Monday, January 19, 2009

What Happened To Our £37 Billion?

Borrowing Brown and Dozy Darling are running around like headless chickens to save their economic skins, after £37 billion pumped into banks disappeared without trace. Another dizzy day of a banking bail-out blitz.

It's clear the banks are in deep doo-doo but didn't let on when chancellor Darling pledged all that taxpayers cash, placing a government guarantee behind the banks as part of October's bail-out package.

The government hadn't a clue what is going on. Brown and Darling threw good money after bad and invested in the banks without digging around to discover how truly disastrous the situation really was. And that left the banks, well, laughing all the way to the bank.

RBS (Royal Bank of Scotland and NatWest) has eye-watering outstanding loans. So too the merged Lloyds Banking Group (HBOS, Halifax and Bank of Scotland and Lloyds TSB), Northern Rock and Bradford and Bingley. And it looks like the government may have to step in and rescue Barclays. Only HSBC seems to be sitting pretty - the clue is in the name.

The country's massive borrowing and £400 billion national debt is a drop in the ocean compared with the bank debt and these losses are all met by the taxpayer.

When national debt reaches a staggering height, investors take one look and do a runner. Welcome to bankrupt Britain. Investors pull the plug, borrowing and funding streams dry up, stirling collapses and the government starts to print money.

The cost is millions of jobs and a huge drop in the standard of living.

Brown's chancellor has announced another bank rescue package today, aimed at encouraging them to restart lending. But this is still about saving the banks with another blank cheque, risking billions of pounds of taxpayer's cash and borrowing deeper into debt.

The banks haven't been honest about the toxic debt on their books. Brown and Darling must stop the madness before the fine mess they've got us into turns into a full-blown economic disaster.

Taxpayers will be insuring some of the bad loans made by our biggest banks without a by-your-leave and without a word about what happened to the first £37 billion. The Orange Party believes the solution is nationalisation but with this government's track record, they would make a pig's ear out of it.

Today's raft of measures are all carefully planned to soften the economic blow as this week there's confirmation of that deep recession, growth much worse than the rosy end of 2009 upturn predicted by Darling and more gloomy economic forecasts and jobless figures.

Brown's faux pas 'saving the world' or even 'saving the banks' sent out a hopeless and dangerous message that will haunt him to the grave.

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