Normality again?

shaven-monkey

live yesterday, pay now with your home and anything else if you happen to have taken unsecured loans.

Personally, I think the this crisis will give everyone a realitiy check.... we can't all go on a holiday every year, drive a new car and live in a big house. Silver lining in the cloud?

So instead of the population being directly in debt to private interests, the government is in debt on our behalf to private interests leading to either a tax hike of spectacular proportions in the future or a thatcherite style sell off of the few remaining public owned assets the country has.

It's not a reality check it's a harvest of value by the organ grinders from the monkeys. Capitalism has this interesting side effect of only really benefitting the capital at the expense of those who weren't taught about what capitalism means.

You may have been cautious, prudent and generally a sensible person by avoiding a crippling burden of debt, saving for purchases and other clearly insane practices. If you pay tax, you're still going to end up paying for the credit crunch possibly with the home you could afford until your employer went bust.

As skintchick says, the government doesn't care. The people who suffer in this correction are just collateral damage, if you'll pardon the pun.

Next election vote for the Liars and Thieves party, a vote for liars and thieves is never wasted.

space_rider

skintchick wrote: »

I've never had any of those anyway. I went ten years without a holiday, had old bangers till I nought a new Skoda four years ago which I still have, and live in a small house before which I lived in tiny rented flats.

And I still don;t see anything good for me in this situation - I got made redundant, I am pregnant so unemployable, and our savings are earning zilch.

Well done for being so frugal all these years? Rubbish. This government doesn;t care about people like me, never has, never will do.

Enjoy your pregnancy and enjoy your babys early months. I had to go back to work with my older children by the time they were 3 months. Had to stay home with my last child because she had health problems. Had no money for luxuries but at least she had me for the first 3 years and it was great just being a mum.

tradetime

michaels wrote: »

Hmm - best historical parallel I can see is the Japan bubble and bust which has not (yet) lead to anything but deflation - it is the old pushing on a piece of string thing - doesn't matter hopw much cheap money you make available if people don't want to spend it.

Whilst it probably is the best example of a similar crisis, that springs to mind it is already unfolding sufficiently differently that it might be reasonable to expect a different result. I have not studied the Japanese crisis, but from what I have read and generally understand, the two could be said to have stemmed from similar beginnings, lax oversight and the development of asset bubbles, particularly in real estate, which burst.

However, Japan's crisis kicked off circa 1991, it was not until 1997 that Japan began injecting capital directly into the system, there were stimulus packages in the form of infrastructure projects etc prior but not the sort of direct funding we have going on. We on the other hand have been much faster and much more agressive, and ours is global.

Secondly Japans banking systems did not write off, in fact to the best of my knowledge have still not written off the vast majority of bad loans that were made to companies and individuals that were invested in real estate, this has repeatedly been delayed in the hope that the land and property will improve, in many cases they even make loans to those involved so they can service the debt but do not have the capacity to make loans for economic expansion or consumption, this is massively deflationary. We on the other hand seem to be allowing governments to monetize it and are seeking to force banks to renew new lending to boost spending..

Thirdly the Japanese crisis did not occur against the backdrop of a global recession, or alternatively drag the rest of the world into a recession, depending on how you view it. The rest of the world was ticking along reasonably well, there were drama's here and there but they were not inter related or influenced by Japan. Thus, the worlds demand for oil and other commodities did not slow down dramatically causing large supply cutbacks which will create shortages when demand returns. Nor was there a global credit crisis causing all sorts of research and exploration projects to be shelved, again adding to future shortages.

The other big difference of course is that Japan was a net creditor, not a debtor, there was no temptation or ncessity for Japan to print money, it's not the spending of money in existence, so much, that is inflationary, it is the creation or expansion of credit that leads to it.

Whilst no doubt if you studied it there would be many similarities, I think there are enough differences in how it is playing out, and the amount of money being thrown around to expect a different result. Though as always time will deliver the result.

mewbie_2

You dozy old doomies! Normal is watching your house go up in value as you walk down the drive, and being able to mew dosh out of it to buy shiny things. Having a 4x4 or 2, big big screen tv, lots of stuff. On top of that, being able to buy flats for no money down, not even bother renting them out to those no good 'renter' types ugh, and then just mew the profits out of them as well! No need to work, free money - and all that under a Labour government! Thanks Gordon - you really knew how to make this country great again, shame about the silly Yanks blowing it, but we'll be back to normal this time next week.

tradetime

LOL, ah how I'd miss those shiny things.

WTF?_2

Assuming that the debts can and will one day be paid back, you are much better off just saving up for all this stuff rather than using credit to buy stuff you don't have enough cash in your bank to afford..

Getting it on credit means paying back a massive wodge of interest on top unless you clear the bill sharpish. If you saved up, you don't need to pay that interest and maybe you make interest while you save. You can also often negotiate a better deal with cash. Plus you feel a much better sense of satisfaction on stuff you buy with your own money (IMO).

Credit really did let people live a totally false lifestyle and they will be paying for it for a long time to come.

mewbie_2

tradetime wrote: »

LOL, ah how I'd miss those shiny things.

I must confess to stealing that expression from PasturesNew - thanks PN. Btw, now we are so much more of a public forum, no need to mention the jpg.

ginandtonic1988

skintchick wrote: »

I've never had any of those anyway. I went ten years without a holiday, had old bangers till I nought a new Skoda four years ago which I still have, and live in a small house before which I lived in tiny rented flats.

And I still don;t see anything good for me in this situation - I got made redundant, I am pregnant so unemployable, and our savings are earning zilch.

Well done for being so frugal all these years? Rubbish. This government doesn;t care about people like me, never has, never will do.

Too right my husband has come home tonight and they are laying staff off where he works, he was made redundant in July so has only been in this job for a while, I work in conveyancing goodness knows what the future brings for me. We got our selves out of debt after discovering MSE and have stayed that way, we have saved for the last two years and had just really started enjoying life. If husband can't get another job then we'll just have to use what little we have saved. There is no incentive from this goverment to save or make a better life for yourself. I look around and see people who won't work claiming benefits and better off than us and I wonder where have we gone wrong.......?

By the way Skintchick congratulations :beer: on the baby its nice to hear some good news at the moment!

StevieJ

!!!!!!? wrote: »

Assuming that the debts can and will one day be paid back, you are much better off just saving up for all this stuff rather than using credit to buy stuff you don't have enough cash in your bank to afford..

Getting it on credit means paying back a massive wodge of interest on top unless you clear the bill sharpish. If you saved up, you don't need to pay that interest and maybe you make interest while you save. You can also often negotiate a better deal with cash. Plus you feel a much better sense of satisfaction on stuff you buy with your own money (IMO).

Credit really did let people live a totally false lifestyle and they will be paying for it for a long time to come.

We would have a serious deflation problem if they put you in charge , whilst what you propose is OK for the individual, if it became the norm for people across the nation/world our worst nightmares would be realised:eek:. Every cloud has a silver lining so it may be good for the environmemt.