Are any currencies safe? Well of course not, no currency is fully backed on anything real certainly not on gold. Most counties could not pay their debts if they couldn’t reborrow or simply print more money. Printing money devalues it. Raising taxes doesn’t pay off a country’s debt because it tends to shrink the real economy and put people out of work.
Banks can’t pay their debts that’s why they need continuing taxpayer support. They make lots of money from gambling type activities and so they can afford to pay high wages and bonuses, and pensions. That’s why they deserve taxpayers support. ? !
They also give swap loans to small businesses. They are basically a hedge fund. Interest rate goes up you win, but the bank can cancel, interest rate goes down you loose. Interest rates have artificially been reduced by the bank of England to help the banks lend more to small business. No sorry, that should say, to help banks extract more money from small business. The FSA says these swaps are useful and appropriate products in some cases.
I was a financial advisor at the time of the big bang in the city of London and the formation of the FSA, in the mid 1980’s It has all been a disaster. The revolutionary government will scrap the FSA, and hand bank regulation back to the Bank of England. At least they might not be so rude to anyone with less than 50 million pounds who wants to set up a bank as the FSA seem to be. The banks will be restricted in how they can use depositors money. The city of London will be regulated, so that it’s word will again be its bond.
