Betrayed. Greek nation sold to the banks.

The Haze is horrified to learn today that the Greek Parliament has abandoned its duty to its own people and paved the way for financial speculators and loan sharks to escape the Greek debt debacle unscathed - the losses on their reckless lending and gambling socialised to Greek and European taxpayers.

By accepting the latest round of austerity cuts and asset sales demanded by the IMF and the ECB in exchange for yet another loan they have sold their people into slavery.

What is euphemistically and dishonestly being called a 'bailout' for the Greek nation is nothing more than another huge debt - loaned by European taxpayers to a fiscally bankrupt nation that has no hope of repaying it through austerity.

The loan is illogical since it cannot succeed - but it has three clear aims and immense collateral damage.

(a) Most of the Greek debt bonds that are held in vast quantities by private banks all over Europe mature in 2015 and somehow the ECB & the IMF think that a way can be found to pay off the loans down the line.

(This is absurd because the terms of the loan demand a package of austerity measures that will destroy utterly the kind of economic growth needed to service the loans. This is of course exactly why we are in this position today as the last bailout was an utter failure - how could it not fail? - you can't fix debt with more debt!)

(b) It attempts to rescue the Eurozone banking system from a potential meltdown and save the embattled Euro itself. 

(c) It reinforces the absolute power and tyranny of the banking cartels - Greece has been bullied back into orthodoxy - by taking the loan it reinforces the notion that there is no alternative to accepting money as debt.

The collateral damage will be horrific. 

Greek assets like their national utilities will be sold off at knockdown prices - the imposed austerity will (at the very least) destroy the economic future of a generation of Greek people and may yet destroy the social fabric of an entire nation.

and it all simply keeps the global giant ponzi scheme of Fractional Reserve Banking going for a few more years.

As our friends @ Positive Money wisely reflected this morning:

Would it be possible for the banks to have lent so much if they had to actually find that money from savers, rather than simply creating it out of nothing through a clever accounting process?

For a bank (or another financial institution), it is one thing to lend money that they had to borrow and they have to return to their depositors with the interest, and it’s a completely different thing to lend money which they just created by typing numbers into a computer system.

There is something fundamentally wrong with fighting a debt crisis by offering yet more debt

   

The loan sharks and profiteers who have made a fortune from trading in Greek debt are being protected at all costs - and it will be ordinary hard working taxpayers all over Europe who will foot the bill for once again providing private companies with free insurance for reckless lending.

The Greek government had an historic opportunity to follow nations like Argentina and Hungary and defy the banking cartels and the IMF - and to stand up for their own people - but they lacked the courage - they lacked the vision and now the Greek people will pay the price.

The Greek people should now rise up and make it clear that they will not accept governance that betrays them on behalf of the banks.

Canadian Oil Sands shame - video

A sobering video about the deeply damaging practice of producing oil from the tar sands of Canada.

The Haze says this is ten minutes well spent.

UK exposure to Greece around £365 Billion

As the Haze strongly suspected - the UK exposure to a Greek 'credit event' would be more in the region of £365 billion and not the £2 billion quoted by the Government or the £8 billion ventured by the Bank of England.

All over Europe our rotten and creaking financial system is threatening to collapse - taking savings, pensions and jobs with it.

This is an extremely serious development - the true extent of the danger to economies all over Europe is only now emerging - and few people can consider themselves safe from the potential contagion. 

Why the huge discrepancy? Well in an order to avoid adding panic to an already fraught situation the government has failed to include UK exposure to those wonderful Credit Default Swaps.

The potential devastation of banks and other City institutions would be equal to 24% of UK annual national output, or £14,640 for every family in the UK.

Experts accused ministers of underestimating the true scale of the risk to the UK, as Channel 4 News revealed that estimates of potential exposure range as high as £366bn.

 

Danny Gabay, of Fathom Financial Consulting, which calculated the figure using data from the Department of Business, said:

 

'It's not the direct loan that's the problem, it's the derivatives of those loans which can go on to be multiples of the actual original size of the loan.

'London made a vast amount of money in the ten years before this crisis selling those loans. Those chickens may now be coming home to roost.'

Haze Comment:

Even IF BY SOME MIRACLE - the UK banks wriggle off the hook this time - we must demand as a nation an end to these incredibly dangerous financial gambling games.

