The Bank of England really is a scam on the UK taxpayer. We borrow money from a bank that we own, pay interest on it, and only get 25% of the profits back. And then, as soon as Mervyn King’s banking buddies get into trouble through greed and wrongheaded stupidity, we bail them out using loans underwritten by the taxpayer.
Darling has admitted in a letter to Vince Cable, that we, the taxpayers, will likely lose money on the loans extended to Northern Rock. Why? So that the Chief Executive can get his big bonus payoff when the private equity buyout comes off?
If it comes off.
The private equity firms aren’t going to buy a lemon. Oh no. They’ll make sure the taxpayer carries the can, so they can buy up what remains of the business in the January sales.
Yesterday, King gave signals that the Bank would probably be reducing interest rates in the new year, which resulted in further devaluation of Sterling against the Euro. That’s despite acknowledging that inflation will continue to accelerate. How does that work, then, Merv?
What a circus!