So much for the credit crunch

RayWolfe

Am I a person? Are you?
If you exist, why no reply to the thoughtful responses of O4u and Hungerdunger or is knocking all you do?
Perhaps you are a ghost, that would account for the knocking.
Anyway, nice to meet you:
As I was going up the stair,
I met a man who wasn't there.
He wasn't there again today.
I wish that man would go away.
Hugh Mearns

OneADay

opinions4u wrote: »

He has taken equity stakes in two major banks and two small players.

He is, presumably, still funding the gap left by wholesale funds with renewable loans to the banks.

While you could argue that these renewable loans mean that banks don't need to pay higher rates to attract our savings, you need to be realistic. If bank A upped their savings rates, and all bank B customers moved their savings, then bank B would need a bailout. If both bank A and B increase their savings rates together, their losses grow. So they would also need a bailout.

A significant increase in interest rates would not significantly increase the amount of savings in banks and building societies. It simply moves the same money around the system chasing the best rate.

Do you have a solution to this, or are you seriously suggesting the banks should deliberately trade at a loss, going out of their way to take even more money from taxpayers?

I think you'll find there's a history of Labour governments making a mess of things. Come to think of it, the other lot don't seem to have a strong track record either.

Please clarify what the alternatives were, and what the outcomes would have been had they been chosen.

While I will willingly slate the Government and the banks for their economic recklessness prior to the recession, the concept of encouraging people to save their cash at a time the economy needs it to be circulating is a strange one for you to suggest. Encouraging people to be as economically active as their circumstances allow is a sensible policy for the circumstances.

Screwing pension schemes, uncontrolled public expenditure and reckless tax takes from an uncontrolled housing market were always the politics of madness though. Brown's economic miracle gave us a longer run of apparent stability but one hell of a bust at the end of it.

If you want to hedge against inflation in a tax-free way, use Index-Linked Savings Certificates.

When base rates were 5.5%, a 2 year fixed ISA was around 6%.

Now that base rates are 0.5% a 2 year fixed is is around 3.5%. A much bigger differential in favour of the saver.

You can moan all you like. Rates are low because the Government of the day doesn't want you to save, they want you to spend. That will change in time, but for now you have to like it, lump it, or emigrate.

Savers have a right to moan as its their money that is being borrowed to save the skins of those who borrowed above their means in the boom time and also to make Brown feel better.

Brown presided over the mass privatisation of building societies and then mergers of banks.

Only in 2007, RBS took over ABN Amro, a figure of £64billion was mentioned and I can still feeling the shock of reading that figure back then. No one flinched, no one said no to the takeover - not gordon or the eurocrats - this was the age of globalisation. Within months, Northern Rock went bust and the communist state could not bear to let it go down as it would mean disaster for labour.

Icesave happened and they agreed terms - so we thought now we cant even get that money back for 15 odd years, thats if they pay up ever.

Gordon sold the gold reserves at cut down prices and lost the country £7 billion.

Olympics 2012, £20 billion predicted I think in 2005 yet its now over £40 billion.

Savers in banks are paying the price, the unemployed are paying the price, the people who are losing their businesses are paying the price because one prude and his party could not keep his prudence.

I have removed my dosh from state owned banks now, most of my money is in foreign banks. That make sense?

apt

'That make sense?' In a word, no.

OneADay

apt wrote: »

'That make sense?' In a word, no.

It makes sense to me, get better returns on my money with foreign banks operating in UK rather than the state owned or the standard traditional ones who are not offering the rates. Call me vindictive but I also feel no need to support state owned banks with my money.

Of course rates will go up when no more quantitative bleeding is possible and inflation comes running back.

MiserlyMartin

Hallmark is absolutely right to moan and feel shafted for doing the right thing and being prudent. I actually cannot believe that there are people short sighted enough to not see what has happened let alone disagreeing with him and causing an arguement about it! It beggars belief. (perhaps they have been brainwashed by Gordons spin, denial and shifting of blame onto anyone but him and his government)

The fact he hasn't replied some of you in detail is probably because it would be pointless - a total waste of time and effort when it will go completely over your heads.

Lokolo

A lot of the time inflation was negative and we were still getting positive returns on our savings.

People keep complaining about low interest rates but until the last 2 months, inflation has been nowhere near the rates you can get in the bank so we've had it good in these times.

OneADay

Lokolo wrote: »

A lot of the time inflation was negative and we were still getting positive returns on our savings.

People keep complaining about low interest rates but until the last 2 months, inflation has been nowhere near the rates you can get in the bank so we've had it good in these times.

True but its no help to someone who has little savings and lost their job - and face a near certainty of inflation returning with a bang in future.

Its no point raising ISA allowances when people have no money to put in them.

Banks are still using the money savers have pumped into accounts to make bumper profits (they call it returning to profit, I call it shafting the savers).

Lokolo

OneADay wrote: »

True but its no help to someone who has little savings and lost their job - and face a near certainty of inflation returning with a bang in future.

Its no point raising ISA allowances when people have no money to put in them.

Banks are still using the money savers have pumped into accounts to make bumper profits (they call it returning to profit, I call it shafting the savers).

Then keep complaining or transfer all your savings out into Index Linked Certificates.......

There are other options.

Complain, complain, complain, or do something about it.

I have no problem with interest rates because I have been getting decent interest compared to inflation. I have moved some of my savings out into investments incase of hyper inflation but apart from that I am happy.

MiserlyMartin

Lokolo wrote: »

A lot of the time inflation was negative and we were still getting positive returns on our savings.

People keep complaining about low interest rates but until the last 2 months, inflation has been nowhere near the rates you can get in the bank so we've had it good in these times.

Thats a myth. We had temporary low inflation. And now we are getting real negative returns. The massive deflation which they used as the justification for stupidly low interest rates never really happened. Brown has fudged the inflation figures by removing and adding goods from the basket to suit, and flitting between CPI and RPI to use in quotes and BOE targets. If you work out your actual real personal inflation figure you will see. When was the last time we have had inflation 6 times the base rate? I don't think even the last Labour government achieved that.

Lokolo

MiserlyMartin wrote: »

Thats a myth. We had temporary low inflation. And now we are getting real negative returns. The massive deflation which they used as the justification for stupidly low interest rates never really happened. Brown has fudged the inflation figures by removing and adding goods from the basket to suit, and flitting between CPI and RPI to use in quotes and BOE targets. If you work out your actual real personal inflation figure you will see. When was the last time we have had inflation 6 times the base rate? I don't think even the last Labour government achieved that.

I used the BBC inflation calculator and I am currently in line with my savings rate.

Not sure why you are even looking at the base rate though. Savings are never in line with it, only the trend of going up and down when it does.