Hypno's cheaper than therapy debt diary.

ZTD

Karmacat wrote: »

According to the research I've read, they actually don't! Like right now, the bank is being encouraged to cut interest rates to help stimulate things back to where they were.

This is part of the teachings of John Maynard Keynes. Basically what he said was that injecting money (strictly currency) into an economy always stimulates it, and you don't actually need to save anything - savings are bad, because it means people aren't buying stuff, so other people aren't employed making it.

Karmacat wrote: »

Of course, I'm old enough to remember "stagflation" - when we were in a recession and interest rates *were* skyhigh. Awful, it felt like there was no way out of it for years and years.

In Keynesian economics, unemployment means that the economy is too cold, and inflation means that it's too hot. With stagflation, when you have both at once - his explanations just can't cope. The economy is both too cold and simultaneously overheated.

Interest rates were high - but they were always less than the inflation rate. Which was why the inflation rate was sky high too. It was only when the US Fed chairman - Paul Volker - pushed interest rates to *higher* than the inflation rate in the early 80s, that things started to calm down.

Interest rates are lower than the inflation rate right now - the Government has just become more adept at lying about what the inflation rate is.

ZTD

Karmacat wrote: »

Awwww, Duchy! Can't bear to use the dodgy hug, so this one will have to do..... :kisses3:

I'll give you all one instead. :grouphug:

Yorkielass

wow very philosophical talk for so early in the morning!

Pania I can agree with what you're saying completely - we bought our house 15 months ago and it's a new build and over the last couple of months for sale and to let signs have been popping up left right and centre even houses where people moved in after us - people certainly seemed to have over stretched themselves and now nobody wants to buy their houses. We're just thankful that we were very careful and didn't overstretch ourselves and that I had a slightly better job now and hopefully come the autumn OH will too and we're happy to stay where we are but it does make you think every time we come home/go out.

Hope your busy day was ok Hypno - need to get moving with my Olympic Challenge stuff - ebay here I come tonight and if I don't feel like doing it I'll think of you in college and that'll make me get a move on!

Sea78

Wow - slight brain hurt here about the whole market changes/how it affects us in debt etc.

Hope you have a wonderful and productive day Hypno - I'm guessing you won't be on here til late if you've got college tonight too.

Sea xxx

Karmacat

Yup, poor hypno coming back here to all this, after such a long day at college!

Anyway, thanks for the hug-for-all, ZTD! Hypno foremost, of course, from us all!

taxi73

Afternoon everyone...very heavy conversation today...wow...yorkielass has hit the nail on the head!!!...people overstretching themselves getting onto the housing ladder and then having to have every piece of furniture on credit...
The thought of a recession occured to me about 18 months ago and is the main reason to me getting my backside into gear and trying to get rid of these debts and my mortgage as it'll be a lot easier to ride the storm with less debt ...or so I hope...our business is down at the moment but I don't know if it's the normal after christmas drop or whether it's something bigger though DH took decent money last night so it could just be normal but everything is so worrying as if life isn't hard enough.
Will have to see how it all pans out

Miss_Bez

W....w....where is everyone (big watery eyes, small mouth)?

taxi73

Hypnos at college tonight

duchy

I'm in hiding-any mention of JMK does that to me-I'm still traumatized from when my history prof snuck Keynes and economics into my history degree .
I accept all hugs dodgy or otherwise.

ZTD

duchy wrote: »

I'm in hiding-any mention of JMK does that to me-I'm still traumatized from when my history prof snuck Keynes and economics into my history degree .
I accept all hugs dodgy or otherwise.

Be thankful - I did a Maths and Computer Science degree, and ended up having to do Economics and Economic History... :eek:

Maths...Computer Science...History. Spot the odd one out...