Where do the borrowed billions come from?

[Grandad.Malky]

The coffers are empty but another 20 billion appears from nowhere.

 

 

http://www.bbc.co.uk/news/uk-politics-15907249

[chem1st]

The coffers are empty but another 20 billion appears from nowhere.

 

 

http://www.bbc.co.uk/news/uk-politics-15907249

 

And when a man suggests we build houses and do something productive, he is lamented for having 'no money'. Forgetting that we have but a currency. The manipulation of this currency being the problem.

[poppet2]

In Japan, the grandchildren continue paying the family mortgage. The way things are going that same practice will soon be applied in the UK. How are the next generation with all their student debts going to afford a mortgage?

[XXTickerXX]

A bailout package explained........

 

 

 

 

· It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism. And that, Ladies and Gentlemen, is how the bailout package works.

[chem1st]

In Japan, the grandchildren continue paying the family mortgage. The way things are going that same practice will soon be applied in the UK. How are the next generation with all their student debts going to afford a mortgage?

 

Why do people want/need a mortgage.

 

A mortgage is a form of slavery and leverage that allows for a person to sell a home for far more than it is worth.

 

Cost price of a house = half a year of labour.

 

You think somebody like me really want's to club to with a partner and both of us spend 50% of our combined incomes for 25+ years, when our combined incomes (if derived form labour) would be enough to purchase a home in but 13 weeks!

 

Buzz words for the decade are 'negative equity', 'mortgage benefit' aka SMI, 'BTL scum' and 'crapitalism'.

[ANGELFIRE1]

I promise to pay the bearer on demand the sum of....

 

Yes.. that's quite succinct . Though not entirely accurate.

 

So I'll go on.

 

Almost all of money is debt, just based on promises to pay back [with interest] to the loaners who write credit.

 

That's quite brief and simple. In fact so much so, that I hope expect to get pulled up on it.

 

 

Nah, recon you have it about right there.

 

Regards

 

Angel.

[splodgeyAl]

Somebody invented it and became very rich by borrowing it to us.

 

I was under the impressions that's how it has been done for a long time.

Pretty much so, yes. As explain on page 103 (105 in Acrobat reader) of this Bank of England document

 

http://www.bankofengland.co.uk/publications/quarterlybulletin/qb0801.pdf

[Phanerothyme]

A bailout package explained........

 

 

 

 

· It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night. The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer. The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit. The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything. At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

No need for the German tourist then, and lucky that all the villagers live rent-free and are completely self sufficient in everything.

 

But even in your scenario, a fake €100 would do the job just as well. Or just a buff envelope which has "This envelope contains €100" written on the outside.

 

In fact the german tourist has nothing to spend but empty manila envelopes purporting to contain money, but actually containing anthrax.

 

This fact quickly leaks out to make sure no-one actually opens the envelope to check the €100 is really in there.

[Grandad.Malky]

A bailout package explained........

 

.

 

 

Edited November 27, 2011 by Grandad.Malky

[Cyclone]

I did just find out that Scotland cost us 25 billion this year.

 

HM treasury seem to publish every number under the sun EXCEPT who they owe!

 

That would probably be because they don't know. Government bonds are sold on the open market and can be resold without needing to inform the issuer.

You could buy some government debt if you like.