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needsleep

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Everything posted by needsleep

  1. We owe most of it to 'ourselves', about 80%. When I say 'ourselves' I mean British banks, insurance companies, pension funds, individual investors (NS&I), gilts recently purchased by the BoE under APS etc... The other 20% is owed to foreign banks and insitutions. Osborne doesn't want you to know that. Nor does he want you to know that our debt is structured in a remarkably low-yielding, long-term way. I mean it wouldn't make us like Greece or Portugal would it.
  2. It's quite possible you are right. At present. The truth is we've barely scratched the surface of the wound. We still have a housing bubble that hasn't burst. Interest rates that are artificially low. Food and fuel are still just about affordable for most. It isn't going to stay that way.
  3. So you don't think it is possible that people based spending commitments on how well they expected their investments to perform? Seems perfectly reasonable to me. I never said it was proof though
  4. Pointless. Spending in the present is driven by financial decisions and commitments made in the past That in itself probably explains where much of the disposable income of the families in the mail article is going
  5. Doing ok in the middle ground. Perhaps an illusion made possible by easy credit?
  6. Disingenious. What was the % of IO mortgages over the past 8 years? What was the percentage of self-certs? If you are arguing that most people have been living within their means then surely we don't have a problem. House prices would be at or near the correct level. Personal debt would not be an issue. Somebody, somewhere must have been availing of the credit massive amount of credit available but if you're right maybe we should all stop worrying. We could afford it after all
  7. Truth is we don't really know. I'm betting ultimately it won't be melodramatic at all, not when you look at the incidence of IO mortgages in the last 8 years. And that is only one thing we can measure. We don't know the true extent of MEW-ing, credit card debt etc... IMO those that have actually lived within their means will be a significant minority, not the other way round.
  8. Know what you're saying but I don't buy the idea that every family that lived a a recklessly believed the state would rescue them. I think the 'middle class' wannabes genuinely thought they had made it and attained a lifestyle that would never end. With no second thought as to how that lifestyle was made possible and what the possible outcome could be for them and their kids. They did it because they thought it was what they were expected to do. Not many stepped back and really thought about what was going off. Thankfully I'm one who did.
  9. Totally rational. And why not do that? In fact after the kids are born living within your means becomes even more important. It's the last time to be living the lifestyle you think you deserve rather than the one you can actually afford. Once you have kids living in a way that risks their future is morally indefensable IMO. Kids won't notice if they are living surrounded by the latest designer furniture and being transported in a nice car, well not until they hit their teens anyway. the best thing you can give them is a stable, loving home and part of that is financial security. Sorry that's not a rant at you Saberu.
  10. There is nothing that difficult to understand. Natural cyclical upswing coupled with mildly above trend interest rates (not enough to seriously discourage invrstment). Mix in some well targeted cuts and some well targeted fiscal stimulus (not the short-run quick fixes of lots of fixed- contract civil service jobs but serious infrastructure investment) and in theory you may come out of it with a greater overall debt but maybe a bigger economy too to offset it. And perhaps an economy better positioned to, ahem, deal with the debt.
  11. It hasn't crashed yet so what exactly is it recovering from* * can't be arsed to read the article
  12. Not a bubble yet though but PMs are the next bubble alright. The system can't function without bubbles. Silver is the one IMO.
  13. Similar situation here. Don't think we could do 80% but we could survive a 2/3 cut in income and still live well. I really struggle with the mindset that £2k of disposable income (as in idiots in the Mail) isn't enough. It really does beggar belief. What are the charlie prices these days?
  14. You didn't read my post above about winding out the jobs created during fiscal stimulus. I agree they absolutely have to go. They were never long term anyway - many were short tem contracts paying quite poor wages. I wouldn't be surprised if many of them have already gone.
