A completely pointless exercise!Nov 4th, 2008 | By Ian Poulton | Category: Personal Columns
Drinking a mug of tea, I rattled off the 250 words to enter the competition.
The Financial Times ‘Money’ section last Saturday carried details of a competition for “The Next Big Investment Idea”. The column declared, “Whether it’s about identifying a demographic trend, or capitalising on future change, or coming up with a solution to long-term financial stability, we’d like to hear your idea”.
I got my idea into 245 words:
The political success of the Jubilee International Debt Cancellation Campaign in the year 2000 showed the concept of debt forgiveness and a new start for people was an idea that was simple to grasp and one that gained widespread popular support.
Forgiveness Bonds would seek to address the debt situation within the domestic economy. Eliciting capital from ethical investment funds and from Sharia investors, they would buy bad debt from bank’s mortgage books and set about rehabilitating debtors through negotiating manageable repayment packages. The bonds would be secured against a property portfolio purchased at heavily discounted prices and would be supported by the substantial goodwill both of politicians, who would find the problems of negative equity alleviated, from those in receipt of “forgiveness”, and from a wider public appreciative of a source of stability in the property market.
The launch of the bonds would require substantial political backing and the returns would be unspectacular; they would, however, represent secure and steady progress in the context of very high levels of market volatility. During World War II, the government issued substantial loan stock, encouraging people to be both patriotic and to have a reasonable return on their investment. A Forgiveness Bond might be marketed in a similar way, as something both patriotic and beneficial.
Is there any possibility of such a bond ever being launched? Probably not, but wouldn’t it be worth a try? It can’t be worse than negative equity and prolonged recession.
It was a pointless exercise. Economies do not work on the basis of benevolence, they work on the basis of greed; the idea of “forgiveness” is just not compatible with market economics.
It was a completely pointless exercise because, having sent the entry by email, I read the small print rules which include: “The entrant must be a UK resident”.
I should stick to matters proper to clerical life, like the damp penetration in the south wall of the nave and remembering to order the Advent candles in good time.