Fractional Reserve Banking is bad enough but when you add the power of the 'casino economy' to magnify the damage many times over it is clear we must act.

The sale of these damn derivatives should end today. 

Join the Positive Money Campaign for a banking system that works in the public interest and not against it.

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Muddled Imperialism - Afghanistan

In days gone by, nations had empires that were acquired and retained through the use of military force.


In the modern age of globalisation, nuclear weapons, international terrorism and economic superpowers - surely the days of 'gunboat diplomacy' are gone forever...


...and yet the UK is fighting two wars at the moment. 


This morning Air Chief Marshal Sir Simon Bryant, the RAF's second-in-command, said "huge" demands were being placed on equipment and personnel by running operations in both Afghanistan and Libya. 


Quite aside from the cost to the UK taxpayer of these hugely expensive wars at a time of supposed 'Austerity' and budget cuts - just what is the rationale for our continued fighting in Afghanistan and Libya?


The Haze will look at Afghanistan today


AFGHANISTAN


A coalition including UK troops followed an American lead and deployed in Afghanistan as part of the oxy-moronic 'war on terror'.

Post 9/11 the idea was that this 'failed state', ran by the Taliban under Sharia law was a breeding ground for terrorists and it needed sorting out.


What was the criteria for success in Afghanistan? The right-wing Understanding War site has this criteria published on its website:

Success in Afghanistan is the establishment of a political order, security situation, and indigenous security force that is stable, viable, enduring, and able—with greatly reduced international support—to prevent Afghanistan from being a safe-haven for international terrorists. This objective is the most narrowly-constrained goal the United States and its allies could achieve in Afghanistan that would support our vital national security interests.

So has this been achieved? Given that the removal and defeat of  The Taliban in Afghanistan was obviously seen as a central component to this end -  then it doesn't look as if things are going well with violence in Afghanistan reaching record levels in 2010 with AlertNet reporting that

The Taliban are at their strongest since they were ousted...the insurgency has spread out of its traditional strongholds in the south and east over the past two years into once peaceful areas of the north and west. The north in particular has become a deadly new front in the war.

Clearly the Taliban are not vanquished -  215 coalition soldiers have lost their lives in Afghanistan in 2011 and the Taliban launched a spring offensive with another suicide bombing in which four people were killed.


Going through the August 2010 casualty statistics listed here on The Guardian website makes for sobering reading and even a quick glance reveals a security situation which is a long way from "stable, viable, enduring, and able"


This morning was typical of many others as another terrorist attack claimed another life.


Its obvious that preventing "Afghanistan from being a safe-haven for international terrorists" has been a miserable failure - but what of the government that was installed after the invasion of Afghanistan - how is that doing?


Well the two of the oft quoted reasons for invading Afghanistan were:


(a) That the Taliban refused to handover Osama Bin Laden.


(b)  The reprehensible treatment and oppression  of women by the Taliban.


Bin Laden was never handed over and as we now know was happily holed up in a luxury bunker next to a military base in Pakistan - but what of the women of Afghanistan, has their lot improved?


This is what Afghan Malalai Joya, teacher, peace activist, and women’s rights campaigner had to say about the situation facing Afghan women back in January last year.

“The situation of women was, without a doubt, the best excuse for the US government to occupy our country underthe banner of women’s rights… But they pushed us from the frying pan into the fire.”

hardly a ringing endorsement of the new deal for Afghan women but she has harsher words for the government of Hamid Karzai.

"The NATO-backed alliance is brandishing “criminals in suits” as moderates and as proponents of democracy. they have established a puppet regime,full of people who are photo-copies of the Taliban."

Refferring to a Human Rights Watch report she said that:

“since 2001 65,000 civilians have died in Afghanistan, while only 2,000 Taliban fghters have been killed. The daily lives of the people of Afghanistan are progressively being mired in corruption, poverty, injustice, violence and joblessness.”

and just in case  the point hadn't been made...

“My people have no faith in these puppets and their government.”

How about Anissa Haddadi writing in the International Business Times:

...after the Taliban were ousted, Hamid Karzai and his government were instated and since then, the same sharia (Islamic religious) laws remain, sometimes slightly modified.


