Credit Crunch

It's not the bankers who are ultimately to blame for the near-collapse of the banking system, it's the government.

The government's main purpose is to protect the nation, yet it removed (beginning in the 1980s and continuing into the 21st century) most of the regulations and mechanisms established to protect the people from market-rigging and ruinous speculation.

You can't blame the bankers for wanting to make money- that's their job. You CAN blame the government for allowing them to lend a great deal more money than they possessed.

Back in the 1970s, banks were permitted to lend three times the amount they had in their vaults. By 2005, this had risen, in some cases, by 400%: to twenty-four times. What people did with this easy credit was, primarily, to speculate in property. Most of the banks' monopoly money went on playing Monopoly. This has been disastrous for the nation because it sent rents and house-prices soaring. In the early 70s, the general rule was that a person would spend 15% of their income on rent or mortgage repayments. By 2005, this average had risen to more than 50%.

If the banks' unsupported lending had been used- like the Dutch in the 18th century- to speculate on tulip bulbs, only the rich speculators would have been ruined - the majority of the population would have been spared. But, because the speculation chiefly concentrated on the nation's houses, the people have been impoverished and many are now threatened not only with the loss of their savings and pensions backed by property assets, but also by the loss of their homes. It's a disaster. Who is to blame? The government.

It's not the banks which need to be reformed, it's the government.

We need a new government system.