FED cuts by 0.5%

IveSeenTheLight

!!!!!!? wrote: »

But of course, low interest rates will stop that happening, right?

We are going to have recession and job losses no matter what happens to interest rates.

The market is telling us "Enough reliance on credit, pay down debt until things are more balanced".
.

Didn't we discuss before how lower interest rates will help tracker mortgages debt (and other that are passed on) to be paid off earlier.

If it also helps to save some jobs, then it helps those people in their saved jobs to continue paying down the debt.

Or do you propose putting interest rates up, more people paid off so that those who are not in debt (savers) benefit?

How does higher interest rates help those in debt?

Realy

!!!!!!? wrote: »

But of course, low interest rates will stop that happening, right?

We are going to have recession and job losses no matter what happens to interest rates.

The market is telling us "Enough reliance on credit, pay down debt until things are more balanced".

Our government is responding by trying to drag us back to the heady days of early 2007 (using borrowed/taxpayer money) because they don't see any way way of running the economy other than piggybacking on easy consumer credit.


It's one thing to introduce emergency measures to prevent complete implosion of the financial system, it's another to pursue fruitless and dangerous policies of monetary laxness in the misguided hope of flogging your dead horse back to life.

But of course the electorate expect to be kept in the manner to which they have become accustomed in the last decade so like any good politicians facing election the Government will do whatever it takes to stave off the problem just that little bit longer. If that means trying to rekindle a credit boom after it goes bust, no matter what the longer term cost, so be it it would appear.

:rolleyes: !!!!!! do you know that increasing rates in a recession would make the problem worse?
You may profess great financial knowlage but know !!!!!! about how companies run. (or pehaps you dont care )
PS the 07 levels of lending was based on amount of money not rate or criteria.

Do you think the US and japan are cutting rates for a laugh?
For some one who seems switched on I am surprised you dont get it. The global economy sees these as less of a risk in a resession, I think exchange rates prove that.

kennyboy66_2

!!!!!!? wrote: »

But of course, low interest rates will stop that happening, right?

We are going to have recession and job losses no matter what happens to interest rates.

Without going off track and throwing bogus arguments in, can you answer this simple question.

Which of these interest policies when applied to the current situation will result in the highest levels of unemployment and business failures ?

1) Interest rates of 6.5%
2) Interest rates of 4.5%
3) Interest rates of 2.5%


ps - its not a trick question.

WTF?_2

Realy wrote: »

:rolleyes: !!!!!! do you know that increasing rates in a recession would make the problem worse?

You do know that inflation will make problems worse? It might have been forgotten for the moment in the assumption that deflationary forces are simply going to make it a non-issue in a recession but I have a feeling that it will be biting again sooner rather than later. No-one can honestly think that in a country where imports are so prevalent that the huge slump in the value of the pound isn't going to have an effect on consumer prices and those of imported materials.

You may profess great financial knowlage but know !!!!!! about how companies run. (or pehaps you dont care )
PS the 07 levels of lending was based on amount of money not rate or criteria.

Do you think the US and japan are cutting rates for a laugh?
For some one who seems switched on I am surprised you dont get it. The global economy sees these as less of a risk in a resession, I think exchange rates prove that.

I don't profess any great financial knowledge whatsoever but I do know that the people at the top who are now throwing caution to the wind to 'save the economy' are exactly the same people who were at the helm during the crazy credit bubble and didn't see any of this coming.

Therefore, my trust in their abilities to get us out of the mess is rather diminished to say the least.

The market is sending an extremely clear message to pay down debt and reduce reliance on credit. Ignore it at your peril.

chucky

sometimes whatever action is taken by the authorities it is never good enough and they will be negative about it instead of looking at the bigger picture.

it's something that we have to get used to - !!!!!! has his own opinion.

Realy

chucky wrote: »

sometimes whatever action is taken by the authorities it is never good enough and they will be negative about it instead of looking at the bigger picture.

it's something that we have to get used to - !!!!!! has his own opinion.

Agreed, if increasing intrest rates is the way for people to get people to pay back money quicker (very unlikely if they have less cash)

Perhaps we should lower them to make people save more?
This as got to be true !!!!!!, if you see higher rates is better for paying debt back, lower rates must make it better for saving acording to you.;)
Remember every action as a equal and opposit reaction.:D

PS !!!!!! this is way past debt now, they are dealing with the ability to pay it back, if you can't see that I feel sorry for you as unenployment would come as a shock to you if the base rate went up to 6% at the moment.

PPS get over the inflation argument you know it is going to fall, rate cut or not.

WTF?_2

kennyboy66 wrote: »

Without going off track and throwing bogus arguments in, can you answer this simple question.

Which of these interest policies when applied to the current situation will result in the highest levels of unemployment and business failures ?

1) Interest rates of 6.5%
2) Interest rates of 4.5%
3) Interest rates of 2.5%


ps - its not a trick question.

Why not include zero percent interest rates in there (if low interest rates are the be-all and end-all to economic problems) and tell me what you think is the best option?

I'm not going to get drawn on what exact numerical value interest rates should be set at. My point is that assuming that they should just be cut, cut and cut again is pretty dangerous thinking.

Normally you'd cut interest rates sharply during a recession because you'd have been running them quite high during the boom years (and cutting government spending and paying public sector debt off) leaving you scope for generous cuts as the economy turned down.

This time around though, we've had stupidly low rates and increased public borrowing throughout the good times leaving us with high CPI and big debts just as we should be entering a phase where we can cut the rates. Bond markets are balking at lending the government the sorts of amounts of money that it wants and yet the thinking is that interest rates can simply be slashed with abandon and this will see us through? Bonkers.

WTF?_2

chucky wrote: »

sometimes whatever action is taken by the authorities it is never good enough and they will be negative about it instead of looking at the bigger picture.

it's something that we have to get used to - !!!!!! has his own opinion.

Got any facts to debate or are you back to just taking pot shots at me personally?

Yes, I have my opinions - disgraceful eh?

Realy

!!!!!!? wrote: »

Why not include zero percent interest rates in there (if low interest rates are the be-all and end-all to economic problems) and tell me what you think is the best option?

I'm not going to get drawn on what exact numerical value interest rates should be set at. My point is that assuming that they should just be cut, cut and cut again is pretty dangerous thinking.

Normally you'd cut interest rates sharply during a recession because you'd have been running them quite high during the boom years (and cutting government spending and paying public sector debt off) leaving you scope for generous cuts as the economy turned down.

.

Time for you job in politics.;)

WTF?_2

Realy wrote: »

Time for you job in politics.

Why bother addressing points made and defending your own position when you can just make a sarky put-down against the person whose views you disagree with, eh?

Seems to be a time-honoured tradition amongst a certain element on this forum.