SmallModCons“Only Bono Can Save Us Now”

Q1, 2011.

FREE

How Project Merlin should have gone down...

Obviously, what should have

happened here is, instead of giving

taxpayers’ money to the banks, the

government should have given it

directly back to us, the people, so

we could have spent it and got the

economy moving again ourselves.

Governments don’t like giving money

to the public though. But they sure

like to take it from us. It often seems

like they just see people as walking

cash machines to fund their own

activity (or pay their debts). Think

about that.

Ok, back to the current economy.

After the failure of giving our

money to the banks, the all new

coalition government had a load

of new money printed (they call

it “quantative easing”) in order to

flood the streets with cash and get

things moving again. But since the

government doesn’t like to give cash

to its electorate, they passed that

responsiblity (ie. the money) to the

banks again. And the banks didn’t

lend that money out either.

‘Call me Dave’ Cameron keeps

banging on about how “we’re all

in this together”. Given that we’re

experiencing massive cuts in public

spending and services (£83bn worth

- expect a decline in the quality

or existence of jobs, healthcare,

schooling, policing, transport

networks, libraries, postal service,

art galleries, libraries etc.) while

the banks are sitting on taxpayers

money, it doesn’t seem like we’re

all in it together one bit. It seems

like the public is paying for the

incompetence and greed of the elite.

Think about it.

There have been riots all over

Europe in the last few months;

France, Spain, Greece, Iceland,

Tunisia, Eygypt etc. British students

also had a good old kick off a couple

of months back; demonstrating and

riot-lite-ing across the country. All

inspired by governments scooping up

public cash and using it to prop up

their regimes.

Sorry to weigh in with such a heavy first article, but this is important, so tuck in and read on...

In case you didn’t already know, the economy is fucked. Mainly due to greedy

bankers and weak government. When the credit crunch hit a couple of years ago

and banks were skint, the Labour government gave them a load of taxpayers’

money (£131bn according to the National Audit Office) to keep them going. The

idea was that the banks would lend the money to people and businesses and

everything would start ticking over nicely. Except the banks didn’t lend out the

money; they just sat on the cash. Or invested it to make money for themselves

while the rest of us bumbled along or fell by the wayside (RIP Woolworths), so

the economy never got moving again.

When the spending cuts start taking

effect, don’t be surprised if the newly

mass unemployed start uprising too.

I mean, what else are they gonna

have to do if there’s no jobs to keep

them busy? It’s almost inevitable.

It’s not going to get all Tahrir

Square though. Not yet. Just a lot of

noise, a few broken windows, some

bad policing and hysterical media

headlines. That’s the English way and

the government know it. They’ll just

hunker down, tighten their resolve

and carry on.

Which kind of brings me to the

intended point of this article as

implied in the title. The latest

government attempt to flex some

muscle on the banks was the

hilariously title ‘Project Merlin’.

Sounds like some military black-op.

It’s a pretty appropriate title though

- almost like an admission that

the idea of taming the banks is as

impossible as the magic of alchemy;

bound to fail.

And failed it has. They’ve got the

banks to agree to lend out £11bn

more than they did last year. sounds

like a lot until you realise this; the

banks are lending out £190bn this

year instead of £179bn. Do those

figures really seem so different? Not

really - it’s a 6% rise, only slightly

higher than inflation , so not much of

an actual increase at all. And it’s not

even a net target (ie. the banks must

lend out £190bn more than the take

in as payments), it’s a gross target

(ie. they have to lend out £190bn but

there’s nothing to stop them claiming

back the money through repayments

on other accounts and sitting on

that). So it’s pretty meaningless.

They also increased a levy on the

banks by £800 million; such a small

amount it accounts for 1 week’s

profits from the main players. To cut

a long story short, it’s a deal full of

posturing with no real penalty to the

banks and no real gains for anyone.

You would think that a democratically

elected government would have the

authority to tell a private bank what

the score is; banks don’t make laws,

governments do. And that is true; so

why doesn’t the government pull the

heavy punches and rein in the banks’

excesses?

Well, it seems the banks persuade

them to go easy with pretty much

one argument: Punish us too much

and we’ll leave the country to set up

abroad where we can earn what we

want. That’s basically it, or certainly

all the media seem to report as the

bankers’ argument.

Now, how likely is that to happen?

How easy is it to just uproot a

largescale financial oragnisation and

relocate it to a foreign shore? Not

that easy, I’d say. How expensive

would it be to do so? Fairly, I’d say.

