With the governments of the world clearly in a tailspin, it is difficult to sort the wheat from the chaff and this hasn’t been helped with respect to our own economy, when doubts have been cast on the high reputation of the last Chancellor, and few seem to trust our current one. There are some extraordinarily wealthy people who are buying up companies at this very moment at knockdown prices, there are others who are complaining that they’re in trouble. I find it incredible that, in the middle of this crisis, Bombardier have contracts for new aircraft for companies, when there appear to be dozens of aircraft grounded due to the collapse of the companys across the globe. It is this level of irrationality that makes me feel that this panic has in some way been engineered, or if not, is perhaps not as serious as the politicians would like us to believe
Somewhere, someone has put the frighteners on us all, and I just wonder, just how valid this is. Pensioners who can afford to, are forced to save for that evil day when they can no longer look after themselves, and yet the government insists that if they have savings they will be required to pay for themselves for care in a nursing home. So we put money into savings accounts and buy stocks and shares that we think are blue-chip and consequently believe them to be safe. Suddenly we discover they ain’t safe, and we lose that security we were banking on, because the government, while happily proposing to take our money, did nothing to secure it.
Unless we also lose our pension we still have to shop, buy clothes – how ever little, travel, and give small gifts to our great grandchildren, so to some extent the economy is going to be bolstered. Apart from those poor devils who lose their jobs, this will be the status quo of a very high proportion of the whole of our nation, we have to eat, we have to clothe, public transport will still be running, hospitals will still be full, and life for a large proportion of us will be relatively normal, except that we might just be peering over a shoulder, to see what the government has in store for us. It is this latter that frightens us, not because of the collapse of the financial markets, because we can’t make head nor tail of that, but because we do expect swingeing increases in taxation as a result of enormous bailouts, and possibly some irrational thinking by our Chancellor.
As I understand it, the real problem is the liquidity of money in the commercial sector. It has been for many years an accepted policy that business is run on an overdraft, just think of an unnamed company the size of Tesco’s, the vast number of shops, the incredible variety of products on offer, and the inevitable waste, all of which must cost millions, and is unlikely to have been supported by cash, so the unnamed company is paying the interests to the banks on the money borrowed, at this moment. This must apply to a tremendous amount of the high Street, so why the panic? From where I sit I see a feeding frenzy by the media, government officials running about like chickens with their heads cut off, and yet me and my much younger neighbours can still sit down to a reasonable meal, go shopping in the car, they even go to work, and even if we choose, go and spend a night in a hotel at a seaside resort. Anybody who knows anything about finance will probably think me a total idiot, but then, I don’t think I’m alone, because I am finding the whole business of so-called meltdown to be difficult to understand, and believe that it contains elements that have nothing to do with me, that I would find irrational, and even suspect.