Cyprus parliament delays vote on deposit levy to Monday
Cyprus's parliament has postponed until Monday an emergency session to vote on a levy on bank deposits after signs that lawmakers might block the surprise move agreed in Brussels to help fund a bailout and avert national bankruptcy.
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#1 Mar 17, 2013
In my humble opinion I would like to suggest that the banking crisis in the Western world should never have got to this stage. In what follows I must be clear that not all bankers are bad, many have good hearts, but by no means all. The diagnosis of excessive and wreckless lending and out of control banker's bonuses was ignored or at best not spotted by governments!, and thus unfortunately the treatment of low interest rates and Quantitative Easing (QE) that followed were incorrect. This has resulted in huge and unnecessary growth in the money supply at the cost of the purchasing power of the currency. This has left the ordinary saver or family business (to give just two worthy examples) to pick up the bill through rising inflation. This has resulted, for example in hugely inflated house prices in the United Kingdom, way above what would once have been considered a fair price. The bad bankers whose actions, although legal have pretty much amounted to criminality (at least in a moral sense) have never been properly held to account (think of reward for failure).
Another problem we're up agains it that we import far more than we export, we even import more people than we export. How can this set a solid sustainable future for the United Kingdom in the long term?
The sustainable solution, for Cyprus as well as the United Kingdom, and in fact all nations is to have an equal balance of trade i.e. the import the same amount of goods and services as they export.
A very good way of correcting the problems we have would have been to use Quantitative Easing only to pay savers a decent return on their savings. This would have resulted, gradually in a less dramatic decline in consumer spending. In the long term the return on saver's savings would eventually filter back to borrowers and allow them to pay off the interest on their mortgages. This would have helped quench the ticking timebomb effect we have whereby the capital repayment due on people's mortgages are absolutely staggering.
But who am I to say this. This is only my humble opinion....
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