Smith Posted February 16, 2009 Share Posted February 16, 2009 Some might believe that calling someone's opinion stupid and then refusing to discuss the matter further would be the actions of an ignorant coward. And usually I would agree with you. But we have to draw the line somewhere, right? Lol. Quote Link to comment Share on other sites More sharing options...
Garry AKA Pod Posted February 16, 2009 Share Posted February 16, 2009 Is the OP suggesting that we should all stop saving then? If the government keep handling this farce the way they are doing, then the whole concept of "saving for your retirement" will die a nasty death. Quote Link to comment Share on other sites More sharing options...
NMBAB Posted February 16, 2009 Share Posted February 16, 2009 No one has provided any reasoning as to why rates should be higher right now. How about this for a possible reason why rates should be higher The basic idea is cut base rates by n basis points and you hand back n basis point times outstanding mortgage pool into the pockets of hard working families so they can race down to the shops and save us all. In my mind without thinking too hard about it at least three factors spring into my small brain that undermine this cunning plan; 1. The reality that the vast majority of the outstanding mortgage pool will not see all or even any of the n basis point reduction (in fact some Mortgage rates appear to be heading back up) 2. Those who actually find their mortgage rates being reduced and go off message by using the extra money to reduce their outstanding debt 3. The effect of the base rate cuts on savers. Found this back of a fag packet analysis of the NET effect of base rate cuts in NZ http://www.interest.co.nz/ratesblog/index.php/2009/02/04/analysis-why-the-ocr-cuts-are-taking-soooo-long-to-be-felt/ My understanding is as follows; Mortgage Interest Reduction = Outstanding Mortgage Pool * Weighted Reduction in Mortgage Interest Rates (Passed on in full to all those who owned a goat named Gerald, as for the rest …..) Saving Interest Reduction = Savings Pool and * Weighted Reduction in Savings Interest Rates (Pretty much 100% base rate change passed on in full at the speed of light) Net Effect = Mortgage Interest Reduction – Savings Interest Reduction From the NZ article their analysis shows Net Effect = great big negative number, in other words rather than increasing the amount of money available for consumer spending it has drastically reduced it. Anyone have the brains and data sources to be able to do the same for the UK? No question in my mind it would make NZ’s great big negative number look like pocket change. Chalk up another outstanding victory for the ministry of unintended consequences. Quote Link to comment Share on other sites More sharing options...
SarahBell Posted February 16, 2009 Share Posted February 16, 2009 Is the OP suggesting that we should all stop saving then? If the government keep handling this farce the way they are doing, then the whole concept of "saving for your retirement" will die a nasty death. I think they are promoting the screw savers just too much - without people trying to be responsible for themselves it'll increase the burden on the benefits system. The more savers get done over the less people will bother saving in the future. The government will be hoist by it's own petard... (I think thats the phrase) Quote Link to comment Share on other sites More sharing options...
leveller Posted February 16, 2009 Share Posted February 16, 2009 yet another poster belittleing the OP. Are you all a bit simple? No one has provided any reasoning as to why rates should be higher right now. Should they have been higher in 2005? YES OF COURSE. Should they be zero or close to zero right now? YES OF COURSE. Do I have a VI in low rates? YES OF COURSE (but at least i admit it and can still look at the bigger picture) want higher rates then take some risk. There are loads of options. stop looking to the nanny state and expecting them to help you out. Looking at the bigger picture? 50inch plasma, maybe, but that's it. Quote Link to comment Share on other sites More sharing options...
Injin Posted February 16, 2009 Share Posted February 16, 2009 Is the OP suggesting that we should all stop saving then? If the government keep handling this farce the way they are doing, then the whole concept of "saving for your retirement" will die a nasty death. You should stop saving in stuff that gives power to people who will ****** you over. Quote Link to comment Share on other sites More sharing options...