And how good are English people at

adapting to a foreign environment?

On the whole; not very, I’d say.

Plenty of English people get culture

shock hopping over the channel to

France, let alone heading off to the

faraway business lands of Hong

Kong, Tokyo and the like.

“It is dangerous to be right in matters on which the established authorities are wrong.” - Voltaire

So, are those big earners really

gonna give up their home comforts

for foreign lands? Who knows, but

I doubt many of them are actualy

eager to. Sure, a few big-earners

would follow the money but most

emplyees would stay put.

Think about it, even if a bank were

to make moves to ship out east, the

majority of staff wouldn’t follow;

they have a families, a homelife,

commitments and ties. So these same

UK staff that are threatening to leave

and take the banks profits with them

probably wouldn’t actually leave town

and would be worse off if the bank

did move abroad. So, if they followed

through on their own argument, they

would lose out. That makes me think

this isn’t likely to happen.

Another crack in the Merlin debate

is the second line of government

defence, which is that London is

a super-important global financial

centre and thus the country can’t

afford to let the banks leave. Sounds

like it makes sense but it isn’t very

‘robust’, to use a term favoured by

government. That argument can be

turned on its head; if London is such

an important financial location (and

it is - the world bullion markets are

based there), why would a bank take

the risk of removing it’s presence

from it? Another competitor could

step in and steal some market

share. It would lose access to local

networks and contacts, missing

out on potnentially lucrative deals,

particularly with the bullion trade.

For this to happen, all banks,

competing against one another

for market share, would have to

agree to all move their operations

simultaneously in order to pull this

threat off. Are they likely to work

in such a co-ordinated matter, or

would it be a big game of poker

with everyone saying they’re

going to up sticks but are secretly

planning to lay down a full house

and sweep up once every other

player has left town? What do you

reckon? No, I think the banks are

just calling the government’s bluff

and would stay put.

Another question I’ve never been

given a good answer to is this; if

the banks make massive losses and

have to be bailed out, why are they

so valuable to our economy anyway?

If they’re making losses, they’re not

paying taxes. That’s bad enough, so

why give them tax payers’ money

(£1 trillion in total) then just let them

carry on as before, bar a few token

gestures? It makes no sense. This

government, particularly mainplayers

Cameron and Osbourne, are a bunch

of wet behind the ears idealists who

don’t seem to get the reality of how

things work. Even Bank of England

Governor, Mervyn King, was caught

calling them a pair of inexperienced

rookies with no track record, ideas,

plan or understanding (he later

apologised to make future meetings

less awkward for them all).

So, here’s my slant on how Project

Merlin should have gone down.

Pessimist: “Things are so bad, they cannot possibly get worse…”Optimist: “Sure, they can!”

The coalition should have used their

elected authority to call the bankers’

bluff. Put pressure on them to sling

their hook asap if they didn’t agree

to terms that realistically reflect the

situation and get them to hand some

money back to the people. Bonuses

should be performance related and

proportional. No bailed out bank

should be paying bonuses to its

CEOs. Much tighter regulation should

have been brought in (the banks still

pretty much regulate themselves).

Several people should probably

be fired. Tell the banks we want

their loss-making, taxfund-sucking

enterprises off our turf so we can

use their buildings to house profitable

businesses which generate income

for the national economy.

If we could go back in time, the

banks should have never been bailed

out. Let the free market play out; the

bad ones go under, the good ones

stay afloat. That would have woken

the bankers up. People who’s money

disappeared along with a bank would

be able to recover up to £50k of

their savings per institution they hold

accounts with under the guarantee

of the FSCS scheme. That would

have been cheaper, fairer and more

effective than full-on bailouts. The

surplus of cash saved by not bailing

out banks en masse could have been

used to kick-start new manufacturing

business with a view to exporting

goods. This would help address

the trade deficit to some degree

and provide the foundations for a

sustainable economy.

And that’s it. Pretty simple, but if

you understand the idea of a trade

deficit and what that means for an

economy long term, ditto quantative

easing and rising inflation and how

they make your money worth less so

things get more expensive over time,

then you’ll get an idea of how this

situation has been handled very badly

by a goverment with only short-term

fixes (keeping everything seemingly

ok on the surface) and no long term

plan for how to get out of this mess.

