UK Finance News

The Libertarian Alliance are quite clear on their views regarding the latest proposals by the government to prop up the UK banks with further financial support from tax payers money. Here is the latest press release which makes very interesting reading.

“NO BAIL OUT OF THE BRITISH FINANCIAL SYSTEM” SAYS LIBERTARIAN ALLIANCE:
“LET FAILED BANKS FAIL”

The British Government’s latest proposed rescue of the financial system
is a fraud on the taxpayers and will fail, says the Libertarian Alliance,
Britain’s most radical free market and civil liberties policy institute.

The British Government proposes to spend up to £200 billion of the
taxpayers’ money on lending to the commercial banks in an effort to end
the alleged liquidity crisis. This is in addition to the £600 billion
already handed over.

According to Sean Gabb, Director of the LA:

“Final responsibility for this crisis rests with the authorities. For at
least ten years, the Bank of England – and the central banks in most
other countries – has kept interest rates below the market equilibrium.
The result has been an frenzy of credit creation by the commercial banks.
This led to an asset price bubble that has now burst.

“The recession we now face cannot be avoided by pseudo-scientific
manipulations of ‘aggregate demand’ It is the natural result of
malinvestment and general speculation. A return to prosperity is best
achieved not by trying to reflate the speculative bubble, but by allowing
the liquidation of bad investments to proceed as quickly as possible.

“We agree that this will be painful to those who lose money or
livelihoods. But there is no avoiding the aftereffects of an inflationary
boom.

“Governments can stand back and let weak institutions fail. This will
bring on the worst financial collapse since 1931, and be followed by a
nasty recession. Or they can spray vast amounts of our tax money into the
financial markets, which might briefly delay the worst financial collapse
since 1931 and a nasty recession to follow.

“The only real beneficiaries of this rescue will be those working in the
financial markets. They have spent the past decade stuffing our savings
up their noses while telling us they were invested. Now their friends in
government have come up with a scheme to use our tax money to pay next
year’s bonuses.

“The Libertarian Alliance denounces this proposed rescue and predicts bad
times for years to come.”