The trouble is, rich people, even though they almost invariably have more resources than they require, still want more, and demand payment for access to their surplus capital in the form of interest. This generally puts the skids under poor people borrowing too much.

Over the last ten years however, we have seen historically low rates of interest which has meant that there has been an explosion in lending and borrowing – the result of which has been that people who in the past would have had no chance of having access to capital via borrowing, suddenly found that they could borrow virtually unlimited amounts.

Inevitably, as the borrowing binge spread further and further down the food chain, it ultimately hit the buffers and the least creditworthy began to default. The rest, as they say, is history.

If we could have frozen time at the point where the credit crisis started to unfold, what picture would we have seen?  We would have seen millions of people across the planet with jobs and a standard of living that their forbears could have only dreamed of. The classic example would have to be China, but all over the world ordinary people were able to eat well, sleep well, take holidays, enjoy good health etc etc.

This rosy picture existed momentarily, but then it all fell apart, when the rich people and their agents the bankers suddenly started to fret that they would not get their money back. The fact that they did not necessarily need it back – it was doing more good spread across the globe in the form of loans was irrelevant to them. The thought that they might not get their money back and that they could therefore become less rich people than they thought they were previously, caused worldwide panic in the bourses and chancelleries of the world.

Once the rich people discovered that they most definitely would not be getting their money back from the people to whom they had leant it, they set to work to ensure they were repaid by the remainder of humanity – hence the great bail outs.
 
So now we are all vicariously borrowed up to the hilt courtesy of our governments. The resources have been returned to the rich people as you would expect, and the little Shangri La of near universal prosperity that existed momentarily across the planet is gone.
 
 

I was quoting the article to which I posted a link. I put HTML tags for quotes, but evidently this system doesn’t like them. Anyway, read the article as it will answer your questions.

<blockquote>

Many people believe that the Bank of England is a privately owned corporation. Many people believe that it’s owned by the Rothchilds. Neither of these beliefs is true. The truth is much worse.
The story of the Bank of England is the story of the British Empire. The British Empire was never a political empire. It was always a monetary financial empire, as much a parasite on the people of Great Britain as the rest of the world. The idea of the Victorian’s British Empire bringing civilisation to the darkest parts of the world is one that needs real reconsideration by many Britons.
The Bank of England was originally set up as a core part of the British Empire – making huge profits from loans to the British East India Company and other tendrils of the Great British parasite. The mainstays of the trading activities of these companies were drugs, warfare and the looting of raw materials from poverty stricken nations…</blockquote>

http://opensource.typepad.com/opensourcelondon/2008/11/location-location-disaster-.html

http://www.youtube.com/watch?v=9lp0IWv8QZY

PS:  Max, were you in a poetic mood when you wrote this?

“From her loins springs the sum and in-substance of fiat fantasies fanning the flames of a monetary foolhardiness “

People just don’t see monetary policy as the key to everything. its too big to comprehend for many- just can’t figure it it. The memory of our own revolution in 1916 is fading fast where as that freedom spirit is still alive in America. 

Maybe if the banksters push us a little more there will be a ‘push back’.