The horrible truth Mark “Goldman Sachs” Carney is afraid to tell us – we’re already zombies

Most of the papers seem to be having orgasms over the new Bank of England boss supposed George Clooney lookalike Mark Carnage’s announcement yesterday that interest rates will remain at virtually zero till unemployment falls below 7%. In fact there seem to be only 2 journalists – Jeremy Warner at the Telegraph and Jeff Randall at Sky – who actually understand what is really happening.

So, I’ll try to explain in five key points what Mark “Goldman Sachs” Carnage is really up to:

1. Britain is going bankrupt. Our useless, financially-incontinent government is borrowing �120bn a year and will increase our national debt from �700bn in 2010 to �1.4trn by the 2015 election. A rise in interest rates would be catastrophic for the government as our annual debt payments would shoot up from about �45bn now to �80bn or more, which we can’t afford.

2. Several of Britain’s larger banks are to all intents and purposes bankrupt as they are sitting on hundreds of billions of dud loans to zombie countries (Spain, Italy, Greece, Portugal, France), zombie companies (about 150,000 companies which have been loaded up with debt and which are struggling just to keep up with the interest payments) and zombie homeowners (people who can just about afford their current mortgage payments). A rise in interest rates would be catastrophic for the banks as the zombie countries, companies and homeowners would go under and the banks would be forced to recognise that many loans are worthless.

3. The Tories are desperate to get re-elected in 2015. Were interest rates to rise and some zombie countries, companies and homeowners to go under, this would cause a massive economic shock and plunge Britain back into recession. So the government is pouring cheap money into our banks in the hope they will lend it to zombie companies and homeowners. Carnage’s mates at the banks are using this cheap money to increase their profit margins and bonuses.

4. This is why Mark Carnage cannot allow interest rates to rise. The whole economy is a house of cards and an interest rate rise would bring it crashing down. As for our supposed recovery – our GDP is about �1.5bn or so. Of this, around �120bn (8%) is made up of borrowed money which we can never pay back. It’s not real, it’s an illusion based on �borrowed money and borrowed time.

5. By holding interest rates well below the level of inflation Carnage is doing three things. He’s trying to inflate away our ever-increasing government debt. He’s transferring vast amounts of money from people who have savings to zombie companies and zombie homeowners – about �40bn a year that savers are losing in interest. He’s forcing savers to take their money out of relatively safe bank accounts and to put it into risky assets like property and shares as they desperately try to find some way of beating inflation. This is causing an asset price bubble pushing up the price of property and shares. Were interest rates to rise, many people would pull their money out of risky assets causing a property and shares price collapse.

Following Carnage’s announcement yesterday, we now know this crazy situation of supporting over-borrrowed zombies at the expense of those with savings is going to continue for another 2 to 3 years. But what then? That’s the interesting question to which nobody seems to have the answer.

By the way, if Carnage isn’t going to change interest rates for about 3 years, couldn’t he take a nice long unpaid holiday and save us all a lot of money?

(Tomorrow I’ve got a world exclusive. It’s a copy of a private letter from the great President of the Extremely Democratic Republic of Zimbabweland to David Cameron, President of Englandland)