Monday, Nov 26, 2007
Families are stretched to the limit of their borrowing capacity
The Telegraph: Average Briton is now £33,000 in debt
"After many years of rapid growth the consumer credit market has well and truly stalled. We believe that consumer credit borrowing levels have reached a natural ceiling."
The Council of Mortgage Lenders also warned recently that the number of homes repossessed during 2008 looked likely to reach levels last seen during the 1990s house price crash.
Posted by sold 2 rent 1 @ 06:06 AM (584 views) Add Comment
7 Comments
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1. sold 2 rent 1 said...
This HPC was never about huge IRs like the 1990s. It has always been about DEBT and the natural debt limit.
The debt levels that last peaked in the early 1930s and bottomed in the early 1950s are nearly at their "natural" peak again. As LESS new loans are made and OLD loans default the money supply will contract.
If prices of food, energy and other necessities keep going up and the money supply contracts, the sales and prices of all other goods must collapse.
This may sound controversial but housing in the UK for most people is a relative luxury. The physical roof over your head is a necessity but the 3 bed semi for the 2+2 family is a relative luxury. Think about how the poorest people on the planet have to live with 10 in a single room.
You can always live in a smaller house but you cannot cut out food and energy.
If, as I believe, there is going to a more even distribution of wealth across the world, we are in for a very tough time in the next decade.
2. tyrellcorporation said...
In an interview recorded during his visit to Uganda for the Commonwealth summit the Prime Minister, Gordon Brown, said he blamed the current mood of economic uncertainty at the door of events in the United States sub-prime market.
He said: "I think everybody knows that what has happened in America. It is already having an effect on the housing market and the question is what will be the effect on the rest of the world."
Oh look it's someone else's fault and not actually my fault at all! Effing spineless politicians, it makes me sick to the core that this idiot is trying to wash his hands the gross economic mismanagement of the last decade. When the good times were rolling we should have been building a war-chest but the fact is that the cupboard is bare! This downturn is gonna be very painful as a result. Prudent my ar*e! Falling tax receipts and increasing benefit payments - our very own home grown credit crunch!
3. Planning4acrash said...
Yes, a visit to Uganda will be a useful exercise for Brown in discovering how to survive and be frugal in poverty!
4. Notbuying said...
Yep, I seem to recall that GORDON BROWN WAS IN CHARGE OF INTEREST RATES FROM 1997 - 2006.
OK, so he "handed it over" to the MPC, but was it not himself who actually appointed MPC members?
Mmmm.
Not really hand over, just a proxy to take the flak. Clever.
And he would be an idiot if he appointed people who were not willing to implement his own policies, ie : the lowest interest rates possible. and the fact is, the credit crunch would never have happened if rates had not been reduced to levels where even the chronically financially illiterate could sign a loan document handing them £200,000 on a plate just because they claimed to earn enough to pay it off (even if it was only at 3.5%).
Blame yourself first for being such an idiot to believe this was sustainable (everyone else was doing it, so what? Are you a lemming? Hellooooo !!), then blame Brown for creating the conditions to allow it to happen and the banks for slackening their controls to permit you to lie for that sort of sized loan whilst they turned a blind eye. You're all in this together, sort it out and hurt together!
5. Notbuying said...
"this idiot is trying to wash his hands of the gross economic mismanagement of the last decade"
Maybe we should refer to him as Lady Macbeth from now on.
Leading character in the Scottish play..... :-)
6. uncle chris said...
It would be interesting to know how many of the UK population (like me) are fortunate enough (or prudent enough) to hold no debt at all. Better still would be a histogram (bar chart) of debt held by individuals. Anyone know of any such available data? Half the problem, I suspect, is that the usual 'debt junkie' suspects have multiple loans with multiple institutions.
7. confused76 said...
"This HPC was never about huge IRs like the 1990s. It has always been about DEBT and the natural debt limit."
well said!
We have touched SUPERNATURAL debt limits