Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Reuters: Consumer Credit At Record Low

Recommended Posts

http://uk.biz.yahoo.com/01092009/325/consu...record-low.html

Tuesday September 1, 09:56 AM

Reuters

Recession

Banking Crisis

Stock Market Crash

Scandals

Consumer credit at record low

LONDON (Reuters) - Net lending to Britons in July was its weakest since records began in 1993, even as the number of mortgages approved rose to its highest since April 2008, Bank of England figures showed on Tuesday.

The figures suggest that many Britons are choosing to pay down their debt as the economic downturn persists.

Separate figures showed M4 money supply growth accelerated in July to its highest since January, while the Bank's preferred money supply gauge -- M4 excluding intermediate other financial corporations -- rose by 0.6 percent on the month, according to a new monthly series.

The Bank of England said mortgage approvals numbered 50,123 in July, up from 47,891 in June. Analysts had forecast a reading of 51,000.

"One lie begets many more lies."

Contradictions everywhere must mean some porkies are being used as propaganda.

Share this post


Link to post
Share on other sites

This is great news. A new personal austerity is the only meaningful form of rebellion against the debt slavery of the banks. Marches and protests mean nothing, but stop borrowing off them and we'll see......

Sadly it is a small indicator and doubtless the mass ramping going on is intended to get people back to their "normal" behaviour. Let us hopw it fails.

Share this post


Link to post
Share on other sites
This is great news. A new personal austerity is the only meaningful form of rebellion against the debt slavery of the banks. Marches and protests mean nothing, but stop borrowing off them and we'll see......

Sadly it is a small indicator and doubtless the mass ramping going on is intended to get people back to their "normal" behaviour. Let us hopw it fails.

+1

Let's hope people are learning something from this recession.

Share this post


Link to post
Share on other sites
This is great news. A new personal austerity is the only meaningful form of rebellion against the debt slavery of the banks. Marches and protests mean nothing, but stop borrowing off them and we'll see......

Sadly it is a small indicator and doubtless the mass ramping going on is intended to get people back to their "normal" behaviour. Let us hopw it fails.

er, let me see now. austerity a 'rebellion' against slavery?

hmm [rubs chin a little]. yes, indeed, that'll learn 'em, dirty bankers.

?

Share this post


Link to post
Share on other sites
This is great news. A new personal austerity is the only meaningful form of rebellion against the debt slavery of the banks. Marches and protests mean nothing, but stop borrowing off them and we'll see......

Sadly it is a small indicator and doubtless the mass ramping going on is intended to get people back to their "normal" behaviour. Let us hopw it fails.

but what about the already decade of debt soaked idiots ? they owe their financial soul to the banksters NOW.

Share this post


Link to post
Share on other sites
but what about the already decade of debt soaked idiots ? they owe their financial soul to the banksters NOW.

Let them declare bankruptcy - and then they can eat cake again.

Share this post


Link to post
Share on other sites
er, let me see now. austerity a 'rebellion' against slavery?

hmm [rubs chin a little]. yes, indeed, that'll learn 'em, dirty bankers.

?

Well it's actually the only effective one. They don't care about protests and marches, but "striking" from their service is handy.

Wouldn't it be wonderful if a new generation of debt-averse people grew up? GOM, yes I agree wholeheartedly and I'm not an optimist, but change happens in cultures over time and it's possible for things to change again given the change in the environment.

Share this post


Link to post
Share on other sites
I thought it was the jobless reecoeverhh? :unsure:

it wont be a commentless recovery

Share this post


Link to post
Share on other sites

Let me get this straight:

  1. Credit is at a record low
  2. Mortgage approvals and house prices are starting to rise again

Which, to me, indicates that people are reducing their spending on everything except houses. This would also indicate that people are idiots. We don't seem to be happy unless we're paying to much for a place to live.

Share this post


Link to post
Share on other sites
Let me get this straight:
  1. Credit is at a record low

  2. Mortgage approvals and house prices are starting to rise again

Which, to me, indicates that people are reducing their spending on everything except houses. This would also indicate that people are idiots. We don't seem to be happy unless we're paying to much for a place to live.

People like my dad are still absolutly conviced of houses being the best investment, he decided to keep his (large) savings and take a mortgage at the save time to invest in a flat. :(

Share this post


Link to post
Share on other sites

Ok, here is a simple graph with all the monthly data starting from April, 1993 up until July, 2009. Something media will not stress a lot: July was the first month when net lending secured against property was negative, -0.4bn.

NetLending.JPG

post-12136-1251804095_thumb.jpg

Share this post


Link to post
Share on other sites
This is great news. A new personal austerity is the only meaningful form of rebellion against the debt slavery of the banks. Marches and protests mean nothing, but stop borrowing off them and we'll see......

Sadly it is a small indicator and doubtless the mass ramping going on is intended to get people back to their "normal" behaviour. Let us hopw it fails.

