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Britain Is Drowning In Debt And Consumer Spending Is Drying Up

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He acknowledges the extent of the debt problem and its role in the coming economic crisis.

His "solution"......cut interest rates to prop up the house of cards for a bit longer !

Barmy ! Those chickens are gonna come home to roost eventually.

Time to pay the bill

Britain is up to its eyes in debt and 2006 could be the year we all feel the pinch

Frank Kane

Sunday January 1, 2006

The Observer

First, the good news. If you are a multi-million pound lottery winner, or a member of that small band of City executives and senior business people who get to write their own salary and bonus cheques, 2006 will be a very good year indeed. Another small group of professionals - the insolvency accountants - can also look forward to the New Year with a rosy glow, but that is all part of the problem.

The bad news is that the rest of us - say 99.99 per cent of the population - can only look forward to a year of financial belt-tightening and uncertainty. The economic omens for 2006 are more depressing than at the start of any year so far this century......................................SNIP....................

.........................................There is one instrument the government has at its disposal that might head off this gloomy scenario - interest rates. