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The Stalls of Higher Thought

World Bankruptcy Begins

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moneybags3NowPublic: The UK government announced a ‘blank cheque’ bailout of the country’s banks yesterday, after its £37 billion bailout in October 2008 had failed to make the banks solvent and lending again.

The currency then dropped to its lowest point in five years against the US dollar (it has hit a seven year low in trading today). A credit rating agency is considering downgrading the UK because its debts are soaring so quickly. If this happens, it will mean the government will struggle to pay interest payments and convince global markets to buy UK debt.

Jim Rogers, the co-founder of Quantum fund with George Soros, today told Bloomberg News that “I would urge you to sell any sterling you might have. It’s finished. I hate to say it, but I would not put any money in the UK.”

The UK’s citizen are currently the most indebted per person in human history, even outstripping Americans. The size of the debts are so large, the government is considering printing money to help hyperinflate away the country’s debts, using something called ‘quantitive easing’. The Bank of England was given permission yesterday to do this.

bspcommentUnfortunately this is only the beginning. While world leaders rushed to help the rich  and powerful it is every, average man, woman and child on this planet that will indeed be paying this debt for generations to come.

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Written by mattliving

January 20, 2009 at 9:05 am

Posted in Economics, Money, Politics

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