Old Mister Wall
on your street stood tall
on your street with your money, all

You sat at his feet
at the bank on your street
and begged with words so sweet

You knelt on his step
and for money you wept
on your knees to him you crept

Mister Wall in his bank
with usury stank
and your money you took with a thank

Mister Wall so sweet
with his bank on your street
and the repayments you couldn’t meet

Mister Wall took your house
divorced you your spouse
Mister Wall! Oh you! What a louse

you knelt on his step
and for money you wept
on your knees to him you crept

you gave him your money
divorced you your honey
Mister Wall lay in places so sunny

Mister Wall danced a jig
stuck you like a pig
Mister Wall danced a jig

Mister Wall danced a jig
you squeal like a pig
Mr Wall danced a jig

Mister Wall overlent
to those overspent
Oh! The economy racked and rent

debt took its flight
as high as a kite
this blood sucking Wallian parasite

Mister Wall cried and lied
in fear the government fried
you the people cried

What of our houses
our cars and our spouses
all threatened by Wallian louses

Idiot Bush, your taxes in millions
gave poor Mister Wall your billions
Mister Wall danced a jig with trillions

Old doggy Gordon
did the same in London
Bankers now dance a jig with trillions

© wondering dervish 2008

Well we are told that if Northern Rock goes under then the taxpayers stands guarantor. Since of course we agreed to this at the last election, and in that manner, we agreed to bail out every major UK company that goes down based on its own exposure in inherently risky ventures! Well did you? I didn’t. I suppose once we have bailed Northern Rock out we the taxpayers will then recover our money by the nationalisation of Northern Rock? I think not! The Banking industry is not subject to the same rules as the rest of us.

Well first of all banks are covered by the Financial Services Compensation Scheme, this scheme allows bank’s customers to be covered for up to 100% of their first £2000 and 90% of the next £33000 so the maximum you will ever receive if your bank crashes is £31700. I’m sure you agreed to this and read it all in the fine print. So if you have any more than £35000 be aware that if your local (I mean bank) goes down you will only be compensated for up to £35k anything above that you lose. Well why I ask myself? Does not the bank keep my hard earned cash and since they’ve taken my cash shouldn’t they be able to return my money? All of it? Well obviously no.

Why? Well banks operate based on a Fractional-Reserve which allows them to lend more than is deposited with them based on the legal Fractional Reserve. If the reserve is 20% then they may lend £400 pounds based on every £100 deposited. Check it out for yourself. In other words your bank has always lent on interest, way in excess of what it possesses. They are always overexposed and never have all of the money available to return to the depositor. If there is a crash they are not going to repay all that you deposited. The reason why a run on a bank is illegal, is because it destroys the very fabric of our modern economy – TRUST. We trust that our money is in a safe pair of hands and that everything is OK. Our token currency is fiat or a currency of faith and the banking scam depends on our trust that they have, in hand our money which we now know they don’t have. Did you vote to support this? I suspect that the only one who would knowingly vote for this is a banker.

Fair? Well all is fair in love and war! The only problem is that this is not war and it certainly isn’t love, this is a scam. A democratically sanctioned scam albeit.

Well I’ll give you the rundown on how to invest in gold tomorrow. Or would you really prefer to continue trusting in your local? You would? Really? What a load of Rubbish!

And a poem to reflect on (I’ll comment on it in due course):-
Lewis Carroll – The Hunting of the Snark – Fit the Seventh

THE BANKER’S FATE
They sought it with thimbles, they sought it with care;
They pursued it with forks and hope;
They threatened its life with a railway-share;
They charmed it with smiles and soap.

And the Banker, inspired with a courage so new
It was matter for general remark,
Rushed madly ahead and was lost to their view
In his zeal to discover the Snark

But while he was seeking with thimbles and care,
A Bandersnatch swiftly drew nigh
And grabbed at the Banker, who shrieked in despair,
For he knew it was useless to fly.

He offered large discount—he offered a cheque
(Drawn “to bearer”) for seven-pounds-ten:
But the Bandersnatch merely extended its neck
And grabbed at the Banker again.

Without rest or pause—while those frumious jaws
Went savagely snapping around-
He skipped and he hopped, and he floundered and flopped,
Till fainting he fell to the ground.

The Bandersnatch fled as the others appeared
Led on by that fear-stricken yell:
And the Bellman remarked “It is just as I feared!”
And solemnly tolled on his bell.

He was black in the face, and they scarcely could trace
The least likeness to what he had been:
While so great was his fright that his waistcoat turned white-
A wonderful thing to be seen!

So great was his fright that his waistcoat turned white

To the horror of all who were present that day.
He uprose in full evening dress,
And with senseless grimaces endeavoured to say
What his tongue could no longer express.

Down he sank in a chair—ran his hands through his hair—
And chanted in mimsiest tones
Words whose utter inanity proved his insanity,
While he rattled a couple of bones.

“Leave him here to his fate—it is getting so late!”
The Bellman exclaimed in a fright.
“We have lost half the day. Any further delay,
And we sha’nt catch a Snark before night!”

