks do not want that business. They will not be interested.

The government needs to change the while Ethos of Banking. I believe that the roll on of Banking collapses which will follow the Sovereign debt crisis approaching just around the corner, in Europe, will offer just that opportunity to politicians.

They will fail to act effectively. They always do. Fiddling expenses is so much more gainful.

Indeed Steffan and I have been thinking about the various solutions and new theories that this thread has from time to time dabbled in.

Clearly in relation to the £140bn to the banks – it is akin to a dealer providing free heroin to an addict trying to go clean. A stupid stupid decision, if the Government were honest they would say we are trying to re capitalise the banks and “solve” a liquidity crunch. That would spook the markets and possible cause a downgrade on credit ratings.

So we have a fiction, the fiction of new business loans. What a pile of crap, if this was supposed to be economic stimulus then $140bn is a fk of a lot of tax cutting – indeed we could go to £20,000 tax free band and probably a £50,000 threshold for 40% personal tax allowance with that kind of money – then we’d see some economic stimulus.

Lying through their teeth.


However, moving on from that – I was considering a small town.

Let us consider that an honest broker establishes a coffee shop and small stock exchange inside. We will deal with an informal currency, let’s say Shire town coupons. These have a notional value of £1.
The citizens and workers of Shire town elect to receive 10% of their wages in Shire town coupons, and the local stores and service providers agree to accept them where possible.

Thus an informal trade is created in the town, which pays no tax, is a formal exchange and – for instance the Honest Broker can likely establish an exchange whereby people who wish to buy a service in the town can exchange Sterling for Coupons, and vice versa

Shoot the model down, why wouldn’t it work, and more importantly what would be the reaction of the Tax Authorities ?

There has already been some startups in this area: the Bristol Pound being one. Unsurprisingly, the VAT man has said that all the relevant transactions will be subject to VAT in real GBP.
Barter may be the only way forward!

The point of the £140bn is to be lent to businesses to help growth and spending, but that it will be repaid. It is not simply giving away money.

It is also worth opting that the banks will likely to be made to pass on the cost of cash savings to the borrowers, so whilst it makes them safer (lower liquidity risk) it is less likely to increase profits as such.