This is the “Real Deal”

Grasping Gordon Brown’s government are not too worried about the situation we think. Consider it from their point of view: Anybody with savings in foreign currencies is moving their cash back into sterling right now at happy rates. (Assuming their bank has not gone bankrupt already.) People who fled Gordon’s high tax regime and those with second homes are selling up and coming back to England to ride out the storm – bringing their Euros with them. That’s a lot of extra cash flowing into Gordon inc. to be taxed and a few possible voters for him coming home. [He hopes]

8 October 2008: Alastair Darling MP states in BBC interview that Icelandic Authorities have reneged on their obligations to pay depositors compensation; subsequent tape records dispute this assertion. UK Treasury Dept Freezes £4 Billion of Icelandic assets to protect UK savers under Anti terrorism legislation. Treasury passes 182,000 UK retail savers accounts in Kaupthing and Heritable Banks with deposits of £3 Billion to Holland’s ING bank.

Experienced hands who saw the last downturn will have learned to recognise the signs around two years ago. (It’s an Equitable Life, Henry!)

As banks fail, the lending to companies dries up and companies who were on a knife edge drop off the cliff – Woolworths and MFI for example. People lose their jobs, which means they spend less with the butcher, the baker and the candlestick maker. Retail spending goes down, more shops and industries close, and it feeds on itself this way.