Osborne unveils £140bn scheme to kick-start stagnant economy … George Osborne unveiled a £140 billion emergency scheme to try to avoid a second credit crunch caused by the ongoing chaos in the eurozone. The Bank of England is to offer money to high-street banks to kick-start mortgage and small business lending to prevent loans being rationed for many families and entrepreneurs, the Chancellor announced. It comes after sharp rises in the costs of mortgages and other loans in recent months as banks struggle to raise money in the midst of the single currency crisis. Sir Mervyn King, the Bank of England Governor, said that the "industrialised world have thrown everything bar the kitchen sink" at the global economic meltdown but that even "bolder action" was now required. – UK Telegraph
Dominant Social Theme: Britain is taking bold action by providing banks with electronic credits they don't deserve and have not earned.
Free-Market Analysis: The Internet has surely helped focus the mind on the insanity of central banking. Now, when we read articles like this, we can translate them immediately.
Mervyn King claims that banks need the aid of the British central bank that he runs and he is prepared to provide banks with additional resources for the good of England, the stability of the system and the solvency of the individual British working family.
Let's translate, shall we? … In fact, King is about to provide Britain's insolvent banks with a good deal of additional electronic capital. The entire event of recapitalizing these banks shall likely take about ten seconds.
Let us have some more, Sir! We want King to recapitalize us as well. What we understand from King's announcement is that if one makes a bad business mistake and one is a certain kind of bank, one can receive tens of additional millions with the press of a button. Here's some more from the article:
In the annual Mansion House speech in the City, the Chancellor said he was no longer prepared to "stand on the sidelines" and that the radical new "bank funding scheme" will be launched within weeks.
Middle–class incomes at 2005 levels due to inflation and taxes
"We are not powerless in the face of the euro-zone debt storm," Mr Osborne said. "We can deploy new firepower to defend our economy from the crisis on our doorstep. Funding for lending to the family aspiring to own their home and the business that wants to expand…The Government – with the help of the Bank of England – will not stand on the sidelines and do nothing as the storm gathers."
He added: "We are rolling up our sleeves and doing everything possible to protect British families and firms."
The bank funding scheme will allow high-street banks to temporarily "swap" their assets, such as their mortgage books, with the Bank of England in return for money they can loan to customers. It is estimated this could support up to £80bn in new loans.
The Bank of England will on Friday also activate an emergency scheme that offers six-month liquidity to banks in tranches of no less than £5bn a month.
The euphemisms are incredible, aren't they? King is "rolling up his sleeves." He's going to deploy new "firepower." He's "protecting" British families.
No, he's doing nothing of the sort.
He's pressing a button.
And by pressing that button, he's funneling electronic digits to certain cronies running certain banks that are busted. They are busted because of a stupid, corrupt system of monetary stimulation that inevitably leads to recessions and depressions.
Monopoly fiat central banking is nonsense, pure and simple. The Austrian School, if it did just one thing (and it has done much more than one thing), deserves our thanks for explaining how this monstrous system works and why it deserves to be done away with.
It is a mercantilist system of monetary expansion that uses the state as a cover for the pursuit of private interests. Those behind the system claim they need the enormous power of creating money.
But it is impossible for human beings to know how much money an economy needs. This is the fatal flaw of Greenbackerism and other fiat money schemes. Only the market can determine how much money is necessary. Money systems need to compete. That's the only answer.
Ask a Greenbacker how he or she shall determine the volume of money necessary at any given time. You won't receive a good response. This is the bottom-line fact on which all such schemes founder.
Mervyn King doesn't know how much money the banks need, either. All he's doing is pressing a button.
There's no justification for the money he's giving the banks. Supposedly, the banks will relend the electronic digits they've received. But he might as well provide individuals with these electronic digits.
The reason that King doesn't provide individuals with electronic money has to do with control. An entire elaborate system has been built up around the idea that this system of counterfeit money has to be dispensed via "banks."
Perhaps banks are supposed to have the necessary business acumen to disperse electronic money digits better than individuals. Evidently and obviously they do not.
The system, as we have been predicting for the past three years or so, is shot … finished … kaput. Too many people understand there is no justification for it.
It is not what it seems to be.
King may roll his sleeves up – or down – but they won't obscure the reality of what's going on. A small group of people – a dynastic power elite – controls money and has set up a series of elaborate justifications to rationalize the insanity of their control.
The system is rotten to the core. It is actually intended to provide a series of rolling bankruptcies worldwide that will lead inevitably to global governance. Seen this way, it's doing exactly what it was intended to do.
It is an agency of destruction that has been exposed by the twin agencies of Austrian (free-market) economics and the Internet itself that has helped provide a conduit for the appropriate exposure.
Tens of millions now understand the Way the World Really Works. The nonsensical explanations fall on ever deafer ears. Global governance, too, will likely founder on these lies. Small satisfaction, eh? …