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A Debt Jubilee - Just Wipe The Slate Clean- Merged

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Guest DissipatedYouthIsValuable

That's fine, as long as they'll also relinquish any assets secured on that debt, and let the assets be auctioned openly and immediately.

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That's fine, as long as they'll also relinquish any assets secured on that debt, and let the assets be auctioned openly and immediately.

and then shot?

Actually, I'd settle for this, if they were blacklisted from credit forever.

Edited by twatmangle

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Debt... someone is a borrower someone is a lender, and through the wonders of fractional reserve your probably lending to yourself 9x over. If you wipe the debt clean the effects are similar to bankrupting a bank, all the debt unwinds and you get very poor. It would be safer, and much less deflationary to print all the extra money you need, rather than destroying the debt (and peoples savings) associated with it.

Edited by moosetea

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The mandatory recapitalisation would be first through new equity issuance in the market, then though mandatory debt-to-equity conversion and similar haircuts for unsecured bank creditors, and last through increased government equity stakes. All these capital injections should take the form of tangible common equity. Anything else would be cosmetic.

Anyone still think bank equity is a good idea 'for the long term'?

Thought not.

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That's fine, as long as they'll also relinquish any assets secured on that debt, and let the assets be auctioned openly and immediately.

Isnt half the idea to enable prices to be kept artificially high though?

While they might be mad enough to write off the debt, i doubt they would allow any claim on the underlying assets.

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Do you get the feeling this is the plan and that's why govt's are busy racking up huge debts?

Having one last hurrah at keeping the system going, if it fails we just wipe off the debt as no one has got the money and start again.

Why not wipe a % off everyone's debt? For those over indebted alter there repayment so they have to pay more off?

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Anyone still think bank equity is a good idea 'for the long term'?

Thought not.

:lol:

All he wants to do is get back to 2007 - "the way things were."

The ptb and the banksters can get us all in debt to our eyeballs and then every time their lunatic FRB/fiat regime inevitably breaks they can "forgive" us, so we can all start again begging them for access to the basics of life.

Heres a suggestion - get to ****** you evil ****!

Edited by Injin

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I'm all for it if I can have advanced notice so I can load up on few hundred thousand beforehand.

I think you just got it.

Debt... someone is a borrower someone is a lender, and through the wonders of fractional reserve your probably lending to yourself 9x over. If you wipe the debt clean the effects are similar to bankrupting a bank, all the debt unwinds and you get very poor. It would be safer, and much less deflationary to print all the extra money you need, rather than destroying the debt (and peoples savings) associated with it.

I think the idea is that the borrowers get a free house, the banks get a capital injection, and we get a bit of prison love. Anyway, I see this idea has made it to the Telegraph. Ambrose obviously got a tip off. It does rather look as if they are actually floating this to get an idea of public mood. :ph34r:

http://www.telegraph.co.uk/finance/comment...nly-answer.html

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Your only protection from these fools is to put your money into solid assets - oil, gold, steel, copper etc etc.

I should add that this is precisely what China et al are doing.

Edited by Errol

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:lol:

All he wants to do is get back to 2007 - "the way things were."

The ptb and the banksters can get us all in debt to our eyeballs and then every time their lunatic FRB/fiat regime inevitably breaks they can "forgive" us, so we can all start again begging them for access to the basics of life.

Heres a suggestion - get to ****** you evil ****!

Yep. GS went a little bit too far this time.

There are no suckers left so the only thing they can come up with is to re-use the old ones.

The monster needs feeding.

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Do you get the feeling this is the plan and that's why govt's are busy racking up huge debts?

Having one last hurrah at keeping the system going, if it fails we just wipe off the debt as no one has got the money and start again.

Why not wipe a % off everyone's debt? For those over indebted alter there repayment so they have to pay more off?

I'm sure our international creditors will be more than happy to bend over.

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I don't know what scares me more, the fact that this is being discussed at all, or that I can actually believe that Gordo might do it.

I'd imagine that at some point just before the election, when it's obvious that Labour are going to be wiped out, this fabulous new policy would be announced, along with a warning that "if you vote Tory, you'll have to repay your debts".

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Oh dear bear of little brain finds it so hard to keep up and is forever showing herself up for the bear of little brain she is but can someone please explain the difference between "liquidity" and "capital".

Today, liquidity is ample, even excessive. Capital is scarce. Capital is scarce first and foremost in the banking sector. A panoply of central bank and government financial interventions and support measures have ensured, at least for the time being, the survival of most of the remaining crossborder banks. It has not done enough to get them lending again on any scale to the household and non-financial enterprise sector....................

...........The banking system in the north-Atlantic region is not facing a liquidity shortage - it has got liquidity coming out of its ears. It is facing a capital shortage. Much of it still totters on the edge of insolvency. Recapitalising banks slowly through large spreads on low business volumes and through quasi-fiscal subsidies extended by the central banks in their financial support operations will take years - years of impaired intermediation and abysmally restricted external finance for households and non-financial corporations.