Nicolaj Posted February 16, 2009 Share Posted February 16, 2009 The shadow governments of the world are doing everything in its power to create a totaly dependant state/world...it doesn't want savers or homeowners or free thought besides their own. They want and will have total control of every aspect of our lives for a short time... We are sheep being lead to the slaughter... Quote Link to comment Share on other sites More sharing options...
leveller Posted February 16, 2009 Share Posted February 16, 2009 You should stop saving in stuff that gives power to people who will ****** you over. Are you saying stop saving in banks, or stop saving in cash? Quote Link to comment Share on other sites More sharing options...
sleepwello'nights Posted February 16, 2009 Share Posted February 16, 2009 My understanding is as follows;Mortgage Interest Reduction = Outstanding Mortgage Pool * Weighted Reduction in Mortgage Interest Rates (Passed on in full to all those who owned a goat named Gerald, as for the rest …..) Saving Interest Reduction = Savings Pool and * Weighted Reduction in Savings Interest Rates (Pretty much 100% base rate change passed on in full at the speed of light) Net Effect = Mortgage Interest Reduction – Savings Interest Reduction From the NZ article their analysis shows Net Effect = great big negative number, in other words rather than increasing the amount of money available for consumer spending it has drastically reduced it. Anyone have the brains and data sources to be able to do the same for the UK? No question in my mind it would make NZ’s great big negative number look like pocket change. Chalk up another outstanding victory for the ministry of unintended consequences. But what does money really represent. If it's not used what's the point. If we all saved and put the money we saved under the mattress, apart from a lumpy mattress and lack of sleep plus worrying about the money being stolen what use would it be. Money has to be used. It's the velocity of its use that drives the economic activity we all benefit from. Part of the problem now is not just the loss of wealth through the reduction in asset values but also that the remaining lenders are hoarding. If interest rates increased would the bankers lend more or would they curtail lending because of the increased risk that borrowers might be unable to repay. Also you refer to consumer spending only. Does your analysis draw any conclusions of the effect on business spending? It's a complex problem without a simple solution. Quote Link to comment Share on other sites More sharing options...
Injin Posted February 16, 2009 Share Posted February 16, 2009 Are you saying stop saving in banks, or stop saving in cash? Both. Quote Link to comment Share on other sites More sharing options...
leveller Posted February 16, 2009 Share Posted February 16, 2009 Both. Fair enough. But what do I then use in exchange for a house? Quote Link to comment Share on other sites More sharing options...
R K Posted February 16, 2009 Share Posted February 16, 2009 stop looking to the nanny state and expecting them to help you out. The irony Quote Link to comment Share on other sites More sharing options...
Garry AKA Pod Posted February 16, 2009 Share Posted February 16, 2009 Are you saying stop saving in banks, or stop saving in cash? He's suggesting that shiny stuff that if moulded into a cube, the entire amount ever mined would only create a cube smaller than the size of a tennis court. (Clearly a tennis court is not cubed shaped) Just not a practical solution for 99% of the worlds population. Quote Link to comment Share on other sites More sharing options...
Injin Posted February 16, 2009 Share Posted February 16, 2009 Fair enough. But what do I then use in exchange for a house? You can't buy one. The state already owns them all. So why kid yourself? Quote Link to comment Share on other sites More sharing options...
Injin Posted February 16, 2009 Share Posted February 16, 2009 He's suggesting that shiny stuff that if moulded into a cube, the entire amount ever mined would only create a cube smaller than the size of a tennis court. (Clearly a tennis court is not cubed shaped)Just not a practical solution for 99% of the worlds population. I am not a goldbug. Quote Link to comment Share on other sites More sharing options...
Guest pioneer31 Posted February 16, 2009 Share Posted February 16, 2009 You are trying to stir $shit or are a freaking idiot. both? I don't believe the loser has a job either. probably a typical labour "I 've got nothing so I want everyone else to have nothing" kind of a tosspot. Quote Link to comment Share on other sites More sharing options...
contractor Posted February 16, 2009 Share Posted February 16, 2009 stop looking to the nanny state and expecting them to help you out. what with low interest rates and the like? Quote Link to comment Share on other sites More sharing options...
