Jump to content

Am I Missing Something Here ?


Canada Bob

Recommended Posts

Am I missing something here, on how Governments raise money...

From what I hear when the Government is in debt and needs to borrow money, they print off Gilts / Bonds and then auction them off to the Bank of England {for the most part}. The Bank of England buys the Bonds using the money that Gordon's printing press is knocking out the now. If that's the case why don't we cut out the middle men, {the Bankers}.

These so called "Gilts" that they're printing up, what makes them Gilt ? what security does the Government have to back them up ?

How can a country so seriously in debt issue paper that anyone {other than itself} thinks is a safe bet ? What happens if the Government isn't able to pay up on the Bonds ? does someone turn up with a truck and cart off the the Queen or the Crown Jewels ? or do we just hand over the keys to France, Germany, Russia or Saudi ?

Why don't Gordon just mail out a Bond worth a Million quid to all of us, we could then use that as collateral to buy houses, cars, TV's, season tickets etc, wouldn't that get the economy back on track.

Can someone explain to me how this works ? it seems an absurdity to me, but if it does work then I want in on it.

I've had a shagger of a run on the horses and the football the last couple of weeks, so if there is any easy money to be made I'd like a piece of the action.

Edited by Canada Bob
Link to comment
Share on other sites

I've had a shagger of a run on the horses and the football the last couple of weeks, so if there is any easy money to be made I'd like a piece of the action.

There's got to be money to be made by abusing this ?2,000 car subsidy scheme. Surely all you need is a dodgy car dealership (which shouldn't be difficult) who will split the money with you for completing the paperwork without any cars really changing hands.

Link to comment
Share on other sites

I've had a shagger of a run on the horses and the football the last couple of weeks, so if there is any easy money to be made I'd like a piece of the action.

There's got to be money to be made by abusing this ?2,000 car subsidy scheme. Surely all you need is a dodgy car dealership (which shouldn't be difficult) who will split the money with you for completing the paperwork without any cars really changing hands.

No doubt, if there is a will there is a way, or is that, if there is a Pound to be made ...

When you received a replacement windscreen for your car, without losing any no claims discount on your insurance policy, many small garage repairs went through as windscreen replacement, paid for by your insurer.

The insurance industry woke up to this when twice as many windscreens were being put into cars in comparison to the amount being manufactured.

No doubt this time it will be twice as many ?2000 cheques as new cars being sold!

Link to comment
Share on other sites

I've had a shagger of a run on the horses and the football the last couple of weeks, so if there is any easy money to be made I'd like a piece of the action.

There's got to be money to be made by abusing this ?2,000 car subsidy scheme. Surely all you need is a dodgy car dealership (which shouldn't be difficult) who will split the money with you for completing the paperwork without any cars really changing hands.

You could maybe get away with not having the car but I think registration documents are required by DVLA and proof of scrapping the vehicle.

Link to comment
Share on other sites

I've had a shagger of a run on the horses and the football the last couple of weeks, so if there is any easy money to be made I'd like a piece of the action.

There's got to be money to be made by abusing this ?2,000 car subsidy scheme. Surely all you need is a dodgy car dealership (which shouldn't be difficult) who will split the money with you for completing the paperwork without any cars really changing hands.

Errr... giz a call mate... :rotflmao:

Link to comment
Share on other sites

Never mind the 2,000 quid on the cars, I'm still mystified as to how the Goverment can float the country on pieces of paper, these so called Gilt Bonds, what makes them gilt ? what collateral secures them ?

I have an uneasy feeling that the collateral is the broken backs of this generation of tax payers and maybe the next.

How can Bonds be issued by one arm of the Government and then bought by the Bank of England, using money they are printing and the country be any better off ? how the f*ck does that work ? if it does I want in on it...

Quiz night at The Highlands {just next door} tonight, I think I'll slip that in as a question, 'cause it has me beat...

PS...

Just had one of the Wwigin Lads on the phone, mentioned it to him, he says {if I've got it right} that...

The Government prints up bonds, they sell the bonds to the Bank of England, they pay for the bonds with all this money that's being printed {this is where I lose the plot}.

The end run is, the Bank of England finishes up owning "assets" well they call them assets, the rest of us would call them a debt {from the Government}, they then start trading off these "debts/assets", making what they can on them.

