Guv’mint is omniscient and omnipotent.

Banks are holding back funds from struggling companies even as they rack up jumps in their own profits, says The Times. (1)

The guns of United Kingdom guv’mint know how to deal with that, without it even being necessary to inquire as to the causes of this “holding back of funds”.

Pressure therefore mounts on Bank of England to ‘print more money’, says The Times (1, again)

Printing money, that’s how the UK guv’mint deals with the nasty banks which are holding back funds.

In the United Arab Emirates, the Central Bank wants to force its subjects, the UAE commercial banks, to charge lower interest rates. (2) (3)

Forcing them to lower interest rates, that’s how the UAE Central Bank deals with the nasty commercial banks which are changing interest rates which are too high.

Whereas the UK government complains that the banks do not lend any money, the UAE charges that the interest rates at which they lend are not low enough.

Will lowering interest rates in the UAE lead to more loans and thus more money creation by the UAE commercial banks? We’ll see.

As I quoted Leuschel and Vogt so many times on this blog
(while still eagerly awaiting the their new book “Die Inflationsfalle: Retten Sie Ihr Vermögen!”, 2 September 2009):
Banks used to have the right to issue receipts for the gold they held in reserve in warehouse.
This right was taken away from them by the institution of central banks. (4)

The guns of the UK and UAE governments know indeed better. They are omniscient and omnipotent. The nasty commercial banks are not.

Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/

NOTES

(1)
From The Times August 5, 2009
Pressure mounts on Bank of England to ‘print more money’
Gary Duncan, Economics
http://business.timesonline.co.uk/tol/business/economics/article6739361.ece
SNIP
Pressure mounted on the Bank of England on Tuesday to expand its radical scheme to jump-start growth by “printing money” after its own figures revealed that a continued lending drought is blighting businesses and jeopardising recovery prospects.
Hopes that the ground-breaking quantitative easing (QE) scheme would boost credit flows to businesses and consumers were dealt another blow by the stark figures, which came as the Bank’s Monetary Policy Committee (MPC) meets today and tomorrow to consider its next move.
Banks’ outstanding lending to businesses outside the financial industries plunged by a record £14.7 billion in the second quarter from the previous three months, emphasising the danger that constricted credit could stifle any economic upturn.
The news came after Alistair Darling met banking chiefs last week to demand that they boost lending flows, and is bound to inflame anger that banks are holding back funds from struggling companies even as they rack up jumps in their own profits.

(2)
UAE central bank discussing dirham benchmark rate
by Martin Morris
on Wednesday, 05 August 2009
http://www.arabianbusiness.com/563858-uae-central-bank-mulls-dirham-benchmark-rate
SNIP
The UAE central bank on Tuesday met with lenders to discuss the creation of an ”official” Emirates interbank offered rate as it seeks greater influence over interest rates that haven’t tracked cuts in the repurchase rate.

(3)
Central bank wants official interbank lending rate
Sarmad Khan
Last Updated: August 04. 2009 7:44PM UAE / August 4. 2009 3:44PM GMT
http://www.thenational.ae/apps/pbcs.dll/article?AID=/20090804/BUSINESS/708049926/1005
SNIP
The Central Bank plans to create an official interbank lending rate that could encourage banks to provide cheaper loans and help stimulate the economy.

(4)
Roland Leuschel and Claus Vogt, “Das Greenspan Dossier, Wie die US-Notenbank das Weltwährungssystem gefährdet. Oder: Inflation um jeden Preis”, www.finanzbuchverlag.de, 2006, 3rd ed., p. 299