A leading Afghan judge illustrated the current situation for women when he declared that "those convicted of adultery will still be stoned to death...but with smaller stones."


Women's rights marches are still prohibited and they remain subject to purdah, forcible seclusion in the home, they are still being executed and thanks to a bill passed by the Karzai government, they cannot seek work, education and have to agree to sexual intercourse with their husband a minimum of every four days.

How about Sarah Chayes quoted in this article by Michael Winship

...the United States and its NATO allies have had to convince themselves and public opinion in each of their countries that “this is a democratically elected representative government [in] Afghanistan in order to justify the sacrifices in money and troops. But the Afghans see it differently.”


What they see instead, she said, is a restoration to power under President Hamid Karzai of the gunslinging, crooked warlords who were repudiated when the Taliban first started taking over vast parts of the country a few years after the Soviet withdrawal in 1989.


The “appalling behavior” of officials in the current government, including rampant bribery, extortion and violence, is a serious factor in the Taliban resurgence

That was back in 2009 - but this was what US diplomats had to say about the Afghan government yesterday complaining of:

"....political interference, corruption and what one official called a “narrow skill layer” of trainable people"

It seems hard to find ANY evidence that would suggest that the foreign 'mission' in Afghanistan has been anything other than an unmitigated failure. Hugely costly in terms of military and civillian deaths, money and equipment - Afghanistan represents a total failure of old colonialist ideologies to adapt to a changing world.

The UN is finally catching up. On July 17th it acknowledged the obvious difference between the perpetrators of 9/11 - Al Queda and the hardline islamists of Afghanistan The Taliban. 

This childishly obvious fact makes the whole mis-adventure in Afghanistan even more baffling - since it was supposed to be a response to 9/11 whose operatives and funding were from - Saudi Arabia.

All that is left for the defeated coalition is to find some way to cover up this shambolic excercise in 21st century gunboat dipolmacy.

Negotiations have begun between the US Govt and the Taliban and President Obama wants to pull out troops and hand things over to the Afghan army and the aforementioned bunch of warlords and drug kings (the Afghan government)

Doubtless some version of the Vietnam 'peace with honour' PR spin will emerge over the coming months with the installed Afghan government comprising of "photo-copies of the Taliban" (but with better drug connections and able to embezzle foreign aid) being held up as the shining success of the whole endeavour.

If you see the press conferences, the medal ceremonies, the applause and the flag waving - just remember:


(a) The appaling loss of life (the majority Afghan civillians)


(b) The corrupt oppresive sham of a government that is left behind,


(c) A resurgent Taliban which stands victorious and unbowed


(d) A shattered country riven by a decade of war.


The Haze thinks that the only good thing that may yet emerge from this disaster is something that it took a 27 year old peace activist who has survived four attempts on her life to say - I leave the last words to Malalai Joya.

“These occupation forces, they are victims of the wrong policy of their own government that sent them to a bad, costly war. Democracy will never come by war, by cluster bomb or by the barrel of a gun"

Banking crisis - struggling families pay the price

The Haze was angry but unsurprised to read on the BBC website that the consumer group Which? is accusing banks and building societies of putting the squeeze on homeowners who have standard variable rate mortgages, painting a clear picture of unaccountable profiteering from the usual suspects.

More than 40% of mortgage borrowers are now on standard variable rates, which kick in after cheap introductory mortgage deals expire. The highest are around 6%, double the cost of the best value mortgages.

"They're just milking people," one homeowner from Peterborough, Mark Fellowes, complained.

He says the interest rate on his Egg mortgage dropped by just 1.5% when the Bank of England cut official rates by 4.5% after the financial crisis.

"I was very puzzled initially and then you just get angry," he says.

Quite. Regular Haze readers can probably guess what's coming next...

...yep its time for a media friendly euphemism!

Under the heading of 'Recapitalisation' the BBC article says:

"The Council of Mortgage Lenders argues that the standard variable rate, or SVR, is dependent on the cost of attracting deposits from savers, rather than the Bank of England.

But its director general, Michael Coogan, admitted to BBC News that lenders have been widening their profit margins after losing heavily during the crisis."

"I think what we have is the banks and the building societies trying to restabilise the system which was in shock in 2008," he explained.