They have the business acumen of

a particularly dim fly who has flown

into a wineglass, gotten hideously

drunk and been dead for a good half

hour or so. And we’re the ones that

have to drink the tainted medicine

while the bankers crack open another

bottle of champers. But we’re all in it

together, remember.

I hope that woke you up.

For the record, the author has no

preference for any political party;

the branded definitions between

them are hollow; they are all part

of the same system with the same

agenda; ie. protecting their power

at everyone else’s cost. don’t fall

for the false left-right argument;

you don’t have to be a Socialist or

a Liberal or a Conservative; it’s not

black and white. Don’t be conned

into following one camp or the other;

work out who’s talking shit and who’s

taking sense and draw your own

conclusions.

Peace out.

“I believe that banking institutions are more dangerous to our liberties than standing armies.” - Thomas Jefferson

Narcotics Report

Between 2002-2009, street purity of cocaine dropped from 64% to 22%. Import purity fell from 72% to 64% over the same period, except for a dip to 57% pu-rity at the start of 2009. Basically, it went from being cut by about 10% to about 50% over a 3 year period and has stayed at that purity level ever since. Who knows what the other 78% is. People who sniff that shit might want to think about that.

US UK China Russia

Military Spending (2007)

Country Spend World Share Per Capita World Ranking

USA $546bn 45% $1.8k 1st

UK $60bn 5% $1k 2nd

China $58bn 5% $50 3rd

Russia $35bn 3% $250 7th

Amazing to see that USA spends 10x anybody else and the big Eastern states spend less than us!

US UK China Russia

UK Trade Deficit (ie. imports vs. exports)

Imports: £92bn Exports: £66.2bn

Difference: £25.8bn net imports

What does it mean to import more than we export? It means we buy more stuff from foreign countries than they buy from us. This means, overall, we give more money to foreign countries than they give to us. As you can see from the piechart, this difference in cash in and cash out (called the trade defi-cit) amounts to us being £25.8bn worse off for the final quarter of 2010.

That’s a pretty typical figure, meaning our economy shrinks by about £100bn a year because we don’t have enough stuff to sell to other countries. What would be better for the coun-try is to have a positive trade deficit - ie. sell more than we buy and bring more money into the economy.

So, because we import a lot of stuff and don’t have enough stuff to export, we are in a continual process of losing money from the national economy - ie. the country is getting poorer. Notice how the piechart looks like pacman? That’s the trade deficit in action; our reliance on foreign goods is eating up the profits of our exports, plus another £100bn a year.

Source: Office for National

Statistics UK Trade in Goods report Q3 2010

Why buying British stuff is a good idea

So, how do we go about turning the tide? Well, the immediate thing we can all do is buy things manufactured by British companies; food, clothing, furniture, cars etc. This keeps the money in the economy and jobs in the country.

I don’t say this as some kind of nationalist or xenophobic sentiment; I’m down with all people, wherever they’re from. I say this purely as a matter of economical sense.

Because what happens when an economy dives? The govern-ment has to borrow more money. And how does the government pay back its debts? Taxes. Taxes exist as a means for the government to guarantee it has the ready source of cash it needs to pay the interest on its debts.

If an economy is tanking, it will be shedding jobs, so there will be less corporate tax for the government to reply on. This means tax rises focus on people (such as VAT and income tax increases) and things get more expensive for everybody.

The other thing governments do to make up the shortfall is print more money. Sounds good, but doing this devalues the currency relative to the global economy (the more there is of something, the less it’s worth). As we import a lot of stuff, this solution also means things get more expensive for us.

So buying British is a way to provide a more sustainable economy and cheaper cost of UK living in the long run.

The other thing, which we can’t do but the government can, is to invest in new manufacturing industries so we can in-crease our exports.

Lots of British brands are now owned by foreign corporations (Asda by Walmart and Cadburys by Kraft for example), so if you want to gen up on which brands you should buy to keep the country afloat, try these sites:

www.buybritish.comwww.choosebritish.co.uk

When debt is created, new money is created. If you take out a five grand loan from the bank, they don’t reduce their reserves by the same amount, they add your five grand to their accounts as if it is new money. Made out of thin air, just like that, existing as nothing other than numbers on a computer screen.

Now it gets interesting - if you were to take that loan out of your account all in one go and pay it into another account you may have with a different bank, that bank will register a 5k credit in its coffers. So, overall, you borrowing five grand from one bank has magically cre-ated double that in terms of new money in the banking system (£5k from the first bank not reducing its reserves and £5k from the second bank increasing its holdings when you transferred the cash). This is what is known as ‘expan-sion of the money supply’.