  15. Thanks for proving the point. It isn't 12%+ is it. Although we do risk going there with Osborne's plans. Labour cuts? Protect essential frontline services. Wind out the jobs created during fiscal stimulus, many of which were short-term fixed contract roles anyway the contracts for which will not be renewed (hundreds of thousands of those), efficiency savings within departments, consolidation/merging of departments. All this was being planned anyway before the general election. What I am really puzzled about is ring fencing of certain budgets, like overseas aid and the NHS. Nominating sacred cows is a huge mistake - there are cuts to be made everywhere. And I'd have gone with a more clear and positive unifying idea - people don't understand the Big Society but they do understand the mantra of delivering growth. Osborne and Cameron have given us a vision of misery and DIY services. I think the overall negativity will make many cuts undeliverable and actually, perversely, Labour may have ultimately succeeded in cutting more.
  16. Labour's plans involved cuts of £14bn this year - see my signature. The figure is straight from that embarrassing Baroness Warsi. Tories are accelerating spending anyway. And that will gather pace as they increase overall benefit spend and suffer from reduced tax receipts. So I don't get your point at all. The acid test for public spending is not does it make more than it costs. That is a stupid view to take. How can a burns unit, something that the private sector would be very unlikely to provide, not be provided because it doesn't make a profit? FFS
  17. You misunderstand. I'm not saying we need to accelerate our spending. Quite the opposite. Cuts are needed. It's the way they are being done that I've got a problem with. Osborne needs to make his mind up whether he's doing it to please the markets or to genuinely restructure. If it's the former then he's on a fools errand which seems to involve indiscriminate badly thought out cuts that are not joined up across departments and are actually fiscally and structurally damaging. If it's the latter then there is no evience for genuine growth policies beyond what a 6th former could dream up in a A level economics exam. And it isn't 12%+
  18. The risk is a deflating or at best flatlining economy and a downward spiral of repeated austerity plans ultimately resulting in a bailout. There's more evidence to support my view than there is to support the idea that austerity will bring us out of trouble. It clearly isn't working so far and we haven't even really begun. Osborne has dropped us in the shit. You'll completely understand this in a few months.
  19. You need to get your facts straight. He resigned because he could not get the FOURTH austerity package in 14 months through parliament. This is what people seem to be conveniently or deliberately forgetting. The likes of Ireland and Portugal implemented austerity plans well before any bailouts. Portugal had approved plans in 2010 to take their deficit from 9% to 4% in a year using spending cuts, tax hikes, a 5 per cent reduction in public sector wages and a 2 per cent increase in VAT. Sound familiar? The recent failure to push a further austerity package through was on top of that. The fact is that where austerity has been tried it has failed. Osborne tells us that his plans are to avoid the same problems as the Portugese and the Irish whilse at the same time following the exact policies those countries have followed. He's got you stitched up like a kipper, or maybe a sardine.
  20. My finances could withstand 30% interest rates. Easily. So don't worry about me 'Greek/Portugese/Brown/Balls approach' - sorry but you're really, really confused there. I won't even try to imagine what is going on in your head. You do know that Portugal has implemented three austerity plans in the last 14 months. Don't you? Greece has implemented austerity plans too. Ireland as well. Yep, the only other countries that have trodden the austerity path are totally in the poop.
  21. I think it's their austerity plan that creates massive risk TBH. It's an experimental gamble. Never successfully done before in an economy this size. Enough people a hell of a lot more qualified than Brown have warned against it and I guess the last thing Cameron wants is a knock at the door from an IMF team led by Brown saying 'told you so' That said if there is a real chance that the IMF could be needed then it wouldn't be right for the previous PM to be coming in as leader of the IMF to sort out the mess anyway. That would be completely wrong and I'm struggling to understand why Brown would even want to be put in that position given his massive unpopularity in the UK. Really he should be laying low and thanking his lucky stars he still has a wonderful job.
  22. Haven't read the whole thread so forgive me if mentioned already. Weren't we being told that we were at risk of the contagion spreading from Greece etc... to the Uk. If you believed Osborne etc... weren't the IMF hammering on the door already. Of course that was palpable nonsense but the real issue is that we are still on a fiscal kamikaze mission (albeit a slightly different one) and it wouldn't be too sweet for the Tories when the IMF eventually do arrive and with Gordo at the helm.
  23. Not true. Gold and silver are assets that we expect within the current system could be exchanged for fiat money. They are not universally accepted as money for everyday transactions at the moment. The beauty is that should the currency collapse then gold and silver probably would be accepted for everyday transactions - exactly what has happened in Zimbabwe.
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