Greek Fallout – End of Monetarism.

The banking crisis uncovered in 2008/09 that cost the UK about $1.5 trillion and the USA undisclosed trillions to stem runs on their banks, is now undermining European banks. Greek depositors are starting a run on their banks – and Spanish savers are hot on their heels. Those governments will also have to guarantee all deposits at the banks they license. Other western nations such as Italy and Ireland have already had the runs, of Olympic proportions, over the past twenty years – and it may seem futile to slam the stable door after the horses have all bolted.  

The cash exodus from major nations was led by tax-evaders who siphoned funds to tax-havens – including to London and Delaware. The “mountains of debt” left behind in OECD countries are far less than the “rivers of illicit cash” sloshing around off-shore. Should the two now be balanced and eliminated? The problem for off-shore banking centres such as London, while they celebrate their treasure chests filling with Greek deposits – is that those incoming funds are owed back to the depositors – they are massive debts in the UK banking system; another debt-mountain, waiting to explode volcanically.

What will become of us all?

The inevitable answer is nationalisation of all financial institutions. The banks are incapable of providing a secure service without 100% government guarantees and massive public funds. The off-shore rivers-of-cash running through the so called “the free-markets” will be repatriated from the pink-gin sunlit islands to be put to work in the real-economy. Why major nations ever trusted the creation of cash, vital investment and accurate bookkeeping to a bunch of insatiably greedy privateers will be a matter for future historians.

This is the end of the sad, mean, flawed, dispiriting, unintelligent, base, crooked and criminal “Monetarist Experiment”. Farewell to the low, muddled, selfish thoughts of Milton Freidman, Thatcher, Reagan and Bush.  Hello to a bright new future; free from loads-of-money, greedy, irresponsible freeloaders, spivs and gamblers. Just return all our cash to the tax-authorities via back-duty settlements and then bugger-off to Andorra or Rockall to play roulette for buttons, until the end of your chaotic, parasitical, deluded days. 

17 May 2012