"They are trying to recapitalise their organisations, deal with past losses, deal with the risk of future losses, and at the same time keep their customers as happy as possible through the economic cycle."

The Haze can put all that media spin into a plain English translation.

The 'Economic Cycle' is a media-friendly phrase to describe the inherent financial instability and impoverishment created by the financial services industry via the ponzi scheme of Fractional Reserve banking.

What this remarkably frank banker is telling us - is that they will try to soothe their customers while screwing them for money - in order to make up any losses incurred during the financial chaos THEY created.

He deeply patronises his customers by implying  via the slippery euphemism of 'the economic cycle' - that his customers don't really understand the complexities involved and that they should be grateful that the banks try to 'keep them as happy as possible' while simultaneously acknowledging that they are profiteering.

As long as we continue to allow private banks to lend us our money supply at interest they will continue to treat us all with contempt.

The banks are the unaccountable, unelected masters of our country - the political argument against them is just, rational and must prevail, if we are ever to put them in their place and re-assert our sovereignty in the public interest.

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Dunkirk rescue of Greek loan sharks underway

When former IMF head honcho Dominique Strauss Kahn was charged with raping a New York chambermaid...

...The Haze wasn't the only observer to think that he must have mistaken her for a developing nation.



Now the banking cartels and the IMF circus have rolled into Europe and they have their eye on a little Mediterranean number that looks suitably vulnerable and ripe for conquest.

Greece is drowning under a sea of debt and its people are losing jobs, homes, livelihoods and futures.

While the Greek people are far from blameless (some Greek politicians should be prosecuted for corruption and criminal negligence) - the real culprit, as ever, is the great ponzi scheme of Fractional Reserve Banking.   

True to form, the only concern of the IMF is that private bankers emerge unscathed and get to asset strip the nation as well.

Robert Peston on his BBC Blog offered his usual mix of insight and astonishing naivety when examining the wrigglings of the ECB and the bullying screams of the IMF.

It is perfectly obvious to The Haze why a wholly bankrupt nation is being asked to adopt austerity, take out another huge loan and sink further into unsustainable debt.

Or to put it another way - why would anyone give a bankrupt business a five year loan knowing full well that it will be just as bankrupt five years later and the loan will never come back?

Answer?

The whole process is nothing more than a Dunkirk operation ran by the IMF to rescue bankers and hedge funds.

Driven ever onwards by their own greed the bankers now stand waist deep in a sea of bad debt hoping that the IMF will (once again) send a few boats to pick them up.

and it looks like they might get away with it


If the IMF and the ECB can bully the German's into another pointless bailout - then by 2015 the bankers will be safely away with their profits and the cost of the Greek bankruptcy can be socialised to the Greek people and the European taxpayer.

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The Haze says:

(a) Greece should default today.
(b) Greece should leve the Euro
(c) No bailouts for hedge funds and banks

...and let the contagion fall where it must!

Only this way can we stop private profits from debt being wholly subsidised by the taxes of ordinary people - and the political process that will lead to radical monetary reform can begin.

Monetary Reform - Labour's missed opportunity

Pollsters often pose questions to the public that require a dualistic response - who is to be blamed /praised - The Conservatives or The Labour Party? Not surprisingly questions phrased in this way gain a dualistic response.

Liberal Conspiracy ran its own poll at the start of 2011 to see who the public blamed for the financial crisis - but removed the steer to blame one of the political parties - the results were very interesting.

Conservative voters blamed the exiting Labour government in the main but perhaps surprisingly 25% still blamed the banks. 

70% of Labour voters blamed the banks. 55% of Lib Dem voters did. In fact on average the majority of voters of all parties blamed the banks.

The voters correctly blame the banks for the financial crisis and as Liberal Conspiracy editor Sunny Hundal  pointed out
 

...a significant percentage of voters lost trust with Labour on the economy – not because it didn’t have a “tough” (as Alistair Darling called his) deficit-cutting plan. Many lost trust in Labour’s handling of the economy because it didn’t regulate banks properly, and let them take the economy down.

They blame the banks for the financial crisis, but Labour for letting the crisis happen in the first place.

These people are a significant majority of the voters. How will Labour respond to them? That should be the main question for the party now.

Absolutely.