Is "liquidity" the money you have or potential reserves you have to balance the books where "capital" is what you need in order to lend and or expand? So in a nutshell is the article saying that unless someone gives the banks a LOT MORE money in order to lend and cancels all debt property prices will fall, unemployment rise and we will all be living more frugally for a long time to come?

Is this the same reason the IMF said that banks should be nationalised?

http://www.telegraph.co.uk/finance/economi...d-says-IMF.html

More banks may have to be nationalised, says IMF

Alistair Darling must stand ready to pump more capital into Britain's beleaguered banks, perhaps nationalising other high street names, the International Monetary Fund has warned.

The Fund believes that although the drastic measures to prop up Royal Bank of Scotland, Lloyds Banking Group and other major lenders had prevented them from collapse, more public money needs to be poured in if the economy is to get back to full strength. The alternative is a "zombie" recovery as banks continue to withhold lending for years, the IMF has told the Treasury.

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as one of the comments on this piece said - it should be 'unsecured debts ' of the poor with no assets that would be cancelled - also known as 'bankruptcy' ;) . In bankruptcy cases poor 'property-owning' saps get to 'keep' the house (which belongs to the bank anyway until the debt is paid off) if they are in NE or very little equity. They still owe the debt though and will only be 'quids in' if HPI takes off again

Edited by olliegog

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OK, I think I've got it.

Some people have borrowed more money than they can pay back. This would mean that the Bankelzebubs would be out of pocket. Far better then to take the debt from the borrowers and distribute it across the wider base of all taxpayers. That way the Satandeers of this world still get their money.

As to who gets to live in the house, what do they care if the rent is paid?

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Willem Buiter has a good piece in the FT today, but in the in the last few paras he comes up with the idea of writing off the debts of domestic borrowers through a debt jubilee.

http://blogs.ft.com/maverecon/2009/07/quan...king-heres-why/

it is not a totally ridiculous idea just needs to be modified a bit, i said something similar back in oct 08 what the govt should do is slash house prices back to the year 2000 then anybody who took out their first mortgage after jan 1st 2000 should only pay interest on the value of the property at year 2000 levels and the excess they overpaid should be interest free this way they save some money and the banks get back the actual capital they lent out and the property market would be returned to affordable levels this would help to save the economy , companies and more importantly jobs so people can keep paying what they owe , people who bought before the year 2000 and mew'd to fund their lifestyles, B.T.L landlords , property developers should be excluded from the scheme as its their own fault they mew'd, they had their opportunity to buy an affordable property and just got greedy , B.T.L landlords and property developers are in it for the money so its a business also second home owners should be excluded as it should be for people that have bought a property as a home not an investment, and before people start moaning this would be of no benefit to me i bought my property back in the 90's i am thinking of the bigger picture it is about more than property prices now.

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If they go through with this I can promise you now that what ever my net "share" of the cancellation is as a creditor I will destroy government assets to that value. Then I will quit my job and go on the social with the express intent of spending every waking minute hunting down and taking a crap in the mouth every single member of the labour party, starting from the top.

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Is "liquidity" the money you have or potential reserves you have to balance the books where "capital" is what you need in order to lend and or expand? So in a nutshell is the article saying that unless someone gives the banks a LOT MORE money in order to lend and cancels all debt property prices will fall, unemployment rise and we will all be living more frugally for a long time to come?

When Genius Failed - Roger Lowenstein

P42

...But liquidity is a straw man. Whenever markets plunge, investors are stunned to find that there are not enough buyers to go around. As Keynes observed, there cannot be "liquidity" for the community as a whole. The mistake is in thinking that markets have a duty to stay liquid or that buyers will always be present to accommodate sellers. The real culprit in 1994 was leverage. If you aren't in debt, you can't go broke and can't be made to sell, in which case "liquidity is irrelevant. But a leveraged firm may be forced to sell, lest fast-accumulating losses put it out of business. Leverage always gives rise to the same brutal dynamic, and it's dangers cannot be stressed too often.

For me this sums up some of the main problems with liquidity.

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I don't know what scares me more, the fact that this is being discussed at all, or that I can actually believe that Gordo might do it.

I'd imagine that at some point just before the election, when it's obvious that Labour are going to be wiped out, this fabulous new policy would be announced, along with a warning that "if you vote Tory, you'll have to repay your debts".

Lock and load.

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I'm sure our international creditors will be more than happy to bend over.

Japan has already muted this idea.

I'm sure China would like just to keep consumption up and get the masses back to work to stop social unrest there.

Personally I'd like to see it but with conditions, one all nations must run a balance budget, maximum mortgage multiples enforced etc....

The creditor nations are going to get screwed anyway, in fact we are all going to get screwed.

The system is completely bankrupt.

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