Monday, September 17, 2007

A billion, etc etc Part 448

Well by now you may have heard that Alistair Darling AKA Broon's sock puppet has effectively nationalised Northern Rock - and by inference every other bank in the UK.
He has guaranteed NR's deposits - something that completely gives the lie ( as I suggested earlier) to the statement that the BofE and the Government would not bail out imprudent lenders. But if he's done it once, there's no chance if another one ( probably Alliance and Leicester) suffers a run he won't do the same thing.
He has to. Under no circumstance, politically, can Labour be seen to stand by whilst a Bank goes bust.
But the most intriguing thing is, ok,NR had £24 billion of deposits, but it had lent about £100 billion, and has therefore been borrowing about £80billion daily to cover the difference.
So not only will Darling Darling have to payout the £24billion of customers deposits, he will also have to fund the £100 billion of loans.
That'll make the PSBR look a bit iffy.
Watch as interest rates plummet to get everyone out of the quagmire!
See banks forclose on customers!
Notice how lending dries up!
See tax rates soar!
Oh, and forget your credit card.
They're already cutting limits the minute you pay any money onto them.
Blair's Legacy? Brown's Demise.

1 comment:

Winchester whisperer said...

Missed this post of yours yesterday - glad we're thinking along the same lines!