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By John Kaponi

The government has apparently saved the banking system with this massive financial injection of cash into the system, but why do I still feel we are not really fixing the problem? I don't feel it is the role of the government to be baling out banks that have failed to appreciate how reckless investing in residential property actually was.

What lies at the heart of the problem is the ignorance of people not educated economists or hedge fund managers but your average John Smith who lives in a semi in Basildon on a salary of £20k a year but insists on holidaying once a year blowing 2 months salary, shopping every week having credit cards, a car on hp a house he cannot afford to run. This is after all the source of the problem.

Unless the government starts to address the issue of educating individuals on how to save and spend what they can afford, what will happen; not now, but when credit conditions improve will be a dash for cash remortgaging of properties, that will inflate house prices again and we are back to square one.

This is where the government should have intervened.

Why have the banks not told us about that massive black hole we still have no idea about, unsecured debts like credit cards and personal loans.

How much of this is still outstanding and what are bad debts? It is estimated the UK alone has conservatively around £80 billion of unsecured debts some analysts have said this is more like £200 billion or on average £25,000 for around 8 million people in the UK.

The banks will survive this crisis but what happens to those who have already lost their homes? Councils in London are struggling to house people because of immigration to the city and the lack of social housing stock. I don't feel any better now even after 0.5% cuts in interest rates or this new package. We must all cut back our spending and start budgeting.

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Date Added: Thursday 09 October, 2008

The government should remember what happened on Black Wednesday 16 September 1992. George Soros played the amateurs like a fiddle. Where there is money pouring in at one end you can be sure it will be pouring from the other. Who is it that has got the endless amounts of money to lend to our banks - our supposed cream of financial institutions in the supposed financial centre of the would. Who is it that has such vast sums but will only lend with assurance of Government? One can assume that they have the money to lend but will not do so without such assurances - why? These mystery lenders have the money and be in the business of lending it for a profit so why are they so intently reluctant to work with our banking institutions directly but resolutely happy to do so with the backing and assurance of government; or more to the point with the assurance of all the UK citizens, liable for the debt, jointly and severally, like it or not. If lending this money was a sure bet, of any sort, these mystery lenders surley would work directly with the banks, indeed they could take control of just about every banking business in the UK for no more than providing their working capital. Is it that they think this would be a bad idea? Do they think that opportunity's chance of success is so dangerous they would rather keep away for the risk except if they have the assurance of the government underwriting the debt, only then it is OK. But in lending to government and letting the people take the risk our mystery lenders would miss-out on the prize, they then would not gain ownership of whichever bank they desired to control - all they will get is a little bit of interest and a half a percent less of it at that from today. These people who have the funds to lend to bail out the Bank of England to bail out the banking sector (that is just about our only remaining 'industry' today) would surly find a drop of a half a percent and not gaining control of the banks a less attractive opportunity than if they took control of the situation on their own. If the risks are so darn risky they will not step-up to the plate in isolation, why are they so willing and ready to do so with the underwriting assurance of every taxpayer and property owner in the UK? If the government's bank funding rescue project fails to calm the tempest, as it would appear these mystery lenders must by default consider is the greater probability, what then? When do they call their debt in and how do they do it? The figure is so vast my calculator does not allow enough zeros to hold it but roughly the forced indebtedness of every man, woman and child in the UK will be in the order of £10,000 already and that is before any more money is thrown at the wall. Maybe then when we all owe these mystery lenders tens of thousands and yet still our banks collapse taking every penny we have saved, invested, earnt, inherent, insured for and so on collapsed with them, like reluctant Lloyd's underwriting names, we will be forced through the power of state taxation to pay-up the debt we will all then legaly owe. That prospect is a greater prize for our mystery lenders to plot to absorb, to pass-up on the 'easy quarry' of ownership of the pick and choice of any or all of the great banks they care to name. Your home is not 'your' castle when you have an unlimited financial liability which can be demanded that you yield to with all the authority of a government and its power of taxation.

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