I have felt compelled to write this short note to ensure that we understand the implications of the extra-ordinary events which occurred this week. Basically in the UK we are witnessing a run on a bank, Northern Rock customers have lost confidence in the bank and everyone wants their money. With all the talk of sub-prime and financial journalism speak I’d like to ensure that we are all aware of what is occurring.

Our economies in West have become remarkably unproductive industrially and agriculturally. We simply cannot compete with the cheaper labour and cost of resources of the emergent economies – so that industrial production has migrated to the emergent economies especially China, India and the other Eastern economies. This has left us no alternative but to expand our service industries but we have found stiff competition in this sector from some of the emergent countries as they have sought to move into higher profit margin activities. With their lower costs they are seeing strong economic growth based on the strong fundamentals of industrial growth, agricultural growth and the application of new technologies. By comparison we in the UK and similar countries, are seeing the continual shrinking of our industrial sectors and the growing inability of our agricultural sector to compete in the global market. Increasingly our capital has been moving into speculative financial instruments to leverage the considerable financial wealth we still possess. Western bankers have used this to maintain their stranglehold on the world economy, with financial instruments that become increasingly abstract and that place in question the stability of our already fundamentally flawed financial system. These instruments are very efficient at shunting money around the world economy but amount to a patient pumping himself full of adrenaline, whilst he bleeds, to increase his heart rate. The more the heart rate rises, the more blood he loses and the more the blood loss is the greater the attempt of the heart to pump blood around the body. Eventually the patient loses so much blood that life is no longer viable and the heart stops.

The attempts to stabilise the condition of our economies whilst we bled, due to our inability to maintain our position as primary producers and market controllers, has led to the growth of the speculative financial markets in order to ensure that the worlds largest consumer markets (ourselves) kept buying so that we could maintain one of our strongest bargaining chips (our provision of the largest and richest consumer market in the world). This has been centred around encouraging us to invest in speculative financial instruments such as stocks, equity funds, bond markets, etc. However, in order to ensure that we are able to continue to do so in ever larger numbers so that we keep our consumer market the largest and most desirable in the world, we have been encouraged and seduced into an over valued real-estate market. Cheap credit has allowed us to buy immensely over valued property and spend based on borrowing via the equity created by the ever inflating prices. Since there are very little activities that bring in the profit margins as real estate (of course that is if you are not one of those most savvy investors who understands how to play the markets) much of that money has been re-invested into the property markets driving prices up and allowing the investor to borrow even more money to reinvest in property, which itself drives the prices up even more as we rush like lemmings to the cliff’s edge of financial economic meltdown.

Our governments upon seeing what has been occurring have slavishly served their financial masters and compounded the effects of the impending disaster. They have ensured that they have stabilised the conditions which allow such borrowing to continue by ensuring that the conditions exist to allow banks to continue to lend and maintain the burgeoning bubble. When the talk was of 25 year fixed rate mortgages we knew that the writing was on the wall, the drive was to get everyone and his mother on the credit treadmill. Two to three months ago a dear friend of mine asked me to get involved in the real estate market with him, when I investigated the market and discovered that the probable rental yields on mortgaged properties were almost equivalent to the mortgage repayments. This indicated that the market was approaching saturation. The bubble was hitting bursting point and the lemmings were rushing for the cliff face – needless to say I advised him against remaining involved in the real estate market. I also invited him to get involved in gold – but more about that later.

I said that this would be short and I’ll keep it so, what has happened is that the mortgage lenders have taken risks on borrowers in precarious economies, they were encouraged to do so, some of them were overzealous. This has increased the velocity of the bubbles growth and it has approached the point at which it is in danger of bursting. The bankers now believe that the patient has had enough adrenaline so they are voting with their feet. They know the dangers involved, we’ve seen it enough times before – the market has approached collapse point and now no one wants to lend to the mortgage lenders on the front line. Where will people get the money to continue paying their debts if the economy does not become fundamentally productive? What are we selling to the Chinese, the Indians and the other emerging consumer markets?

My advice is buy gold and silver. Gold and silver are commodities, they have historically been money and will always hold their value (even gain value in difficult economic times). As instability has reared its head in the world economy we’ve seen sharp gains in their commodity prices, because they have always been money and a store of wealth. We have lived through an interregnum which has seen the rise of monetarism (which is the control of the economy by the manipulation of monetised tokens), for the first time historically gold and silver were not money, commodities were not money. That interregnum is ending and gold and silver are returning to their natural place after the disastrous watch of the monetarists. Basically gold and silver are natural money and since it is a widespread commodity once it is widely distributed in your hands its very hard to manipulate. In the current circumstances take refuge in gold and silver. If you’re in the EU buy gold but if you can take delivery of silver outside the EU then take it you’ll protect your wealth and see a greater gain in your net worth but you need a wise portfolio to survive the coming storms. Insha-Allah I’ll be explaining some of this in coming articles.
Be careful Northern Rock is the beginning of a terrible time that’s been swiftly approaching for a very long time.