Punish savers and make them spend money - The Times

maninthestreet

It was irresponsible lending that got us in the position we are in now. More of the same is just like giving a drug addict drugs to try to cure their Cold Turkey.

CDes

Addiscomber wrote: »

What nonsense. If we all took our money out to spend the banks/building societies (even if they could actually pay us all in the runs on them) would have even less to lend than they do now

Where do you think your money goes after you spend it? Thin air?

I'd be the first to have my money out if this happened. But it is ridiculous to think it would.

Addiscomber

CDes wrote: »

Where do you think your money goes after you spend it? Thin air?

Of course not, it circulates around, but we are constantly told that businesses are in trouble because they cannot get credit - if banks can't raise money because the money markets have seized up then they need savers deposits even more. If we all took our £££s out and kept them in a safe they would have even less to lend than they do now. OH and I are not in a position to spend our savings (in fact we have to add to them regardless of low interest rates) because we will have a shortfall on our endowment policy to meet when our mortgage comes to an end.

teabelly

A two tier interest rate system is probably the answer. Decent savings rates to allow interest earned for people to spend that and low borrowing rates so borrowers had more spare cash to waste.

Lokolo

Geenie wrote: »

Because in the words of Yazz in 1988, singing about eviction from her home and wondering wher her next meal was coming from......"The only way is up, baby" after a down turn.

Can you deny she wasn't right, as house prices did rise!

Funnily enough that song was stuck in my head yesterday and I didn't know who it was by! Now I do!!

steadysaver

teabelly wrote: »

A two tier interest rate system is probably the answer. Decent savings rates to allow interest earned for people to spend that and low borrowing rates so borrowers had more spare cash to waste.

Nice idea, but if a bank lends someone 10,000 at 2% and pays you 4% interest on your 10,000 savings, where does the shortfall come from?

Thats generally the reason why loan rates are higher than savings rates. The difference being the banks profits. If it was the other way around, byebye banking system.

Pobby

What a lot of old tosh. First we are told to save for old age. Work in progress, and now they are telling us to spend. Old GB stuck his mitt into pension funds. We planned on a certain amount for retirement but annuity rates have halved in less than 20 years. We have a savings pot which is doing next to nothing ( low irs ).

So please tell Oh fat Scottish wise man, what do you want?

I have a deal for you. I will go and spend everything I have on Chinese tat, in the same way that people have been doing for years. You, Oh product of the White Heather club agree to give me a very decent amount in retirement. Deal or no deal?

StevieJ

dopester wrote: »

Zero rates don't bother me much.

The slashing of interest rates to try and maintain high house prices is going to bring about other consequences too, which may take some time to work through. These consequences will thwart government in trying to maintain the house price super-bubble, and will surely affect other things like lowering rents further.

Are you tring to get a rent cut? your Mum won't be happy

Pobby

Well looks like we are being punished further. Another half a per cent off base rates.

seven-day-weekend

Another vote for money under the mattress (aka a home safe) here. I will not be frightened into spending our hard-earned savings on cr£p that I don't want or need.

We already do this in Spain. Our bank account in Spain pays us no interest. so any money we have spare(not much these days I'm afraid) does not get put there.