“It is worthy of remark, that the first borrowers must have been for the most part men driven to this necessity by the pressure of want, and contracting debt as a desperate resource without any fair prospect of ability to pay; […] The borrower is in this unhappy state rather a distressed man soliciting aid than a solvent man capable of making and fulfilling a contract; and if he cannot find a friend to make a free gift to him in the former character he would not under the latter character obtain a loan from a stranger except by the promise of exorbitant interest and by the fullest eventual power over his person which he is in a position to grant.”

An interesting quote from Grote – how then should we evaluate the varying interest rates available to borrowers today?

The Government lends my money, as a taxpayer, to the banks as bailout bonds, and charges 12% interest. 

I lend my money to the banks, as a saver, and am offered 1% interest. 

Either the Banks are a “distressed man soliciting aid” and anybody lending to them should be getting Just Compensation – or the Government is engineering a situation where the Banks are engaged in Predatory Borrowing. 

Surely the honest solution would be to allow Savers to provide the Bailout Bonds directly? 

Saul January 12, 2009 at 23:26

Does that include giros?

coco January 12, 2009 at 22:57

Back-stage – Anna Raccoon and I have been discussing a bit of a Bill that
is being slipped through as we speak.

The UK public are about to be denied the age-old right to know exactly how
much money is actually in circulation.

We have heard that Darling and Brunie are going to get drunk one night and
start printing millions of pounds of extra cash in a disused warehouse.

So how will we ever get to know how much cash is in the economy?

Please print your answer to this question below.