What Labour needs now is a policy maker of vision and courage - one that can see the astonishing opportunity that embracing Monetary Reform would represent.

The challenge for Labour is not to waste time on trying to provide better 'supervision' for banks - they are beyond reform in their existing state -  instead Labour should get to the root of the problem, Fractional Reserve Banking.

Fractional Reserve Banking is the means by which the vast majority (97.5%) of money in the UK is created. Contrary to popular belief, the government does not create the money which drives the economy, private UK banks do - as debt.

The 1844 Bank of England Act prohibits anyone but the Bank of England printing notes and coins and this is still true today. Wise was that parliament that realised that if they allowed private banks to print their own notes that it would distort the British markets in all kinds of areas, create economic instability and undermine democracy.

The act, doesn't cover money created digitally as loans, digital transfers of money or chip and pin technology - how could they have imagined such things back then?

Digital money has grown to make up over 98% of the money in circulation - so its clear that the UK money supply is by in fact provided by the private sector in this form.

The problems with having a cartel of private banks create a sovereign nations money supply are not limited to making the purposes of the 1844 act redundant.

Bank credit can be issued many times over on the basis of holding a mere fraction of the sum issued on deposit - hence the name Fractional Reserve Banking. So it was that prior to the financial crash of 2008/9 UK banks had on average just £12.50 for every £1,000 they had lent.

Martin Wolf of the Financial Times described the modern reality of money thus:

"The essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending..."

The house price bubble, boom n bust, the credit crunch, the recession, unemployment and financial instability all have the same root cause - money created as debt.

The inherent and venal inequities, instability, graft and pernicious conflicts of interest that characterise Fractional Reserve Banking are well known to many people.

The current danger of a pan-European financial crash is no surprise at all to the Monetary Reform movement who knew of the problems of bank credit long before Irving Fischer wrote his seminal book on the solution - "100% Money" back in 1935.

The present series of bank bailouts, debt crises and financial disasters rightly provoke public anger and fear - but they also present Labour with a once in a generation opportunity to reform the banking system so that it works in the public interest and not against it.

How about a Labour manifesto that promised the following for the next election:

* A stable banking system

* An end to the estimated £30 billion hidden subsidy awarded to the banking industry every year.

* A realistic chance to start paying down the national debt

* A genuine end to 'boom n bust' economics

* A hefty tax cut.

* Money directed to projects of social and economic benefit - not to things that turn a fast buck for banks

* No more bank bail outs

* An end to banks using depositors money to gamble in the 'casino economy' of financial markets.

* No need for deposit insurance

All this and more would be achieved quite easily if the political will could be found to tackle the banks and our insane system of money supply.

Detailed proposals put forward to the Independent Commission on Banking by a group from the New Economics Foundation and the campaigners Positive Money could make everything listed above a reality quite easily - indeed their proposals are elegantly straightforward when matched against the chaotic muddle of the current system.

To reform our money supply may seem radical - but in fact its the opposite of radical, because the continuance of the current system looks increasingly impossible and vastly expensive.

If only the Labour leadership could see the potential that Monetary Reform represents.

It would have support from across the political spectrum, be socially just, solve economic problems including the national debt and would represent all that is good and right about the tradition and ethos of the party. As Liberal Conspiracy rightly said back on January 31st:

Labour cannot win back trust on the economy with voters until it admits (repeatedly) that it failed to regulate banks and financial institutions properly, and lays out a bold plan to prevent that happening in the future

Well the solution is out there - just waiting to be picked up - what on earth is Ed Milliband waiting for?

The time for Monetary Reform has come - the party which embraces it first will gain association to social and economic advantages that will serve them well politically for generations...

...and the party that doesn't will gain renown as the people who abandoned the nation to the banks and the IMF.

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UK will follow Greece into default

Europe stands on the brink of a financial collapse as Greece looks certain to default on its debt.

Like all countries, the Greek government relies on debt money to run its economy. The usual 'bust' phase that always follows the 'boom' phase of debt fuelled growth has collapsed its ability to service debt because tax revenues are falling just as welfare payments are rising.

It doesn't help that, in Greece, tax evasion is commonplace and pensions generous – but using public spending to try and grow out of the current global bust phase is what most large developed economies are trying to do right now (except the UK!)

