Joe Soap is the mortgaged owner of a popular London pub. For some time, Joe has been feeling a bit uneasy about the dwindling numbers
of drinkers. However, it was simply that Joe's customers are now
mostly on zero hours contracts. For his regular clientèle money is increasingly harder to
come by. So the clientèle can no longer afford to patronise the pub every day.
Joe resolves try and sort the business problem. He comes up with a revolutionary new business plan. One that allows Joe's customers to drink
now and pay later. So he keeps track of the drinks consumed in a
ledger. Word gets around about Joe's "drink now, pay later" business strategy and, as a result, increasing numbers of customers
flood into the pub. Soon Joe has the largest sales by volume, for any pub
in the whole of London.
This is how business entrepreneurs have been
working since 1960.
By providing his customers with credit and so the freedom from
immediate payment. Joe gets no resistance from the customers when, at periodic intervals, he substantially increases the prices for wine and
beer. Consequently, due to the popularity, Joe's sales volume increases massively. A young
and dynamic banker, reads in the business press about Joe's success and recognises that the
customer debt actually constitute valuable future asset. He calls Joe
into the bank and convinces Joe to increase his borrowing limit, allowing Joe to open more pubs. The
banker sees no reason for any undue concern, since he has the debts
of the zero hour customers as collateral.
Joe's success naturally comes
to the attention of one of the corporate traders at the banks headquarters.
Soon the trader and joe's banker, figure a way to make a few large commissions. Made through the
simple expediency of transforming the customer, drink now and pay
later loans into Drinking-Bonds, Alki-Bonds and Puke-Bonds. Such is
the success of Joe's business that the drink now and pay later
securities are subsequently bundled and traded on the stock markets. The investors
did not really understand that the securities being sold to them as
triple 'A' secured bonds. Were in reality, Double 'A' bonds as the debts of mostly
unemployed alcoholics.
This is how the business brokerage sector has been
working since 1980.
The news of Joe's success travelled far and wide.
As a result the bond prices continued to steadily climb. Before long,
the drink now and pay later securities, were taken up by other pubs. To become the hottest-selling
items for the leading brokerage houses.
Even though the bond
prices were still climbing, a risk manager at the bank,
became a touch jittery. He was suspicious about the rocketing success of the
business. He decides that the time has come, to demand part payment on
some of the debts incurred by the drinkers at Joe's bar. Joe was now
required to start and call in payment from his now indebted, inebriated,
unemployed, alcoholic patrons. However, being unemployed alcoholics, unsurprisingly
they cannot pay back their drinking debts. Since, Joe cannot fulfil
his loan obligations he is now forced by the bank into bankruptcy. The pub chain closes
and the eleven employees all lose their jobs.
Overnight, the bank tries unsuccessfully to sell
on at a marked down price the loans. The market in Drinking-Bonds, Alki-Bonds and Puke-Bonds
catches a cold. The bonds drop in price like a stone and are instantly converted into junk
bonds. The collapsed bond asset value almost destroys the banks
liquidity and prevents it from issuing new loans to business. As a
result, freezing credit and economic activity in the business
community. The bank is now even struggling to pay the staff performance bonuses.
This is how the business banking sector has been
working since 1980.
The suppliers of Joe's bar had based on his success and turn over, granted him
generous payment extensions. Other businesses had meanwhile invested their
firms' pension funds in the various Drinking-Bonds, Alki-Bonds and
Puke-Bonds securities. They all find they are now faced with having
to write off Joe's bad debt and with losing all of the presumed high
value of the bonds.
As a result, Joe's wine supplier is also
forced into bankruptcy. Closing the doors on a family business that
had endured for three generations. The liquidators come in and make their huge fees but there is little else for their creditors. Joe's beer supplier is
financially crippled and taken over by a hostile competitor, who immediately
strips the assets and closes the brewery, sacking 150 workers.
This is how the suppliers to business has been
working since 1920.
Fortunately though, for the bank, the brokerage houses
and their respective executives. The banks are saved and bailed out by a
multi-billion pound, no-strings attached, cash infusion from their
cronies in Government. Quantitative easing is the new banking watch
word. The performance bonuses continue to grow.
The funds required for this bailout are obtained
by the government imposing an austerity budget. As well as new taxes levied on
employed, middle-class, non-drinkers who have never been in any of Joe's
bars. At the same time, the high earner bank and brokerage executives are granted a
cut on their taxes. Then as the banks recover, the shares held in
our name by the Government are sold off cheaply to Hedgefunds and other speculators. Proving there is money to be made in a crisis and that austerity is a sham.
Now, you should understand how Gideon Oliver Osborne-omics has been working since 2010.
