God Bless America
Have you noticed how America always has to be centre front on the world stage? The Iraq war did the job nicely for quite a while and just when even diehard Americans started tiring of that, they conjured up a financial crisis that started in their banking system and then reverberated throughout their entire economy before engulfing the rest of the world.
Things got seriously out of hand as we are all now painfully aware and America turned to its economic policy advisers to come up with a solution. Unfortunately what they came up with left a lot to be desired.
Their solution was to grab $US700 billion of tax payers' money and buy bad bank loans. This would have been grossly unfair to taxpayers who were basically being asked to pay megabucks for a load of worthless junk with no compensating upside.
Fortunately the European Union and Britain were alert to this inequity and came up with a much more reasonable, if blindingly obvious solution. If tax payers' money had to be used to bail banks out it should be used to purchase equity in the bank. That way, long-suffering taxpayers would get a commensurate share of the good stuff as well.
Eventually, the wisdom of this proposal dawned on the Americans and they announced that they would follow the European and British lead. And what happened when they finally got it right? A few billion (or was it trillion?) was promptly wiped off the American share markets! So it's not just the banks and economic policy advisors in America who seem to have lost the plot.
And the point is? Well, the Americans led us into this mess but, based on their performance to date, we would be foolish to expect them to lead us out.
This information is not a recommendation nor a statement of opinion. You should consult an independent financial adviser before making any decisions with respect to your shares in relation to the information that is presented in this article.
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