Bankers have been demanding ever higher rates of interest to compensate for the risk that they might not get their money back from Greece. As borrowing costs have risen, it has become impossible for the Greek economy to grow itself out of trouble. All totally predictable for followers of the roller- coaster that is Fractional Reserve Banking.

Credit rating agencies have downgraded Greek government debt to "junk" status (leaving many to wonder why they are so important), and this pushed the cost of borrowing so high that the country effectively had its international overdraft facility cancelled overnight. Fearing bankruptcy, Greece ran into the hands of mobsters like the ECB and the IMF – for up to 120bn Euros of new debt.

But IMF core orthodoxy always demands that ‘rescue packages’ (debt) come with strings attached (Mafioso asset stripping and grinding austerity demands)

This scenario is complicated by Greece's membership of the Euro. This means it cannot stimulate growth by devaluing its currency, and nor can it cut interest rates any further, which would help, because these are decided by the European Central Bank in Frankfurt. Instead, the public sector cuts that the IMF demands are almost certain to deepen the Greek recession, reduce tax revenues and making it impossible to service its debts in future.

Protestors are out on the streets in Athens around the clock determined that they and their children should not bear any more of the austerity demanded by the European Central Bank (ECB) and IMF.

The IMF is predictably screaming that no level of grinding poverty is too low for the Greek people to bear in order that bankers continue to be paid their interest and that any solution that involves the banks taking a haircut is unthinkable - they are also demanding that Greece be asset stripped by selling its public companies at knock down prices to foreign investors - all true to form.

The ECB is adamant that no banker should lose out as a result of the tragedy engulfing the Greek nation - not surprising as the ECB is its major banking creditor.

But how have we got things got so far - and what might be the implications for the UK and what comparisons can we draw between the Greek situation and our own?

(got a moment to support The Haze on Wikio? (click on the little birdies to vote!) Or click the SHARE button at the top of the article)

Well - the Greek situation has six main drivers:

(A) Economic decisions based on political ideology

The admission of Greece to the basket of countries that trade in the Euro meant an artificial cut in Greek interest rates and a political desire to have Greece succeed as a 'Eurozone' member no matter what the cost.

The role of the ECB is to promote 'price stability' and it was buying greek debt in order to prevent exactly what has now happened anyway - a collapse in market confidence that Greece can ever repay its debt and an almost inevitable default.


(B) Fractional Reserve Banking

Banks all over Europe eager to profit from Greek debt and the implicit public guarantee afforded by the ECB (and by extension European taxpayers) have loaned hundreds of billions of Euros into existence and sent them to Greece. As ever - this debt money has distorted the Greek economy, created a temporary debt fuelled unsustainable bubble of 'growth' (which encouraged still more lenders to throw loans at Greece) and has not resulted in any kind of actual solid economic growth with which Greece would have had any hope of repaying the loans down the line.


(C) Incompetent Management

Financial institutions all over Europe have managers and CEO's who are amongst the most highly paid specialists in the world - sadly for all concerned these people lack a perspective beyond the narrow confines of their own industry and are not in many cases sound mangers of staff or of risk. 

Their collective incompetence now has banks like Credit Agricole, BNP Paribas and many others facing massive losses and will once again need taxpayer funds (more debt) to bail them out. 

As ever the role of the hoplessly incompetent rating agencies cannot be ignored - their predictive models only wave red flags after the event -  they are never a reliable indicator of medium to long term risk and they have YET AGAIN contributed hugely to a financial disaster instead of averting it.


(D) Fraud

There now seems little doubt that companies like Goldman Sachs and others wilfully misled investors into buying a range of debt based 'securities' in Greece by massaging and concealing data. They did exactly the same during the US sub-prime mortgage crisis  and so no surprise to see them at it again.

(E) Political Incompetence and Corruption

The Greek government has blundered and squandered its way to disaster - it did exactly what the Labour administration here in the UK did and spent more and more money during the credit boom instead of putting money aside for when times were not so good. The debt money was not spent on productive capacity and so the seeds for this inevitable collapse were sown.

(F) Unrealistic Expectations

The Greek people themselves must accept some of the blame for this disaster - for many years they dodged paying taxes, awarded themselves high pensions, early retirement AND expected the credit boom to roll on forever - it could not. There are many innocent hard working Greeks who are now suffering - but also many greeks who wanted at least half of a free lunch.

