Locusts, Leeches and Vultures

Financial Services companies are locusts in society, and if anyone is still in any doubt about the level of greed/immorality of bankers then they need look no further than the latest news about HSBC mis-selling bonds which systematically stripped vulnerable old people of their hard-earned money/nest eggs ...

At the same time, ambulance chasing lawyers are like vultures, chasing any opportunity to profit from someone else's misery and pushing people to make fictitious claims (e.g. whiplash injuries). It is almost ironic that lawyers are trying to feed off the locusts now too, following the widespread mis-selling of insurance (PPI) by banks ... 

Oh what a corrupt, rotten, immoral world we live ... and whilst we are on this topic let's not forget the immoral behaviour of Insurance companies, the leeches, who have recently been exposed for profiting heavily from passing on the details of accident victims to ambulance chasing lawyers (and in the process pushing up car insurance premiums).

These leeches promise the world to get their hands on your money, but when there is a risk of paying any money back they'll use any trick in the book to wriggle out of it.  For instance it has recently been revealed how the vast majority of insurance companies aren't checking prior accidents/claims before providing car insurance (despite it costing pennies and being really easy to do) because they prefer to take a huge chunk of people's money knowing that they'll never have to pay any of it back (nb they carry out these cheap/simple checks as soon as you try to claim, and then use this to relinquish themselves of any liability).

The current state of the economy is due to successive inept and corrupt Governments choosing to believe financial services (e.g. casino banking, counterfeiting banking and insurance companies) to be the key to the future prosperity in the UK ... when in reality, just as locusts, these groups systematically destroy value, not add value, to an economy!

Unless these people are stopped and made to pay for their actions, they will bleed the country dry and the vultures will feed off any remains. The bankers and insurance executives will then try to push themselves onto other emerging economies to feed/leech off them (but places like China have already seen right through them - and anyone found trying to destroy their economy like the bankers have here would be tried for economic sabotage and hanged).

Hypocrisy, corruption and the 'battle' ahead

Bankers have profited greatly from trading/gambling with other people's money and creating, packaging & trading 'dishonest' & 'socially worthless' financial products. The bankers were also closely aided & abetted by an incompetent & corrupt government - who proactively relaxed the rules so that bankers could act more recklessly and gamble using ordinary people's money (so they could build short term 'economic growth' upon it).

They allowed banks to integrate traditional high street banking with banking focused upon trading/investing securities (through the removal of previous barriers put in place following the last great depression). The Government also adopted a laissez-faire approach to the types of products & securities created/traded, whilst they also talked up (and profited from) the housing market (e.g. do you remember all the flipping of MP's second homes?) and allowed self-certification/120% mortgages to be introduced. Yet the Gordon Brown keeps telling us our crisis was caused by America!

As all the gambles of the corrupt bankers started to fail, and all the toxic assets created by them became clear, the Government bailed them out with tax-payers money, to reduce the risk of such banks collapsing and to avoid millions of ordinary people (i.e. voters!) losing their savings. The rest is history, and will arguably condemn the UK to history for generations to come - as an indebted and devalued nation, struggling with spiraling debt, unemployment and an ever increasing tax burden (targeted mainly at the hard-working middle class - as the rich pay huge sums of money to avoid any paying any tax at all).

Government leaders have ignored the fundamental issue (e.g. the integration of 'gambling' with 'traditional' banking) and have failed to solve the problem. To me their explanations for not doing so are clear - denial, self interest and greed - and the bankers are once again paying themselves massive bonuses, buoyed up by taxpayers money given to them in bails outs (which will have to be paid back through increased taxes, for instance covering the toxic assets left over from the bail-out of Northern Rock), and due to the Bank of England 'printing money' (QE) only for them to use it to start a spiral of gambling once again (rather than lending it to otherwise viable businesses)! Spin counts for little, action counts for a lot ... and this Government has done lots of the former but very little of the latter. It has largely ignored the advice of the Governor of the Bank of England, and the head of the Financial Services Authority too!

In China 'economic sabotage' is a major crime which warrants the death sentence, yet here in the UK no bankers have been challenged, arrested or had their assets seized! In fact we have seen quite the reverse - as they once again receive billions of pounds in bonuses as they rebuild their 'house of cards' with tax payers money. The few heads of banks who left office and were made the 'scape-goats' of this corrupt industry also left with massive payoffs and pensions too (Sir Fred Goodwin, RBS).

Bankers, supported by the politicians, have enacted 'economic sabotage' on the UK, yet none of them face criminal charges (never mind the 'death sentence') or have had any of their 'assets seized' (n.b. yet most of their wealth could be classified as 'assets from crime'). Gordon Brown likes to create the illusion of talking tough, but has done nothing to address the sabotage and daylight robbery that has taken place*. One might think this is something to do with the pressures of sorting out the economy, but this could not be further from the truth. The Government has been looking to extend the "Proceeds of Crime Act' (an act brought in to deal with 'organized crime' and to seize assets) ... but it has not focused on those seeking to 'profit' from the nation whilst creating 'economic sabotage' ... and our hypocritical & corrupt leaders in their 'wisdom' have decided to quietly (and underhandedly) use it to give more power to Councils to seize assets from 'minor offenders' instead!

