2009 the year of hibernation
We call the first month of the year January after Janus, the Roman god who guards doorways. He has two faces one looking back to the year just gone and the other looking forward to the year to come. This week if the face looking back is in shock, the one looking forward is terrified.
In 2008 we finally realised that the banks had failed in their task of carefully looking after all the money in the world. They made fortunes by lending money they did not have on such a colossal scale that the whole machinery of banking including the system that moves our electronic money from place to place almost collapsed.
But their job is so important they remain largely unpunished. Instead taxpayers have given them or promised to do so what could eventually be $10,000,000,000,000 to try to replace the imaginary money they lent to us, to businesses and to each other.
Instead it is the people who behaved properly who are paying the price for their mistakes. The price of shares has fallen by about a third over the year. For those approaching retirement and relying on a pension pot they have saved into over years that will mean a lower pension for the rest of their life. And those already retired who rely on the interest earned by their savings to boost their pension will see that income cut in half as interest rates plummet.
So those who have been prudent who have saved for their future in a pension or in the bank will be the ones to suffer.
Life is little better for those in work in what was a booming economy. Every day more than a thousand people lose their jobs in retail, in sales, in manufacturing, in services, as the credit fuelled spending spree comes to an end.
Those who become unemployed will find it takes longer and longer to get another job. And those who keep their jobs will find the taxes they pay rise inevitably to pay for the Great Bank Bailout of 2008.
Banks do not even seem to be looking for a solution. Governments try but have not got a clue what changes to make so they except to spend our money. So the rest of us can only go into a Year of Hibernation earning less, doing less, spending less and hope a weak sun will begin to shine in 2010. It may not.
Happy New Year.
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