Great news / terrible news.

Hector-The-Inspector_2

Just nipped back up to THANK YOU for your




useless post!!:D....... goodnight,

kennyboy66_2

Cannon_Fodder wrote: »

I have never said raise interest rates, in relation to the recession.

In my opinion IRs are pretty benign right now.

Into/Through/Exiting BOTH the previous recessions, we NEVER got interest rates as low as we have them today. Why should we need to now?

http://www.bankofengland.co.uk/mfsd/iadb/Repo.asp?Travel=NIxIRx

.

As inflation was as high as 22% in the 79-81 recession and inflation as high as 10% ish in the 90-91 recession, then yes we never got interest rates as low as today.

It would be peverse to use interest policy in 79-81 as a template for policy now.
Even the bone-headed monetarists who imposed this policy were eventually forced to admit they got it badly wrong.

Realy

Cannon_Fodder wrote: »

From http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3218075/Britain-faces-deflation-for-first-time-since-1960.html

Japan suffered almost a decade of deflation and falling economic growth in the 1990s after its debt-fuelled economic bubble burst with painful consequences. Despite cutting official interest rates to zero and pumping cash into the economy, the Bank of Japan was unable to pull prices back up into positive territory for years


Well I suppose using historically low interest rates can't possibly fail, then.

Though I concede that we may not have much choice, such is the state we are in.

:rotfl:
They could have gone bust and you think they have failed.
Your argument is shear madness.
I Repeat IT IS NOT ABOUT PULLING UP HOUSE PRICES

Realy

Cannon_Fodder wrote: »

30 seconds browsing over at the Savings forum...

http://forums.moneysavingexpert.com/showpost.html?p=15066469&postcount=14

Well done you found 1 pensioner with savings best not do it then.:rolleyes:
Looks like it could help millions lowering rates.

Try this link
http://www.bristol.ac.uk/news/2008/212017945227.html

· credit users in their late 50s and early 60s owe on average at least four times as much in unsecured credit as their counterparts did a decade ago;

· a quarter of all people approaching state pension age have outstanding consumer credit commitments. Outstanding credit commitments increase the risk of financial difficulties by 26 times;

Levels of credit use may already be forcing people to delay the timing of retirement;

· half of households headed by someone in their 50s, one in eight over 60s (over 1.5 million) and 4 per cent of people aged 80-84s (about 60,000) are still repaying a mortgage; and

· arrears on credit commitments are most common among people in their 50s and 60s, but among those aged 70 or over, utility bills are the main area of financial difficulty.

WTF?_2

IveSeenTheLight wrote: »

You have said that now is the time to pay off debts (LINK) but argue against the lowering of interest rates which would diretly help those in debt to pay it off

Yeah right - low interest rates are all about reducing debts :rolleyes:

The whole theory behind lowering interest rates at this time is to stimulate economic growth through cheaper borrowing for businesses and individuals and encouraging consumers to spend their cash to stimulate the economy (with the obvious implication that they won't be saving it).

The markets are telling us "Look, enough credit. Time to start putting money in the bank instead".

Government policy is aimed at maintaining credit (borrowing) at high levels and discouraging people from saving.


A bit of a disconnect there. A total withdrawal of credit is not desirable but the government seems hellbent on getting lending back to 2007 levels which they bizarrely consider 'normal'. This is just disastrous. The easy credit train has left the station folks.

chucky

dopester wrote: »

I'm not going to explain it all for you - suffice to say, if you do manage to meet your repayments on both your properties... I expect they will be worth a mind-melting amount less that you bought them for in in 3 to 5 years (sorry).

I'm revising my outlook for a -70% crash to -80%.

the first paragraph is a possibility but unlikely in my opinion but could happen - no real argument with that.

but the second paragraph is just crazy - a property being worth 20% of it's value!?

IveSeenTheLight

!!!!!!? wrote: »

Yeah right - low interest rates are all about reducing debts :rolleyes:

Well it is for me and I would recommend that everyone who benefits from interest rates dropping on their mortgages to maintain the payments if they can and reduce the oustanding capital.

Definately an MSE message regarding paying off mortgages

It's also a tune you've been piping alot about lowering debts

Cannon_Fodder

Realy wrote: »

Well done you found 1 pensioner with savings best not do it then.:rolleyes:
Looks like it could help millions lowering rates.

Try this link
http://www.bristol.ac.uk/news/2008/212017945227.html

· credit users in their late 50s and early 60s owe on average at least four times as much in unsecured credit as their counterparts did a decade ago;

· a quarter of all people approaching state pension age have outstanding consumer credit commitments. so three-quarters don't have o/s credit. Outstanding credit commitments increase the risk of financial difficulties by 26 times;

Levels of credit use may already be forcing people to delay the timing of retirement;

· half of households headed by someone in their 50s, one in eight over 60s (over 1.5 million) and 4 per cent of people aged 80-84s (about 60,000) are still repaying a mortgage; so half in 50s, seven-eights in 60s, and 96% in 80s DON'T...and

· arrears on credit commitments are most common among people in their 50s and 60s, but among those aged 70 or over, utility bills are the main area of financial difficulty.

Getting Govt/council spending under control so those on Fixed Incomes are not hit by double-digit Council Tax bills, would be helpful, to both debtors and savers.

Looking to spend billions to "buy" our way out of recession will probably help the most spendthrift in society, while hurting the most prudent.

That's a great example to set for future generations.

IveSeenTheLight

dopester wrote: »

I'm not going to explain it all for you

I've not quoted most of your post as you changed subject.
The discussion was about the lowering of interest rates and how it can help to lower the debt and you changed it into a better to borrow less post.

I wonder if your not going to explain it all for me as a cop out that you cant.

Keeping it simple, if someone owes £200k and they reduce it to £199k over the coarse of a year by a 0.5% interest cut and plough that interest money saving into the debt, then the debt is reduced.

If you are looking at it as if the £200k debt is on a property worth £400k, then you own 50% and in debt to 50%. Then prices drop in a year so you owe £195k and the property is worth £300K, then the percentages are now 35% owned and 65% owed, thus in theory you owe a higher percentage.

Is this how you perceive the debt to be higher? If so, this has nothing to do with interest rate chages

The debt is fixed, interest increases the debt. The lower the interest, the lower the debt increase and the ability to pay more into reducing the debt capital

WTF?_2

IveSeenTheLight wrote: »

Well it is for me and I would recommend that everyone who benefits from interest rates dropping on their mortgages to maintain the payments if they can and reduce the oustanding capital.

Definately an MSE message regarding paying off mortgages

It's also a tune you've been piping alot about lowering debts

The best way to lower debts is to pay off the principal.

Lower interest rates just help you service the interest on the debt.

Will all the people benefitting from lower interest rates be sensible enough (or able, or want) to overpay and reduce the capital amount of the debt? My guess is that only a small proportion will do so.

The markets are telling us loud and clear "There has been too much borrowing, time to stop it and pay the money back".