Hypocrisy, corruption and double standards ... and whilst such people continue to be in power 'economic sabotage' will continue to go unchecked, with laws designed to protect them & allow them to pillage, and more laws introduced to stop & punish ordinary people for any minor misdemeanor (e.g. late paying a parking fine) ... nb even the Police Federation has raised concerns about this! However a great many politicians entering Parliament are a part of the lucrative & thriving legal profession, and are there to serve their own self-interest, as well as the existing justice system and political system (and all the bankers & landowners who 'bankroll' them).

More people need to 'wake up', 'take a look' and 'smell' what's 'all around them' ... and as they do, and they take responsibility for changing things, unrest will start to grow and the 'battle' of the future will begin ... a 'battle of values' ... and a new form of 'politics' and 'economics' will emerge ...

'For evil to flourish, all it needs is for good men to do nothing' [Edmund Burke 1729 - 1797]

US deficit rockets ... as investors ask lots of questions

As the US 2008-9 budget deficit races past $1,000,000,000,000 today, this BBC report, just like my earlier posts, starts to highlight the increasing concern of foreign investors (e.g. China & Japan) about the value of the dollar, as well as how safe their investments will be in the long run.

Changing Times - and the Changing of 'Power' ...

Following my recent post about China's desire to move their reserves away from the dollar, this article highlights that the idea is growing apace. China, India, Brazil, Mexico and South Africa last week all challenged the U.S. dollar as the primary denomination of world reserves, and today Japan's opposition party are promoting a similar idea too.  Japan holds $1.02 trillion in foreign reserves (second only in the world to China) and this article points out the fact that “if Japan and China do that, the impact will be huge”. One of main reasons given for these countries not shifting reserves away from the dollar is the fact that it would further weaken the U.S. currency and reduce the value of China's and Japan's remaining dollar holdings, i.e. the threat of losing even more money due to the dollar, rather than the security/benefit of investing in the dollar! This will undoubtedly alter the pace of change, but not the change itself, as these countries are clearly already looking at additional, and more subtle ways, of achieving this goal (e.g. Japan's suggestion of buying any future US Government bonds in Yen)!

As traditional 'power' changes, what can we expect ?

Power is set to change radically in the next decade - as the balance of 'Power' moves rapidly from the West to the East ... and as it also changes from power in the hands of the 'few' to the 'many' (i.e. 'people power' - powered by the internet).  We have often focused on the latter in this blog, but the former is also continuing apace too ... for instance take a look at a couple of topical examples below:

1. Eastern economies like China are still growing apace and some conspiracy theorists believe the West are trying hard to push national carbon emission reduction targets onto them to slow the pace of their development/growth. Developing countries such as China have predictably responded by saying they want per capita targets (nb the US emits over 4x more carbon per capita than China*), as well as allowances made for the carbon generated to create products that other countries consume (ie export relief), which they argue are the only fair ways to set emission targets & avoid 'trade barriers / wars' ... which are naturally creating debate (though I think China have a robust argument) ... 

2. The shift in power is also occurring with respect to economics and financial strength too. The US has previously been a major beneficiary of the fact that the US economy has been the largest in the world, and US dollar has been the key global currency for some time.  This has meant that resource rich nations with wealth and trade surpluses (such as Middle East and China) have often invested in the US economy and the dollar. But with the demise of the US economy, and the US dollar, China (and other investors) have been hit badly and it's now saying it wants a 'world' currency that countries can invest in instead of the US dollar (nb it has not suggested the Yuan**), which would result in a further demise of the dollar (and the US economy) ... which will ensure a lively future too ...

Troubled times have certainly not passed, it fact it could be argued that they are only just beginning ... (e.g. Russia already agrees with China in a number of these areas and other wealthy resource rich countries could well support such approaches in the future too) ... yet many people are still blissfully unaware of what's going on, or not prepared to take responsibility for doing something about it*** ... and it's still not clear when they will. 'People Power' is here, but most 'people just haven't realised it yet'. 

Perhaps when economies collapse further, unrest starts to grow and/or more conflicts break out, more people will start to ask questions and take responsibility... e.g. when it really starts to impact on them personally (ie they, or their loved ones, are badly affected by it, by perhaps losing their jobs or get caught up in some of the conflicts) ...

* China makes a lot of products consumed by the west, which if taken into account, increases all these figures further too.

** Question: Would the US have done the same thing if they were in China's position?

*** Ignoromics = People are either effectively ignorant of the situation (e.g. the overall environment) or not prepared to take responsibility to make sure it changes for the better.