This manic idea that going for growth will ‘sort the problem’ has to be ditched once and for all. All such a policy will do is shift the cost onto the next generation/s. Why should our kids pay for the reckless activities of incompetant politicians and bankers over the past 50 years?

Time to start over and do it properly next time.     

I think one of the larger issues is how we get from crisis measures to longer-term growth and sustainability initiatives, because all this austerity and firewalls etc is just meant to keep the whole thing patched up enough to stop it from completely falling apart, and with 30-year bonds, a little bit of long term thinking may be well placed! 

OK, so the argument may be simplistic considering the pressure banks are under to hold domestic governmment debt but the eurozone is one of the few markets where they have a genuine choice about which liquid bonds they populate their balance sheet with.

Furthermore:
The bond swap now places a great burden from an “ambitious” deal on to the public sector.
The public sector is wearing a reduction in interest on bilateral loans.
Dramatic impact to European banks may ultimately fall on the public sector so taxpayers aren’t that relaxed about that element either!

Losses have been suffered by both sectors. It’s not perfect but I don’t feel the private sector has got a bum deal here.

But if, on the other hand, a reduction in real wages occurs in a recession, then this may prolong the downturn due to the negative influence upon consumption.

Interesting trade-off between the goal of a competitive labour market in the long-term and the goal of supporting consumption in the short-term.

Your viewpoint nicely illustrates why Alex Salmond’s call for independence is beginning to appeal to a wider audience in Scotland. You, from what I would guess is a South of the border perspective look at the chart and see ” a supine” Scottish market in other words less opportunity for using a house as a financial asset from which you hope to make a large capital profit. North of the border a significant number of people look at the same chart and wonder how young people will ever be able to afford their own home (just to live in not as a profit centre) and look at the other lines on the chart and think ” more fool them” The Conservative party have never understyood that difference in outlook and never will so as both Salmond and Cameron have recently alluded to there will, for the foreseeable future , be more pandas than Conservative MPs in Scotland.

Those who are greedy and selfish by nature almost always look at relative performance figures and see faults with the “poorest performer”. The reality generally is that the highest performers have been in the biggest bubble and have the furthest to fall and the most pain to suffer once reversion to the mean, or more more basically common sense prevails. My guess is that there is some 20 years or so of pain to come as the unwinding continues. As there were people in Scotland who bought towards the end of the bubble we, with our supine property market, will suffer but not to the same extent as those who regard above trend growth and capital values doubling in 5 years as not good enough – they will have much more to worry about.

Your jibe about Scottish banks blowing up the UK banking system is little more than ill informed mud slinging. No doubt you remember that Barclays were in a head to head with RBS to buy ABN Amro and were only saved from that fate by being outbid by the ego of Fred. He unfortunately visibly self inflated as his largely London based advsers and the London based media goaded him onwards with headlines such as “London is being pitted against Edinburgh” and profiles such as
” The Biggest Hitters in British Banking” which of course listed him and his “attributes”.

For the record I used the same upside down ( some would say Scottish) viewpoint about how one should use relative performance figures to help identify that RBS shares were much too high and sold somewhere North of 550p and I was short of the housing market as early as 2007. I am a house owner lucky enough to now have substantial equty in my now mortgage free property but I hope house prices continue their decline because I have no wish to prosper any further at the expense of the younger generation. And no I have never voted for the Scottish National Party – yet.