Banking on fractions!

Nice to see all the big banks gleefully turning out big buck profits. The Daily Mail had a headline on Saturday suggesting that Britain was now living with two economies. One for the banks (or financial product shops) and one for the struggling entrepreneurs, the cash-strapped public services et al. All the bank chiefs crowed about performance and how well they had turned things around. Maybe they have succeeded in changing their fortunes and have a modicum of feeling for their customers. However, I still get the impression it is a case of bank chief speak with forked tongue.

We are told that small and medium enterprises are being starved of cash. That the banks are putting undue restrictions on lending. Representatives of the SMEs come on television to tell one and all that the banks must do better. Spokespersons for the banks in turn tell a different story. They claim the SMEs don't want the loans. Who is telling the truth? The economy is too important for silly games to be played.

Royal Bank of Scotland chief, Stephen Hester, is forging ahead nicely. But his bank is 83% owned by the taxpayer. I wonder if there is a board director representing the taxpayers? Does anyone know? Hester is also keen to continue his casino banking. Are we entitled to know exactly what he and his RBS team are up to? When the sub-prime fiasco was revealed to the world, it became known that loans of totally worthless value were being repackaged, mixed with other "financial vehicles", and punted round the market for unsuspecting bonus baggers to do something with. Have any of these people been brought to book?

I think it is high time the 83% shareholding had proper representation. We don't want anything untoward happening on our watch. Perhaps the Taxpayers Alliance could put forward some ideas. At the moment, the British people are awaiting VAT going up to 20%, swingeing cuts in public spending and the possibility of erratic price increases. Things could be bad for years to come. When a bank tax was discussed, Barclays got all steamed up and threatened yet again to leave the country. I think this moral blackmailing is an outrage. If Barclays are so unpatriotic let them go. It's not as if they are bending over backwards to assist in times of trouble.

The Coalition Government needs to rebalance the scales. We do not want two economies. We want one flourishing economy. But letting the banks get away with blue murder will never give us an economy built on rock foundations. They have left us with shifting whispering sands. 45 small businesses are being swept away daily.

The whole banking system needs a complete overhaul. The Northern Rock episode shows how the world of fractional reserve banking is so precarious. Get a desire for large numbers of withdrawals and the banks can't meet their obligations. They must be the only businesses that can operate on a techniquely insolvent basis and get away with it. We've pumped billions into RBS and Lloyds. We've eased the public purse quantatively or basically printed money so that the whole sorry saga continues. Only 3% of money in the system is real cash. The rest is computerised, either real or fictional. So the Government should break up these banks. Have proper retail banks and proper merchant banks. The so-called investment banks will need to be far more transparent than they are now.

It is an absolute scandal that very few have been shown accountable for this mess. Nothing in the current thinking will stop further catastophe. However, if it does happen, we should as taxpayers, all loudly say will will NOT bail out another bank. Better a bust bank than a bust economy. It would have been far cheaper to let Northern Rock go bust, set up a National Compensation Fund, and sell off the remaining assets to those who felt they could have made a go of it.

We must stop this funny money economy and build an enterprising economy making real things, selling real things, and doing real things.

Back in harness

I'm still getting sorted with my new computer arrangements. Currently I'm using this Apple Mac thing which is quite a bit different from the Windows XP I was using. All the gismos are different on an Apple. I'm told those who have them swear by them. That could be said for the XP system so it all boils down to you take your pick, etc, etc. I spent several happy hours talking to Virgin Media, Belkin and Apple call centres. Each one conveniently denying knowledge of the others existence. But, all in all, they got me wired up airlessly (or is it the other way round?).

The Apple is deemed to be a family computer so I take my turn. My desktop thing is being prepared. Hope it will be worth the wait!