If you are new to this blog, you are invited to read first “The Largest Heist in History” which was accepted as evidence and published by the British Parliament, House of Commons, Treasury Committee.

"It is typically characterised by strong, compelling, logic. I loosely use the term 'pyramid selling' to describe the activities of the City but you explain in crystal clear terms why this is so." commented Dr Vincent Cable MP to the author.

This blog demonstrates that:

- the financial system was turned into a pyramid scheme in a technical, legal sense (not just proverbial);

- the current crisis was easily predictable (without any benefit of hindsight) by any competent financier, i.e. with rudimentary knowledge of mathematics, hence avoidable.

It is up to readers to draw their own conclusions. Whether this crisis is a result of a conspiracy to defraud taxpayers, or a massive negligence, or it is just a misfortune, or maybe a Swedish count, Axel Oxenstierna, was right when he said to his son in the 17th century: "Do you not know, my son, with how little wisdom the world is governed?".

Thursday, 23 April 2009

A horror budget

The British Finance and Treasury Minister (known as the Chancellor of the Exchequer), Alistair Darling, announced the 2009 Budget. Based on very optimistic growth assumptions, that Dr Vincent Cable MP (a very prominent politician, economic expert, ex-Chief Economist of Shell) called as “totally dishonest” in assuming “spectacular recovery and rates of growth” , the expected national debt will reach an unprecedented level of over £1.4 trillion (above $2 trillion) but in reality it is very likely to be much higher.

As experts and politicians agree the current economic crisis in Britain was caused by the financial crisis. The financial crisis in turn, as it was proven, was caused by a prolonged and sustained loan to deposit ratio above 100% in a multiple deposit creation process. This transformed the financial system into a classic pyramid scheme. (In essence, it is the same case as of Albania in 1996 – 1997.)

However unlike the Albanian government, the Britain’s decided not to liquidate the pyramid scheme but instead they made all the British taxpayers the last participants who were forced to join the scheme The tax system is used to subsidise and sustain the pyramid. Unlike the Albanian government, the Britain authorities did not try to apprehend and prosecute the creators of pyramid schemes but instead let them continue to manage the financial system. It is a truly farcical arrangement.

The notional book value of this pyramid is massive. It is very likely to be in quadrillions of pounds in the world and still growing at a faster rate than a rate of putting money into the financial system.  As a result the British taxpayers are in the same position as customers of loan sharks. They lend the money to their victims in a “structured” way that makes the victims keep on repaying forever. Irrespective of the repayments the debt keeps on growing.

The figures given in the Budget delivered by Alistair Darling reinforce the view that the financial system plays the same parasitical and indeed criminal role on the British taxpayers as loan sharks on their customers. Unless and until the British government liquidate the financial pyramids in Britain (in practice this means letting failing banks go bankrupt whilst at the same time securing vital social interests) there will be no end to this dishonest madness. As it stands, the current Budget showed that, realistically, there is no end in sight.

1 comment:

  1. The British economy will shrink this year at the fastest rate since 1945 and suffer sky-high public debt as a result of the global financial crisis, finance minister Alistair Darling forecast overnight. You can also find information about Currency rates.