How to solve the interest rate problem

HAMISH_MCTAVISH

1. Put everyone who wants interest rates to rise in a room.

2. Split them up in groups of 20.

3. Tell them we'll raise rates as soon as each group comes up with one volunteer to lose their job, and another two volunteers to suffer financial hardship from reduced working hours, as the country tips back into recession.

That should focus their minds somewhat....;)

1984ReturnsForReal_2

4: Just rob the person with the most money of all their wealth

ILW

What if many of them are retired and living off the interest on their savings?

1984ReturnsForReal_2

ILW wrote: »

What if many of them are retired and living off the interest on their savings?

Or they are all children or scrounging of the state?




Or what if they are all Doctors?

shortchanged_2

So Hamish are you saying because of HPI this country is now well and truly shafted because any increase in interest rates will be too devestating for the economy?

ILW

It appears that the only ones Hamish thinks are important are highly indebted homeowners. Nobody else counts in his world.

the_flying_pig

H's postinh shows a level of variety & cognitive horsepower that's roughly on a par with what I'd expect from a parrot who'd spent 6 mths in an estate agent's office.

Squawk, house prices always go up, squawk.

ManAtHome

An alternative - put everyone who wants long-term ZIRP+QE in a room and cap their wage and pension increases to the same pounds per week as the State Pension increase...

Batchy

From WIKI...



Systemic reasons for deflation in Japan can be said to include:

• Fallen asset prices. There was a large price bubble in both equities and real estate in Japan in the 1980s (peaking in late 1989).

• Insolvent companies: Banks lent to companies and individuals that invested in real estate. When real estate values dropped, many loans went unpaid. The banks could try to collect on the collateral (land), but due to reduced real estate values, this would not pay off the loan. Banks have delayed the decision to collect on the collateral, hoping asset prices would improve. These delays were allowed by national banking regulators. Some banks make even more loans to these companies that are used to service the debt they already have. This continuing process is known as maintaining an "unrealized loss", and until the assets are completely revalued and/or sold off (and the loss realized), it will continue to be a deflationary force in the economy.

• Insolvent banks: Banks with a large percentage of their loans which are "non-performing" (loans for which payments are not being made), but have not yet written them off. These banks cannot lend more money until they increase their cash reserves to cover the bad loans. Thus the quantity of loans are reduced and less funds are available for economic growth.

• Fear of insolvent banks: Japanese people are afraid that banks will collapse so they prefer to buy gold or (United States or Japanese) Treasury bonds instead of saving their money in a bank account. People also save by owning real estate.

I think this is where Hamish is coming from!

nembot

MSE need to get with the times and understand IP banning will stop 99% of idiots rejoining the site.

Hamish we take with a pinch of salt, only posts outside of his agenda are entertaining and occasionally factual - compared to your posts ghouls... which suggest you're a bit of a kn0b.

wymondham

ILW wrote: »

What if many of them are retired and living off the interest on their savings?

Exactly. Hamish forgot those that have been careful (or is the word prudent!) for most of their lives and saved for their retirement or standard of living. These people have been sacrificed recently to keep artifically, unsustainably low interest rates. We now have invented a serious problem of most people now think this is normal and have budgetted using unrealistic rates - interesting year coming up!