BUT !!!

Aint trading in debts as though they were assets {worth having} what got us into the sh*t in the first place...

How can you float one debt on top of another without sinking deeper into the sh*t ? I want to see how this is done !!!

Edited by Canada Bob
Link to comment
Share on other sites

CaleyD... a serious one for you here, I'm not being flippant...

Can you walk me through this scenario, I really can't get my head around how Alistair expects to float us out of debt by adding more to the debt ? surely that sails us into deeper debt and more dangerous waters ?

It just don't make any sense to me, sounds like Alistair's in Blunderland to me...

Link to comment
Share on other sites

It's all pretty straight forward really.

A Bond is nothing more than a loan.....so if you "invest" in a Government Bond then you are doing nothing more than lending them money for an agreed rate of interest and repayment with a certain term.

People quite often use the word "guaranteed" when talking about government bonds, but the reality is the same as with bonds/investments with any company. The guarantee can/is only honoured if they are able.....if they're not able, then they go bankrupt and you join the queue of others with a hand out looking for something back.

However, unlike a normal company that might sell bonds to investors, the Government has a neat trick up it's sleeve. It makes us pay the interest on the bonds we've bought....it's called taxation.

It's a wonderful scheme really....you lend them money, they tax the erse of every penny you earn (sometimes they might tax you 2 or 3 times on the same money) and then they give you some of that back and call it interest on the Bond.....they can't lose.

Link to comment
Share on other sites

I understand the general theory of Bonds Don, but I can't follow the logic of how someone in Debt {the Government} can raise money by going into more debt.

From what I can see, the Government prints off Bonds which they then auction off via The Bank of England, who for the most part turn out to be the buyers of the Bonds, paying for them with all this quantitative eased money that's being printed off. So... how can this help, it's like me printing up IOU's to the wife which she then raises money on by selling them back to me, that's obviously absurd, but that's what the Government and the Bank of England is doing right now.

How can you buy yer own Bonds with money that you don't have, until you've sold the Bonds to yourself, FFS...

The fact is this seems closer to a Ponzi scheme than anything I've ever seen a Government attempt, add to that if we tried this on with the Banks we'd be locked up for a long time. Not only is it fraudulent but it's criminal as well, but if it's the Government doing it, it must be OK, long as we don't notice {or understand} what they're doing.

They can't magic money out of thin air, even though this seems to be an attempt to do so, nor can this "magic money" credibly bail out the Nations debt. The only thing I can see it doing is destabilisng sterling which if all the other ships weren't sinking almost as fast would be funny money already...

I'd really appreciate it if you or anyone can explain how this "scheme" works, it seems a closed circuit event to me, a Con if ever there was one...

As far as the Government "guarantee" the only guarantee is that workers will always work, and from the sweat of their brows and their backs broken by carrying this debt, they will carry on paying extortionate taxes for the foreseeable future, that's the "guarantee" that "we" will pay the interest for the next 20 years at least, or 50 years if Alistair really is in Blunderland...

Edited by Canada Bob
Link to comment
Share on other sites

It's pretty much the basis of capitalism. Finance almost goes in to the realm of zen or quantum physics in that role. Nothing actually exists except what's in the mind. It's a shaky foundation to build the entire foundation of Western civilization on (and physics but that is the goal to marry up quantum and classical). A case of don't-look-too-hard-and-it'll-be-alright. It's worked for a few decades but it was always a house of cards.

New Scientist did a good paper on it a few months ago. Many of the financial institutions were using mathematical models but there were two fundamental failings:

1. the data was extremely limited. Really we only have good data from around the 1950s/60s.

2. the financial system is based on confidence (not the statistical definition) and that just doesn't follow the rules

Link to comment
Share on other sites

It's pretty much the basis of capitalism.

Aye, so it seems, but what's going on is ludicrous, yet folks seem to be clapping rather than howling in derision...

I'm lost for words at how the Nation can't see {or doesn't want to know} what's going on. When the ship's sinking I guess we put our faith in the Captain, hoping that he knows what to do. The worst thing in this case is, it won't be the Captain who goes down with the ship, it'll be everyone in steerage.

I'd still like to know "where the cavalry {the money} will come from" !

