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 interest shredding

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PostSubject: interest shredding   Thu Jan 08, 2009 6:09 pm

Interest shredding madness!
I do'nt know if it's just me and this is likely treasonous but is this Government completely stark raving bonkers?

Yet another interest rate cut dropping the level down to 1.5% and the difference this makes is astronomical to anyone thats been sensible with their money.

It seems this Government has a fiscal policy of bashing the thrifty to pay the greedy. I just wish I had known this many moons ago when I would have gladly taken out a 125% mortgage, maxed as many credit cards as possible, taken as many loans as possible etc and said Pooh Bear to that savings malarkey!

Yes I know im exaggereating a bit but it has to be said the law helps those that are flash with the cash. An individual Voluntary Arrangement (IVA) for example can help you clear your debt in months, by writing off the vast majority on your behalf. How can you get an IVA? One way is through bloodsucking leeches such as http://iva.co.uk/
there are literally hundreds of such companies around, like vultures waiting for their next feed. Or you could do it yourself, for free, just ask any number of debt charities such as consumer credit counselling service (cccs) a free debt charity. http://www.cccs.co.uk/ these guys help thousands of people every year get out of debt, free!

At a push theres bankruptcy which has laxed it's rules and regulations, making it easier for people to write off their debt and start over after just a few short 12 months!
This does damage your credit rating of course but if you have just blown tens of thousands of pounds and have no feasible way of paying the debt, I do not think that will be your main concern anyway.

In the 315-year history of the Bank of England rates have never been this low. During the Great Depression and the second world war interest rates did not dip below 2%, the level the Bank set last month.

Up to this point for some reason the Monetary Policy Committee (MPC) have received praise for driving down the cost of borrowing in an attempt to increase borrowing and start spending.

Is it just me or can other sensible, level headed, non academic highly trained phd economists see the logical fallacy to this argument? To be honest I wonder is it worth pursuing an academic career in economics when the best the MPC can come up with is 'lower interest rates to encourage borrowing'.

Do they not think the British Public is up to their eyes in enough debt as it is without encouraging us to dig deeper in to even greater levels of debt? 'Spending money to get out of a recession is like standing in a bucket and trying to pull yourself up' Winston Churchill. Enough said really, but this Government can not comprehend this simple equation!

I understand the base principle behind the rate cut move; lowering interest rates 'should' lower rates of mortgages, credit cards, loans etc, while at the same time making saving less favorable. However banks are a business and they do want to make money, which it just happens the banks are big winners in this recession(I know technically we are not in recession yet but....) so the crafy Bankers have cut savings rates, some as low as 0.1% while not passing the savings on to loans mortgages etc. In fact credit card rates are going up, they have fancy ways of explaing why that is but im not going to delve in to that mire here, its not that its complicated, more just double talk from Greedy Bankers in my opinion to cleverly harvest more cash from its customers. I prefer not to think of people as customers of banks, rather cattle is how Bankers look at us. Sure there maybe the odd Shepherd that makes the bank pay them, but the majority are sheep or cows to be milked by the banking institution, and we are completely oblivious, even happy for it to happen.

So the cost of borrowing stays the same or increases while thaks to Labour it's next to pointless saving any money, especially considering you get taxed at source (pay packet) taxed when you spend money and taxed when you save money, Yippeee!!!! To think in the good old days of the middle ages the peasants thought a flat rate 10% taxation sytem was extortionate, nowadays we pay minimum 50% tax without even knowing it. I need to take some tax lessons from Branson, he pays virtually zero taxes and yet is a multibillionaire, thats the way to live.

I honestly do not know how I as an individual caused this credit crunch, diligently putting away 10% gross income every month in to a saving account to build my cash base and BAM!!!! Im hit hard by the Government and bankers to pay for all those a little more loose with their money and I'm not the only one in that situation.

Also note house prices are falling even further and no one is buying, some houses have been on sale a full year and no go, people are hanging on to the very last minute, either trying to catch a bargain or fearful of taking a mortgage and ending with a negative equity home. Repossessions are rising yet its harder for first time buyers to get a foot on the ladder as banks are imposing tight lending criteria, having perhaps, but doubtfully, learned lessons from getting their fingers burned.

I am now going to confess this Government is starting to scare me and I am not easily scared by credit crunches, recessions etc. They have bandied around the idea of 'Quantitative easing' as an option to achieve 'financial stability. This basically means they may resort to 'printing more money' to sort this complete mess out. The scary bit is this usually means Inflation spiralling upwards, out of control and with interest on savings rates so low, people losing jobs left right and centre, fuel poverty etc, I'm sure you get the picture.

Between you, me and the bedposts this Government have not got the first clue what they are doing about anything, especially not Economics. I have said this before and will repeat it parrot fashion in the slim hope someone will listen.

Stop cutting interest rates, bang them up! Encourage saving again, encourage finacial literacy programs, encourage businesses and citizens to take full financial responsibility and ride out the storms!

Lesson Endeth,

Regards,

Den.

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PostSubject: Re: interest shredding   Wed Jan 14, 2009 6:43 pm

Just had this article printed in letters page of local Very Happy Gazette

Cheers,

Den

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