It’s a weird concept, but as long as everyone doesn’t want to withdraw all their savings as cash at the same time , it doesn’t make much difference. Thing is, there’s a twist; if money is created by issuing debt, then money and debt are essentially the same thing. But debt comes with interest; an extra debt at-tached to it. So, a question you might want to consider if you haven’t already is ‘where does the extra cash come from to pay for interest?’.

The answer is that it doesn’t exist. There isn’t enough money in the system to pay off interest on debts. This means that people defaulting on payments is built into the system. Another way of phrasing that is to say that poverty is deliberately designed into the system. Essentially, the banking operation is just a giant payramid scheme. Bad, right?

So, what can you do? don’t live on credit. Live within your means and pay off debts as quickly as possible. Don’t just pay the minimum on credit cards; though it may dent your cashflow, pay them off sooner rather than later. That way, you’ll get out of debt quicker, pay less interest, and have your own money to spend rather than interest-laden money borrowed off your bank.

I know it sounds boring, but loans and their associated interest are just ways of extorting more money from people and putting it in the hands of the already rich. They rely on people not really understanding how interest works, and it works by bleeding you dry; death by a thousand paper cuts. The slower you pay off debts, the more it costs you and the richer the banks become.

Hopefully this has clued you up a little bit and you now know a bit more about how to stop your money ending up in the bankers pockets.

“If you owe the bank £100, it’s your problem. If you owe them £100 million, it’s the bank’s problem.”A. Wiseman

“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.”

Interest-ing

A. Wiseman

The Sandwich Monologue

“I’ll kill you.Who wants a sandwich?I haven’t eaten anythingand who wants some?i scream, i haven’t,it’s just a rumour.i’ll kill anyone who says‘get your chops round that.’

there’s no way out,go make a sandwich.i wish i had somelegal capacityto orderyoutomake a sandwich.

i want to eat some mescalin.it would go down nicely.it would be niceto be gripped hold ofand taken awayfor maybe two days.let’s drink some whiskey.what are we going to do then?’’

SAT SUN MON TUE WED THUR FRI

3

2

1

0

Ham

Hotdog

Beef

FishFinger

Bacon

BLT

Bacon & Egg

Chicken

& Bacon

One author tracks his sandwich consumption for 2 weeks.

week 1

week 2

Total no. of sandwiches: 19Sandwich / non-sandwich days ratio: 11:3 (3.7:1)Highest daily intake: 3 (3 times)Average sandwiches per day: 1.36Home-made / store-made ratio: 12:7 (1.7:1)

Fillings:

Number of different fillings: 8Most frequent filling: Beef (6 times)Most expensive: £2.99 (store bought Chicken & Bacon)Cheapest: 40p (homemade Hotdog)Total spend: £25.86Average sandwich price: £1.36Average spend per day: £1.84

Sandwich Analysis

Poetry Corner:

An Observation:I’ve recently noticed that the once ignored

and abundant discount section at my local

supermarket is now the busiest area. Out

of nowhere, people are jostling to get their

hands on reduced meat for the freezer.

I’ve been going there nearly ten years and

have never seen anything like it. A sign that

people are feeling the pinch due to rising

inflation and the devaluing of our currency?

And the cuts haven’t even really started

taking effect yet. What next? I’m awaiting

UK Food Crisis headlines in the Daily Mail.

UK residents main fears of global destruction

Fight the system, not each other;united we win, divided we fall.

Ok, that’s yr lot; a mini economics

primer and some cartoons. We here at

SmallModCons hope you enjoyed it.

If you want to start standing up to

the greedy buggers taking us for a

ride, check out what UK Uncut are

doing at - there’s loads of easy fun

ways to make a stance with some

likeminded decent people in your

home town. They’ve already drawn

attention to tax-dodgers like Voda-

fone (another bum deal that shows

we’re not really all in this together)

and now they’re aiming to drawn at-

tention to the banks who are playing

jolly with our money.

www.ukuncut.org.uk

the mayans

bankers

thechinese

asteroid

/comet

globalwarmingmuslim

extremists

christian

extrem

ists

buddhist extremists

aetheists

chooseyourown re

versal of magnetic poles

CERN

zombies

chicken

s

& other

avians

no fear beyond one’s

own paltry existence in physical form

Source:overheard Nelson’s column inches

Not affiliated with UK UncutJust down with the people.