Bonds issued, again as though Debt is a commodity by a bankrupt Government, passed off as though of value to the Bank of England, who then take a commission for auctioning off these Crazy Bonds, to themselves FFS !!!

Am I misssing something here ? I really want to know how this can be passed of as a credible solution to the shyte that we're all in... Has everyone gorn mad ??? yet IF this strategy works how do we get a piece of the ACTION rather than becoming the holders of the DEBT !!!

I don't know if any of you watched Dispatches on CH4 tonight, they were going over how the melt down started, and how Glorious Gordon {thinking he knew what was going on} made one blunder after another, having to retract his statements and intents from one day to the next. These events were just a few months ago, does anyone think he's any idea of how to cope with what's to come in the next few years.

Here's the link to tonights Dispatches program, you can watch the program on line, at least in the UK that is...

How long will it last...

One thing you can be sure of, this recession/depression or what they'd have us call "a Credit Crunch" will hit us more than it will hit the cosy lifestyles of the double dippers in Whitehall.

Where's Guy Fawkes when you need him... :rotflmao:

Edited by Canada Bob
Link to comment
Share on other sites

You're over complicating it all and putting things together that don't necessarily fit....again partly due to eejits in the media not really knowing what they are on about and trying to cloud it to make it look more sinister than it perhaps is.

Bonds don't create any "new" money. They simply move "the cash" from private hands into government hands.

All these millions/billions sitting in private individual/company savings/current accounts aren't helping the countries situation, so the government eases that money in to circulation by offering these "guaranteed" bonds, and with interest rates so poor and confidence in the banking system so low then it makes it a relatively attractive proposition unless you believe the economy/country will never recover.

So yes, they are increasing the countries debt....but we knew that was going to happen anyway. And when just about every major financial force on the planet is in the exact same boat as you then you're only left with one way to turn to raise the cash that's needed.

It's not ideal....but there's really no other option. There's a chance you might not get your cash back from the Government, but there's an even bigger chance that if they (government) can't raise funds then the money sitting in your bank is going to end up worthless anyway.

Link to comment
Share on other sites

Bonds don't create any "new" money. They simply move "the cash" from private hands into government hands.

That's entirely my point though Don, what they are doing is no more than a Ponzi scheme...

All these millions/billions sitting in private individual/company savings/current accounts aren't helping the countries situation, so the government eases that money in to circulation by offering these "guaranteed" bonds,

Agreed...

and with interest rates so poor and confidence in the banking system so low then it makes it a relatively attractive proposition unless you believe the economy/country will never recover.

I think there was some evidence of that when Bonds offered in the last auction went unsubscribed...

So yes, they are increasing the countries debt....but we knew that was going to happen anyway. And when just about every major financial force on the planet is in the exact same boat as you then you're only left with one way to turn to raise the cash that's needed.

With all due respect Don the above doesn't relate to the trick that the Government and the Bank of England is trying to pass off on us.

Here again is my concern...

The Government prints Bonds and asks the Bank of England to auction the Bonds, the Bank of England is almost the sole purchaser of the Bonds, paying for them with the quantitative eased money that they are printing the now.

The end result is, the Government can't print up money, so it gets the Bank of England to do it for them, and then the Bank hands the cash over for worthless fekkin' Bonds !!! This trick gives the Government enough money to gasp for a few more breaths while it figures out what to do next... at the end of these days the pigeons will come home to find the Nation Bankrupt...

This Government bankrupt of sanity, morality & ethics not to mention money, is engaged in an enormous con trick !!!

A Bond issued by a company or a Government has to based on something of value, something tangiable, that used to be Gold, now it's "Promises", gawd help anyone trying to cash in a promise...

The ONLY collateral that the Government can give is that, when the Government can't pay the debt the Tax Payer will !

That's the only collateral these Bonds have, not Gold, just sweat and tears for many years to come, correct me if I'm wrong on the above, but facts and statements from the Bank of England say I'm right...

This one's a bit technical, but...

You'd be better off with Brooke Bonds...

Alistair in Blunderland...

Edited by Canada Bob
Link to comment
Share on other sites

This helped my poor little brain understand it better. The 5 parts are forty odd minutes.

Certainly puts it in Laymens terms, and shows the con trick for what it is...

The trouble is, few people ever think it through :rotflmao:

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue. : Terms of Use : Guidelines : Privacy Policy