Although I don't pay that much Tax myself I have to say that people have the right to moan about this Money being chucked in the Banks but if they were left to collapse we would be in lot worse state than this think of what turmoil on the Markets was caused when Lehmanns Filed for Bankruptcy our Bank here Barclays was in a Deal with them to take quite a Sizeable Chunk of there Business but the US Government along with the UK Government wouldn't provide Barclays with some Securities over what they were going to take on so they withdrew there offer and at that point Lehmanns Collapsed and filed for a estimated $500 Billion Debt Shortfall pretty Big Debt if you ask me.
These Banks were so Big in terms of Assets and Capital 2 Years ago that quite a lot Dwarfed Countries on this Planet in terms of Income and Actual Wealth of the Banks.
I'm afraid this is the only way out of this predicament the Private Sector can't do anything on a big scale so it is left to the Countries Governments to try and save the Economy. I can say I'm 90% sure these Bail-Out plans are the only way to try and save the World's Economies today we had some Big Growth on the Stock Markets (The Increase on the FTSE 100 was around 5.5% and Wall Street around 4.5%.)
as the Credit Freeze starts to thaw and Banks start lending again it has already been seen in Australia where Interbank Rates have lowered these are the Rates at which Banks pay Interest to another Bank for lending the Money.
The Current Rate is around 200 Base Points or 2%, last year I think it was 9 Base Points or 0.09% was the Interest Rate between Banks shows quite a big difference doesn't it but those Base Points are the main reason this Credit Crunch is continuing.
Officially the UK hasn't fallen into recession because we haven't had a Contraction in the Economy since 1992 for a Country to be in Recession they have to have 2 Quarters of Negative Growth (Contraction) although later this week our Figures for the Third Quarter are announced and it is expected to be a Contraction so we would be halfway to a Recession although really we are in a Recession now and probably through some of Next Year as well till the Financial Markets stabilise which should bring the same with the Economy.
And as much as I hate Alistar Darling (Chancellor Of The Exchequer) and Gordon Brown (Prime Minister) for the mess our economy is in but by spending more and more it is the way out of this, they have took a leaf from the American Book from the Great Depression where they created Jobs by funding Projects for the benefit of the Country like Dams in the American case and probably other Projects as well (I don't know all the Projects), In our Case we have 2 New Aircraft Carriers being built, Nuclear Upgrades (Weapon Capability), Olympics Stadium Stuff amongst other things and some thing to do with the Rail system in London all very Big Deals worth Billions of Pounds.Sorry for the Big Post I do babble on a bit but I hope it gives you some insight on this, I'm just spreading the Knowledge I learn by reading about it deeply and looking at it all.
Edited by woodyblade, 20 October 2008 - 05:22 PM.