What would happen if, as you suggest, most people radically changed their mindset and generally started to live as frugally as possible, with minimum borrowing?

The money supply would shrink as existing debt drained away existing money and less new debt was taken on to provide new money.

Accelerating deflationary depressionary forces would ensue - more debt default, banks’ balance sheets suffer, more collateral assets repossessed, tighter credit for any who do still wish to borrow, etc.

The government would be pressured to support its distressed citizens, hence to tax and borrow more but, from a decreasing money supply and a shrinking economy, this expropriation of money from the existing supply becomes ever more difficult.

It would be forced therefore to increase the money supply directly with new debt-free money, enter more QE.

Coupled with tightening of Capital Asset Ratios (as recommended in Bill Still’s Money Masters), this and further QE could develop into some sort of money reform, of great long-term benefit to the general population.

On the other hand the banks might accept just enough QE to remain ostensibly solvent and, assuming they can continue to control the government and avoid nationalisation, take on a war of attrition with the people - financially starve them out, as it were.

Over the next few years we might find out which way it goes. Seeing the current utter dependence of our whole economic system on borrowing and spending, we can be sure that much more is going to change than just our debt levels.

Our situation really does seem to boil down to a stark choice between fundamental monetary reform and overt perpetual debt-slavery.

Workers used to strike against their employers for better wages and conditions, and they were often prepared to undergo much hardship to achieve their aims.

Can we debtors find a similar resolve to gain control over our own means of exchange?

Share this post


Link to post
Share on other sites
I'm not convinced as to how much of it 'mindset' tbh.

I think the governing factor is provision of credit not demand.

Agreed.

I should have made it clearer that I was hypothesizing deliberately concerted demand destruction, as suggested by bogbrush, in addition to the current supply restriction.

Share this post


Link to post
Share on other sites

From the BBC's item on this news story:

Dwindling savings

With the Bank of England's bank rate still at a historical low of 0.5%, the BSA warned that interest rates were so low that this year savers might take more money out of their savings accounts than they put in.

Withdrawals from building society accounts have outstripped new deposits every month since March.

Even taking into account interest added to people's accounts, July was the third month in a row that savings balances held by building societies customers had fallen.

Adrian Coles warned that this process would hinder the ability of banks and building societies to lend money to potential home buyers.

"Total UK savings balances might struggle to increase by £11bn in 2009, much lower than the £60bn increase in balances in 2008," he said.

"These figures include interest added to accounts. If this amount of interest were not included, such a low forecast for 2009 suggests that savers will actually withdraw more money than they deposit this year across the entire savings market," Mr Coles added.

People are paying down debt. And reducing their savings at the same time.

One or more of these is probably true

1. people are using their savings to pay down debt

2. people can't get credit so are using their savings for spending instead

3. people are spending their savings because incomes are down/ unemployment is up.

4. people are using the savings from their low tracker mortgages to pay down debt.

Doesn't look rosy which ever way it is.

Share this post


Link to post
Share on other sites
do you know people are so stupid. If the news tells them they are better off, Im sure the majority actually believe it, even though they have less actual money left every month.

let them eat HD 1080i

Surely you mean 1080p

1080i was so last year, or have you been sold the patter down at the electrical store?

Share this post


Link to post
Share on other sites
Well, the BBC piece you quote clearly shows people aren't adding to their savings. In fact after taking interest into account, they are withdrawing more than they are depositing.

Net debt repayment can happen in two other main ways...1. monthly mortgage capital payments no longer offset by such large MEW figures (less equity in houses and stricter lending criteria). 2. Higher LTV demands on new borrowers reducing the amount typically offered to new borrowers of late.

I agree some people are tightening belts though need or fear. I await to witness a broader change in the uk mindset. I think this would be backed by higher actual savings. Not where it has been forced on them by lenders.

Some of those are paying pennies off there mortgages.

Share this post


Link to post
Share on other sites
From the BBC's item on this news story:

People are paying down debt. And reducing their savings at the same time.

One or more of these is probably true

1. people are using their savings to pay down debt

2. people can't get credit so are using their savings for spending instead

3. people are spending their savings because incomes are down/ unemployment is up.

4. people are using the savings from their low tracker mortgages to pay down debt.

Doesn't look rosy which ever way it is.

I would agree, people are paying down their debt, is that not like adding to your savings even if you are using your savings to pay it down...paying down mortgage debt gives you more equity and lower mortgage rates...paying down loans and credit cards saves you interest money and will give you more income once debts are paid.

Paying down debt can give you a better credit rating.

Paying down debt with high or higher interest rates than savings saves money.

Paying down debt will turn out to be rosy for the indebted when they have less debt/debt free.

Paying down debt saves money whilst interest rate/base rate are still low.

;)

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   287 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.