“Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take on more and more expensive debt, until their debt becomes unbearable.
The unpaid debt will lead to the bankruptcy of all banks, which will have to be nationalised, and the State will have to take the road which will eventually lead to communism.”
So says the Karl Marx quote that has been whizzing round Wall Street and the City.
We seemed a step closer to that prospect yesterday. Bank shares plunged again on both sides of the Atlantic amid concern that more capital injections will be required. Bank of America shares fell 20 per cent on reports that it needed further government help to complete the acquisition of Merrill Lynch. Merrill has suffered higher than expected losses in the fourth quarter and BoA is in talks with the American authorities about an infusion of capital.
Citigroup shares tumbled further, ahead of today’s results, which are expected to be horrible.
These falls took the combined value of Citigroup and BoA – so recently the two most valuable banks in the world – below that of Wells Fargo, the conservative West Coast lender.
Back in Britain, bank shares were also under the cosh again, as ministers scurried to finalise another package of measures designed to get credit flowing again.
Gordon Brown said that the toxic assets of banks had to be dealt with, which could require more capital, while Capital Economics forecasts British banks will lose £85billion over the next three years and lending will be slashed by £400billion unless they get more capital.
At this rate, RBS will be fully nationalised before Sir Philip Hampton takes over as chairman.
According to the Marx quote, this means communism will not be far behind. Except, of course, Marx didn’t say that. The quote is a fake. You just can’t trust those bankers.
Times Online
Full Marx for Karl’s Crytsal Gazing…
Oh, the irony…
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