Tummybanana Posted February 16, 2009 Share Posted February 16, 2009 I wrote a BRILLIANT post about this a couple of months ago, but I can't find it now. It had links and everything. Basically, although there are more savers than borrowers; most savers are also borrowers, and assuming that the banks do what they're told and pass on fixed rate interest cuts would much rather have lower interest rates. Only about 10% of savers have Savings over two months' salary, and 70% of housing still has an outstanding mortgae on it. It's not hard to see that, in the short-sighted terms of an individual's pocket, lower interest rates are a much better vote winner than high ones. Of course, there are consequences as regards the propserity of companies, pension returns and other things, but for most people, it's only their own savings and debts that they care about. Quote Link to comment Share on other sites More sharing options...
piece of paper Posted February 16, 2009 Share Posted February 16, 2009 Fair enough. But what do I then use in exchange for a house? Not sure about you but I doubt whether the young lady in your avatar will need to sleep under the stars except through choice. p-o-p Quote Link to comment Share on other sites More sharing options...
Garry AKA Pod Posted February 16, 2009 Share Posted February 16, 2009 I am not a goldbug. platbug? What alternative do you suggest then? An alternative that would work on Planet Earth, not the Utopian planet Injin. Quote Link to comment Share on other sites More sharing options...
andikay Posted February 16, 2009 Share Posted February 16, 2009 QUOTE (cabbagepatchkid @ Feb 16 2009, 11:05 AM) No one has provided any reasoning as to why rates should be higher right now. The reason our government think we need low rates in my opinion are, We have had a good global economy for many years peoples personal wealth as appeared to be very good, this was mainly based on ever growing house prices which rose as a result of lax lending. The growth of the world’s economy was based on dept. As people started to default on the dept they could never afford the economy of the world inevitably started to collapse, this cycle will continue it’s down word trend as more people lose their jobs and default on their depts. This answer as far as our leaders are concerned is to make dept cheaper allowing more people to borrow more money in the hope this increases consumption. The problem with this is if our economy grew because of dept and they are using dept in a vain attempt to keep it growing, eventually it as now where to go but down. Governments are very short sighted and only seem to look forward as far as the next election. Interest rates need to rise this will cut debt and consumption, it will be painful getting back to a sustainable position where people save for what they want but can afford what they need. Quote Link to comment Share on other sites More sharing options...
Johnny Storm Posted February 16, 2009 Share Posted February 16, 2009 Is the OP suggesting that we should all stop saving then? If the government keep handling this farce the way they are doing, then the whole concept of "saving for your retirement" will die a nasty death. I think a lot of people have stopped. Which is going to be a massive problem for the welfare state in years to come, along with increasing life spans. Quote Link to comment Share on other sites More sharing options...
Injin Posted February 16, 2009 Share Posted February 16, 2009 platbug? What alternative do you suggest then? An alternative that would work on Planet Earth, not the Utopian planet Injin. Friends, family, shares in stuff you know about, your own knowledge, health and well being. Metals are fine but they are no substitute for a healthy body in which to house a healthy mind. Once you've go tthat sort of base to work from and can maintain, spend the rest fo your life posting on internet forums inbetween packets of crisps. Quote Link to comment Share on other sites More sharing options...
Garry AKA Pod Posted February 16, 2009 Share Posted February 16, 2009 Friends, family, shares in stuff you know about, your own knowledge, health and well being. Metals are fine but they are no substitute for a healthy body in which to house a healthy mind. Once you've go tthat sort of base to work from and can maintain, spend the rest fo your life posting on internet forums inbetween packets of crisps. Shares? That's fine and dandy, but they too revolve around fiat do they not? You can only buy and sell shares using money if I'm not mistaken. Thinking of putting a few quid in to Walkers and Seabrooks though. Quote Link to comment Share on other sites More sharing options...
what house price drops? Posted February 16, 2009 Share Posted February 16, 2009 [ I`m not whinging, and just a bit angry. If you want to get angry listen to this one. I know a couple who have never worked and have no intention of ever doing so. They get benefits galore and recently bought there council house with a huge discount. WE pay the fecking mortgage!!!.To top it all they got a grant to fit a new kitchen,central heating and windows. There are thousands like this living a paracitic life style doing feck all with there bad backs ect. And who gets shafted,the honest workres who pay for all these bone idle gits. Quote Link to comment Share on other sites More sharing options...
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