The News In Shorts

How the news would look if everyone stopped waffling and told the truth.

Thursday, 15 March 2012

Osborne Tries His Hand At A Financial Rip-Off.

If the growth in unemployment, or "acceptable losses" as the Tories regard it, the parlous state of the country's economy and the repeated threats to reduce its credit rating are not enough to demonstrate that George Osborne is an idiot of staggering proportion, then his latest idea shows beyond all doubt that he most definitely is. Having carefully explained to us all why his catalogue of economic disaster means that we need more and not less austerity, he is now suggesting the launch of a 100 year bond. His reasoning, if that is the right word, is that he can sell a long-term bond with a locked-in low rate of return that will give the government lots and lots of saver's money while the capital won't have to be paid back for three generations. There are several problems with such a scheme unfortunately. Even if savers can be persuaded to invest their money for a low rate of return, the markets will regard such a bond as worthless and simply won't be willing to trade in it. The major problem, however, is that such a bond is nothing less than a cynical attempt to rip off the people foolish enough to buy them. It is unlikely that the yearly return will keep pace with inflation and, in one hundred years when the bonds mature, that inflation will have eroded their value to a point where they won't be worth the effort of cashing them in. In other words George Osborne, taking a leaf out of the banking industry's book, is deliberately attempting to sell a junk bond that he knows is not worth the paper its written on. Not only an idiot then, he's also a crook.

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