I had lunch today with Toby, an old friend who works for one of the investment banks in the City and who is well connected with the Treasury. I wanted to pick his brain about Alistair Darling's newly announced prescription for the ailing British economy ie. Borrow a fortune and hope that everything will be all right.
'The main thing,' he told me, 'is to protect the irresponsible lending industry which has made Great Britain what it is today. The Government must take the lead before it is too late! I mean, how will anyone afford a new BMW if they can't borrow the money against the value of their home? They can't all have an accident at work and sue their employer!'
I asked him just how much he thought the Government would end up borrowing. He wasn't sure but he thought it was roughly equal to around three quarters of the entire economic output of the planet. I suggested that this sounded like rather a lot. 'That's nothing', he said, 'the American will soon owe about four times the entire economic output of the solar system. Apparently they are having to invent a new number to express it.'
There was just one thing I didn't understand, however. Who are we actually borrowing all this money from? Toby wasn't certain. 'The Chinese, I think. Probably.' But doesn't this put the Chinese in rather a powerful position? 'Only if we pay it back' he said with a smile.
'The main thing,' he told me, 'is to protect the irresponsible lending industry which has made Great Britain what it is today. The Government must take the lead before it is too late! I mean, how will anyone afford a new BMW if they can't borrow the money against the value of their home? They can't all have an accident at work and sue their employer!'
I asked him just how much he thought the Government would end up borrowing. He wasn't sure but he thought it was roughly equal to around three quarters of the entire economic output of the planet. I suggested that this sounded like rather a lot. 'That's nothing', he said, 'the American will soon owe about four times the entire economic output of the solar system. Apparently they are having to invent a new number to express it.'
There was just one thing I didn't understand, however. Who are we actually borrowing all this money from? Toby wasn't certain. 'The Chinese, I think. Probably.' But doesn't this put the Chinese in rather a powerful position? 'Only if we pay it back' he said with a smile.
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