Corruption

...and we still don't seem to know what to do about bankers!

The Bank of Scotland, whatever is now left of it, is 312 years old. That of England just two years older. Ever since the banking system has been built on state protectionism, corporate welfare, monopoly privilege and, at its heart, a gigantic fraud.

The fraud was that a goldsmith could give both you and I receipts for my gold stored in his vaults and make money on both - from me a fee for keeping my gold, from you interest on the receipt you had borrowed from him. Indeed they found they could duplicate this so frequently, fraud upon fraud if you like, that though gold is perhaps regrettably no longer the basis of our money, the "hardest money", real "hard cash", amounts now to just three per cent of our total money supply in terms of everything we all have collectively borrowed and deposited.

To be fair, most goldsmiths at least issued notes of their own. Customers - both depositors and borrowers - chose which goldsmith to bank with on their reputation. If they became overstretched, issued what was felt to be too many receipts for the same gold, their notes would be less desirable in trade, there may even be a "run" when all the receipt holders tried to get their "real" money, the gold, out of the bank, which of course had much less gold than he had issued such receipts for. Nowadays, however, what they create and destroy in their lending business is denominated in the national currency, a currency issued nominally at least, by the state and guaranteed by the state.

This means it is no longer a private affair between a bank and its customers as to whether their business practices jeopardise their customers' savings; it is a problem for us all. We have ceded control of the supply of money issued in our name to private businesses whose main aim is to make profit for themselves and who, in the course of that otherwise noble pursuit, play fast and loose with the very air the entire economic system requires to function. And states protect them, bail them out as seems about to be the case in the US to the tune of almost countless billions, because they have to guarantee the currency they have so little control over.

Regular readers will know I am very fond of a quotation from Josiah Stamp, Liberal politican, Chairman of the Midland Bank in the 1920s and reputedly second wealthiest man in Britain in his lifetime:

"Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again.

"However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits."

It rather seems to me that with the events of the past few days, we may be "taking the earth away from them" (or, more accurately and nauseatingly, buying it back from them) which they have stolen from us with their inflationary approach to money, but leaving them the power to create those deposits all over again with which, in the next bubble, they will buy it all back again.

Everyone seems to think that money has somehow been pretty constant. The way it works I mean, not whether we call it shillings and guineas or pounds and pence. But the current confidence trick really began with the depression of the 1930s and the work of two extremely wealthy, powerful men in the US who persuaded the government of their day to set up the system that enabled them to create "our" money according to their corporate priorities. The results of John D Rockerfeller and John P Morgan Jnrs' work was the Federal Reserve and the rapid ramping up of fractional reserve banking, and the eventual demise of real solid backing for that currency.

If the current crisis really does turn out to be the "big crunch" at the end of the cycle begun by that 1930s "big bang" we should be ready with policy to replace that fraudulent, anti-competitive, oligarchical system, designed by the very wealthy to keep them that way for little actual productive work with something different. Entirely different. I do not detect any mainstream politicians with the cojones to say so. Our governments and politicians are but eunuchs to the bankers, and the longer that continues, the more the vast majority of us will suffer.

...or maybe that should be "New Labour Years: Clause Four to Guinness Four"...

I remember it quite well; as a blue button on the floor of the Stock Exchange in early 1986, though my stock-jobbing firm did not deal in brewery stocks the partners were taking a great interest in the Guinness-Distillers takeover as their future sugar daddy, merchant bank Morgan Grenfell, were in the thick of it as corporate financiers to Guinness. Then (and maybe now for all I care) the "Takeover Panel" was a committee of senior city figures who acted as a sort of a referee to enforce rules on firms and advisers involved in take-overs of listed firms.  read more »

As if getting your business park's planning permission wasn't a nice enough present, now the Labour party is going to give all the Abrahams money back! What a bargain.

Labour to return donations - Telegraph:

Gordon Brown has announced that more than £600,000 that the Labour Party accepted without disclosing its true origin will be returned.

If ever there was a good day to lose an MEP, today must be difficult to beat.

The former Lib Dem member for somewhere up north will be inside page stuff tomorrow compared with bent-as-a-nine-bob-note Labour donation scandals, yet again.  It utterly beggars belief that anyone would imagine that donations made via someone else were right and proper.  Mind you there always were stories about a certain landlord in Oxford forcing his tenans each to give Labour small amounts on his behalf so he would not go above he notification level each year.  So maybe it's endemic.

It seems according to Sunday's Independent that his Priory clinics have been treating 800 British troops who served in Iraq and are suffering from psychiatric illnesses.

Now, don't get me wrong, I think our treatment of British "vets" is scandalous compared with the value some other nations put on looking after those who have put their lives on the line for their country and I am sure that many more probably deserve Priory type standards of assistance. But if this was Haliburton and America we'd be screaming blue murder about contracts for favoured insiders.

Of course the alternative, properly funding public sector mental health services, is just unthinkable these days, isn't it. And a far cry from W H R Rivers at Craiglockhart.