On Fri, 10 Oct 2008 08:56:30 +1100, Bill Bartlett <billbartlett at aapt.net.au> wrote:
> I don't know where "tracker" mortgages are available. Here, there are
> fixed and variable mortgages.
There are nearly 4 million such mortgages in the UK.
> You might choose to interpret that as a shortage of borrowers, in the
> same way as the employer might choose to interpret a shortage of
> people willing to accept a job paying one-tenth of the minimum wage
> as a "shortage" of workers. In both cases the interpretation must be
> considered an ideological one.
Exactly. The point being that the problem is not one of the banks needing money, but rather that the borrowers do. To me, this (among many other reasons) casts serous doubt on the viability of any bailout/rescue/investment scheme aimed at giving money to the banks. Unless, that is, there remains some part of the mechanics I have not understood, thus my question. To me, the action of government borrowing to invest in banks proves that the issue is not a lack of funds to lend, but a lack of qualified borrowers, Giving the banks more money will not change this.
This is not surprising given that the balance of payments tells us that most of the wealth in the country is imported, and not produced in the US. In unrelated, but illustrative news, the "National Debt Clock" in Manhattan, having passed 10 trillion, has run out of digits, the leading dollar sign has been replaced with a 1 as an interim measure.
Cheers.
-- Dmytri Kleiner editing text files since 1981
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