Of course the bankers and their enforcers (ECB, IMF) would have the world believe that ALL of the blame lies with the Greek people and that THEY ALONE should suffer so that the ridiculous inequities and venal greed of fractional reserve banking can continue unchecked.

The Haze believes that the Greek people are right to rebel and wish them every success in standing their ground against the bankers who will happily enslave them otherwise.



Some UK banks have exposures in Greece and if they do default as seems likely then the subsequent European financial contagion will surely reach these shores. 

Many people are concerned by this and rightly so - but The Haze thinks that it would better serve us now to reflect on the profound similarities between the financial situation in Greece and our own here in the UK..

Here are the similarities:

(A) False growth fuelled by debt

The UK had many years of apparent boom growth - but what is now clear is that this growth was unsustainable and not built on an increase in productive capacity - but on the profits of the financial sector that was making the loans itself, a house price bubble, public sector spending and hugely overpriced projects funded via the con trick of the PFI initiatives   .


(B) No money saved during debt boom

The UK borrowed more money during the boom (instead of saving money) and now has a high ratio of net debt as a percentage of GDP (nowhere near the scale of Greece but still high)


(c) Annual deficit out of control

The UK has a year on year financial deficit that the current government is trying to reduce.


(d) IMF applauded austerity choking growth

The IMF wants the UK to impose austerity on UK citizens (and the government is complying)


(e) Citizens fighting back

The government is meeting resistance to austerity from outraged citizens who don't see why they should pay for bank inflated bubbles (or are against cuts without any particular rationale)


(F) Debt increasing as growth stalls

Austerity is not working as a way of reducing either the UK deficit or the UK total debt, as financial indicators pile up to suggest that the growth necessary to pay off the debt is not emerging.


(G) Fractional Reserve Banking as money supply.

The UK has the same broken system of money supply as everywhere else - fractional reserve banking where money is created as debt. No debt for A = no credit for B - debt that is paid off simply ceases to exist so... less debt = less money = less growth.


(H) High Debt/ Low Growth trap

The UK is caught in the same classic low growth / high debt trap as Greece - in order to even maintain debt at its present level the UK economy has to grow - but in order to grow more money needs to be in the economy - but as the government is committed to spending CUTS - this is not possible - and the level of private borrowing cannot increase either as people lose confidence and try to pay down debt rather than take on more.  


All of the pre-conditions that have led to a disastrous debt crisis in Greece, Ireland, Portugal and now potentially in Italy and Spain exist in the UK.

This is no surprise as we use exactly the same broken system of money supply as the rest of the world (fractional reserve banking) and led the world in de-regulating the markets that have caused these disasters. 

The UK was happy to transfer its wealth generation away from manufacturing to financial services, which NOW means that its growth is linked to a very volatile financial business environment that stands on the brink of collapse in Europe.


*** Haze Main Comment June 19th 2011 ***


The grotesque financial chaos that is currently engulfing Europe will toss millions into destitution; costing them their jobs, family homes and futures. This wave of disaster is surging towards the UK slowly but surely – and people all over Europe can explain to UK citizens that the ruin of Fractional Reserve Banking does not recognise national borders.


What can we do to make these financial booms n busts a historical curio rather than a present day nightmare.


It is only by a fundamental reform of banking and our system of money supply can this endless stream of financial disasters be ended.


We must adopt and expand on the proposals put forward to the Independent Commission on Banking (ICB)  by the Positive Money campaign, NEF (the New Economics Foundation), and Professor Richard Werner of the University of Southampton – that argue convincingly that a return to a 100% reserve requirements for banks is the only way to fix our broken system of banking and money supply.

The changes they suggest are modest and in many ways the opposite of radical AS WE CANNOT CONTINUE WITH THE STATUS QUO.


Fractional reserve banking affords privately owned banks a state subsidised and underwritten monopoly on the creation of money as debt – banks then only give loans to people and projects that give them quick profits. This process undermines democracy, ruins the economies of nations and transfers more wealth to already wealthy people who have done nothing to deserve such fortunes.


Banks have proved to be very poor judges of what healthily grows an economy – hopeless at self regulating their own crass self interested salaries and bonuses and dangerously unaccountable when their reckless gambling needs to be bailed out by yet more taxpayer debt.


