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Tuesday, March 03, 2009

Eleven Plus Finance

One day a number of our eleven plus children may be leading the country. Some of them may be financiers, others industrialists while some may emerge as politicians. Bright and articulate young leaders will be needed in the future.

We need to look back in history to see other occasions when the world was in financial turmoil. During 1930 – 32 the whole financial world was turned upside down. The wholesale prices of commodities fell – especially wheat. Rubber was also a key factor in the market’s collapse. The prices of stocks fell and the holders could not meet their obligations. There was a fall in the volume of orders – and the numbers of unemployed grew rapidly. The value of the world’s income, in money terms, fell by half.

In 1932 the unemployed grew to one sixth of the working population. Britain was in a dire state.

Of course the financiers and the economists could not agree on the causes of the problem. They could equally not suggest a solution. Naturally the banks were blamed. A topical solution was the creation of vast public works. The banks kept saying that they saw signs of improvement. There were cuts in the salaries of cabinet ministers, judges and others.

Britain had to borrow £50 000 000 to balance the budget. It took Britain some time to pay the money back. It would make an interesting Eleven Plus question to work just how much Britain had to borrow in today’s terms!

We can see immediate parallels between the banking crisis of the early 1930’s and that of today. Banks still need to borrow money. Leaders are still being vilified and hounded.

Strong leaders were needed then to drive the economy forward. Perhaps some of our eleven plus children will go down in history if they can save the country the next time a great crisis comes again.

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