Thursday, January 19, 2012
When the history of current events comes to be written, this has to be deemed the point when the financial establishment lost all touch with reality.
As for the cash strapped UK having to borrow £19 billion - nearly eight week's worth of borrowing, paying market rates of interest, and then lending that amount of money to the IMF at a discounted interest rate, all to save the "colleagues'" blushes, this is beyond surreal.
The Grauniad reminds us that the Commons has already given the Treasury leeway to draw down an extra £10bn to give the IMF, but anything further would require a fresh vote in the Commons – and be likely to prompt a backbench Tory rebellion.
That would be an interesting development, although the Tory pussycats tend to talk the talk and then go AWOL when it comes to walking the walk. The issue will come to a head in the Spring, though, about the same time that Greece faces its nemesis, so we are in for an interesting time.
However, there may be a get-out clause, with the preposterous Osborne demanding (unspecified) EU "reform" as a condition of releasing the money. As we know that the eurozone is neither capable of reform, nor willing to dance to the Osborne tune, he could be on a safe bet.
Either way, though, this is funny money – it don't mean nuffink.