Letter: Debt mountains

At last I begin to understand! Many aspects of the current mountain of euro debt had me totally baffled. On Friday, for instance, I read that Belgium's debt equals its GDP.

The whole country should therefore have come to a complete halt, especially as it presently has no political leadership, nor a 2011 budget. That it still operates is apparently due partly to the fact that most of its debt is owned by Belgians themselves. Isn't it still debt?

I didn't know where the International Monetary Fund finds money to lend for bail-outs; even less did I understand where extra rescue funds of €100bn proposed by Eurozone nations themselves would come from, they being all in deficit except Germany.

It was pondering this impossibility that finally brought the flash of illumination: there just isn't any money. Anywhere! All such financial transactions are mere inter-bank transfers of electronic digits which can be adjusted ad infinitum. That is what allows banks to lend more "money" than they possess; they just electronically "print" more to lend to the public at large and to countries as a whole in the form of easy credit. And bank credit is of course simply another name for customer debt.

Robert Dow

Ormiston Road

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