Mervyn King: Raising rates would cause another recession

ILW

suburbanwifey wrote: »

So you wanted higher interest rates to buy a home so we could all line banks/building society's pockets? Don't the bankers of this world get enough?? Or did you want higher interest rates because you are a saver? I guess you are a saver huh? wanting people crippled by high mortgage costs due to high interest rates so you could line your pocket with interest yes?

High interest rates mean higher costs to borrow, on houses, on loans, to buy a car ... so interest rates should have been higher so we could all have been poorer to give the savers benefit huh

In you previous post you gave the impression that you thought the way house prices rocketed was a bad thing. I merely pointed out that the main cause of that was IRs being too low at the time.

suburbanwifey

ILW wrote: »

In you previous post you gave the impression that you thought the way house prices rocketed was a bad thing. I merely pointed out that the main cause of that was IRs being too low at the time.

I do think it was a bad thing, you are right - I also said it wasn't the fault of the buyers, wasn't my fault I had to pay a fortune to buy my home, who's fault it was I do not know ... but I know that higher interest rates then or now does not benefit you or me, not unless our total aim in life is to amass interest on savings. I both save and spend, you are a long time dead ... pointless saving every single penny for when you are old, how many will actually never get old and if you do, and end up in a care home, the Govt. will take it all back from you! The trick is to balance saving and spending and if more did that, there would be less debt, more security for all and the economy would benefit. Higher interest rates then or now benefits not one jot Joe Blogg in the street.

AndyGuil

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9085672/Moodys-puts-114-European-banks-on-downgrade-review.html
The ratings agencies are turning on the banks now.

ILW

suburbanwifey wrote: »

I do think it was a bad thing, you are right - I also said it wasn't the fault of the buyers, wasn't my fault I had to pay a fortune to buy my home, who's fault it was I do not know ... but I know that higher interest rates then or now does not benefit you or me, not unless our total aim in life is to amass interest on savings. I both save and spend, you are a long time dead ... pointless saving every single penny for when you are old, how many will actually never get old and if you do, and end up in a care home, the Govt. will take it all back from you! The trick is to balance saving and spending and if more did that, there would be less debt, more security for all and the economy would benefit. Higher interest rates then or now benefits not one jot Joe Blogg in the street.

Would you say that at this moment there is too much or too little debt in the UK as a whole.

the_flying_pig

ILW wrote: »

Would you say that at this moment there is too much or too little debt in the UK as a whole.

HAMISH: where's the option for 'not enough'?

suburbanwifey

ILW wrote: »

Would you say that at this moment there is too much or too little debt in the UK as a whole.

I can't answer that question as I don't know but at least I am honest about that.

ILW

suburbanwifey wrote: »

I can't answer that question as I don't know but at least I am honest about that.

Fair enough, but if you have no view on what is a sustainable level of debt, it is difficult to have much of a view on the right level of interest rates. IRs are the main factor of debt levels.

suburbanwifey

ILW wrote: »

Fair enough, but if you have no view on what is a sustainable level of debt, it is difficult to have much of a view on the right level of interest rates. IRs are the main factor of debt levels.

As an individual Brit who is at the mercy of interest rates as that decision is made for me by the powers that be, that gives me the right to an opinion. I am entitled to an opinion on anything that affects me and interest rates do. They did when I had a mortgage and they do with regards to my savings. There is no benefit to you or me (unless we look purely at interest on savings) to HIGH interest rates! it costs you and me more money. Please tell me how it is better for Joe public to have higher interest rates. If my opinion is wrong, teach me how it is wrong then I will understand how me paying more (higher interest rates) for a mortgage (if I had one) more for a car loan (if I had one) and more for a general loan (if I needed one) benefits me (and the same for Joe public)

ILW

suburbanwifey wrote: »

As an individual Brit who is at the mercy of interest rates as that decision is made for me by the powers that be, that gives me the right to an opinion. I am entitled to an opinion on anything that affects me and interest rates do. They did when I had a mortgage and they do with regards to my savings. There is no benefit to you or me (unless we look purely at interest on savings) to HIGH interest rates! it costs you and me more money. Please tell me how it is better for Joe public to have higher interest rates. If my opinion is wrong, teach me how it is wrong then I will understand how me paying more (higher interest rates) for a mortgage (if I had one) more for a car loan (if I had one) and more for a general loan (if I needed one) benefits Joe public?

Simple really, if rates had been higher in the recent past, housing costs would now be lower, there would be less debt in the country, more people would be able to support themselves through temporary misfortunes.
Maybe the problem is that I am taking a longer term view than next week and truly believe that people should strive to hold an amount of savings to allow them to support themslelves. Low IRs positively encourage the opposite.

Pimperne1

Interesting from Mervyn though.