Campaign for debt free money, stable house prices, pension still worth something...

GeorgeHowell

If ever there was a good advertisement for proper financial education in schools, this thread is it. The degree of ignorance in some quarters as to what goes on and how things really work is nothing short of frightening.

Thrugelmir

Mike4DebtFreeMoney wrote: »

Are you of the opinion that politicians do not get to decide where public funds are spent today? Steering clear of the mention of QUANGOs, who do you think decides?

What qualifications do politicians of the current generation hold to manage public finances efficiently? Majority are career ones. So have little to no expertise to speak of except that in politics. Which comes to the fore over and over again. This then reasonates throughout public sector bodies. All too cosy with very little public accountability. Tide is turning. But very much in its infancy.

ging84

So the OP is after there being bank accounts which bury the saver's money in a hole in the ground where it is safe, but earns no interest.
That is such a moronic attitude even the bible says it's a bad idea

tomterm8

Thrugelmir wrote: »

What qualifications do politicians of the current generation hold to manage public finances efficiently? .

I really don't think British politicians have ever been qualified to run the local pub, let alone britain. That's what Sir Humphrey is for. British politicians are there to give everyone an illusion of democracy.

Thrugelmir

tomterm8 wrote: »

I really don't think British politicians have ever been qualified to run the local pub, let alone britain.

MP's once upon a time had careers before entering Parliament. So at least represented a cross section of trades and professions.

Mike4DebtFreeMoney

Thrugelmir wrote: »

MP's once upon a time had careers before entering Parliament. So at least represented a cross section of trades and professions.

Agree. I didn't say Parliament was well qualified to decide where tax income goes, but it is what happens currently. However they don't get to decide where the vast majority of new money goes: unaccountable bankers do. They push it into the safest/most profitable asset for them, which has been housing and some financial instruments.

If you don't like the term 'sad' then how about 'preferred to protect their balance sheets rather than extend credit even to existing and profitable businesses'. The point stands: the amount of currency depends upon the collective mood of bank managers, not Parliament, not the BoE. The graph shows this in effect. In spite of massive increase in central bank reserves (red blip from 2008) the total amount of money contracted (green dip of same period).

Masomnia

Mike4DebtFreeMoney wrote: »

Agree. I didn't say Parliament was well qualified to decide where tax income goes, but it is what happens currently. However they don't get to decide where the vast majority of new money goes: unaccountable bankers do. They push it into the safest/most profitable asset for them, which has been housing and some financial instruments.

If you don't like the term 'sad' then how about 'preferred to protect their balance sheets rather than extend credit even to existing and profitable businesses'. The point stands: the amount of currency depends upon the collective mood of bank managers, not Parliament, not the BoE. The graph shows this in effect. In spite of massive increase in central bank reserves (red blip from 2008) the total amount of money contracted (green dip of same period).

Bank lending isn't one sided though, is it? People borrowing money decide where it goes. I don't see how that's any less democratic than giving more power to politicians to allocate money to their pet projects; if anything I think the system we have is more democratic.

Thrugelmir

There's plenty of available credit lines for profitable businesses through normal banking channels. Another political myth. Banks aren't in the market to supply risk capital either.

Banks need to lend responsibly. To suggest otherwise takes us back to the 2003-2008 era. When the lunatics were allowed to run free.

The UK has an infatuation with debt. That's an issue that has yet to be addressed. As could be an achilles heel in the future.

Mike4DebtFreeMoney

Both reasonable points, both not my personal experience. On the subject of democracy, individuals can't decide how much to fund the NHS or whether we should have an Army. Taxpayers money was made available at 0.75% to banks, who then loaned it back at 3% to taxpayers. Banking is not an efficient market open to democratic forces.

On 'plenty of available credit lines' I think there are many business and many ex-businesses who would disagree, including myself from personal experience, even where no credit was requested, just banking facilities. What is your distinction between 'credit lines... through banking channels' and banks not 'in the market to supply risk capital'?

Do you see a connection between the vast majority of money only available as debt, the inflation of 'people need somewhere to live' housing with that debt, the money supply dominated by profit seeking enterprises that make money off debt, and people being in debt? Money does not have to work this way. That's the target of my e-petition, hence my logon ID.
http://epetitions.direct.gov.uk/petitions/64050

N1AK

GeorgeHowell wrote: »

If ever there was a good advertisement for proper financial education in schools, this thread is it. The degree of ignorance in some quarters as to what goes on and how things really work is nothing short of frightening.

It is amazing how people are so quick to jump to the conclusion that as they don't understand it then it must be either a) Simple or b) black magic and inherently evil.

Obviously heavily leveraging money comes with some risk and the government should regulate to ensure those risks aren't born by the general public or savers who haven't been warned of those risks. However, claiming the entire concept should be abandoned is wrong and if adopted would cause far more harm than the largely imaginary harm caused the the current system.

Ultimately the scenario isn't very different to what happens with airline seats. Seats are oversold because invariable some passengers don't turn up. By overselling the cost per ticket is lower so the airline can offer better prices. In the small number of cases where more passengers turn up than their are seats the airline will offer upgrades, pay people to delay to other flights etc. The difference with bank accounts is that instead of 1-2% of seats not being needed, 90-95% of deposits aren't needed at any time. By lending that money out (and borrowing to cover high demand for withdrawals) the account holder (and society) can far better utilisation of the money.