Enough is enough – modern banking is unethical, unfair and RIDICULOUS.


The Haze urges readers to take the fight to the banks in any way they can.   


The people at the Positive Money Campaign are the best standard bearers we have at present – they are putting forward well thought out proposals to sort this mess out and all right thinking people should join their campaign – and force the ICB and the government to implement their core agenda for change.

Who gets the 36% pay increase...?

Who would you recommend to get a 36% pay increase this year?

Perhaps the Fukushima 50 who risked their lives time and again to bring the nuclear power plant in Japan under control?

Nurses? Carers of sick, disabled and / or elderly relatives and friends?

Troops in Afghanistan?


Ordinary folk hard hit by rising costs and the recession?

Nah - surely the truly deserving group are....

... US & UK - Bankers!

Yep - after barely a pause for breath, the bankers are back at the trough like the 2008 taxpayer funded bank bailouts never happened!

Never in the field of human greed has so much more cash been awarded to so few by so many - particularly astonishing as the 'few' keep on doing such a great job of ruining the lives of so many!

The [FT] has the low down on the lorry loads of loot that the bankers are carrying off!

Here are the highlights!

• Bank chiefs’ average pay in the US and Europe leapt 36 per cent last year to $9.7m, according to data compiled for the Financial Times, despite variable performance across the sector.

[The Haze loves that! If you have been tossed out of your home and lost your job as a result of the banker created recession, then remember its just 'variable performance across the sector' - and here we were thinking that 2008/9 meltdown, massive bank bailouts and subsequent ongoing global recession were something slightly more serious than that!]

• Two of the industry’s biggest names – Jamie Dimon, the JPMorgan Chase chief executive, and Goldman Sachs’ Lloyd Blankfein – were paid more than 15 times their 2009 earnings.

[So that's $21,000,000 for the hard pressed Mr. Dimon and $19,600,000 for Mr Blankfein.]

• In the UK, the chief executives of Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland were awarded cash and stock bonuses valued at more than $26m last year. That contrasts with 2009, when all four declined bonuses in a nod to public and political furore.

[Glad to see that state ownership doesn't put the brakes on the banking gravy train! Strangely the bankers think this is all perfectly fine! The real story is not bankers greed rewarding themselves for monumental failure with huge increases it is in fact... ]

• “...the progress on ensuring bonuses are deferred, paid in shares and subject to clawback and performance targets, rather than the headline figure,” said Angela Knight, British Bankers’ Association chief executive.

[Ah The Haze understands - so its not HOW MUCH these people are paid - it is how the figures appear to the public who have a bit of a bee in their bonnet about bonuses at the moment]

anyway we have the FT to help us with our analysis!

• "The leap in average pay last year for the chief executives of 15 leading US and European banks suggests the era of contrition for the financial crisis is well and truly over."

[Really! Sarcasm is beneath The Haze but.... REALLY!!?!? ]

• Bankers rebut politicians’ accusations that they have simply returned to business as usual after two years of paying lip service to public indignation

[ Well what would us ever give us that idea! The meddling media I expect! ]

• Even at $14m, Mr Blankfein is earning a fraction of the $70m he took home in 2007.

[you have to feel sorry for them really]

• Global regulators, convinced that bankers’ reliance on bonus payments encouraged excessive risk and short-term decision making, have demanded banks overhaul the structure of executive pay to align risk better with long-term institutional performance. Banks have responded largely by altering the mix of pay awarded, rather than reducing the overall amount.

[Well quite - it was the only feasible solution as bankers contribute so much to society -]


Haze comment: Once again the bankers have proved that their inflated sense of their own self worth is matched only by their greed. They are running circles around the regulators on pay and bonuses.


All of the pre-conditions that caused the 2008 financial crash are unchanged - as we have reported elsewhere - traders are taking bets on the next financial crisis and it must surely be on its way.


The politicians who are failing in their public duty to protect the public from the banks will never be forgiven when the next set of bank bail outs is needed - of course the bankers will have pocketed a fortune of fortunes by then - meanwhile we lose home helps and libraries to pay for it.


if anyone needed an example of the very flower of capitalism then this is it! What will it take for us to rebel?