Sunday, December 07, 2008

Mandelson to wring blood from a stone!

Apparently Lord Peter Mandelson will be meeting with bank executives on Monday to try and get the banks to lend.

Well, this will be like wringing blood from a stone. They have no money to lend. Our banks have lent £700 billion more than they have on deposit since 2001, and that money has been borrowed short. As I pointed out in my articles on Bank of England interest rate cuts, banks are trying to buy money from consumers at as much as 6%.

Clearly the government are in cloud cuckoo land and may even let the presses roll.

Andrew Rawnsley has this in the Observer.

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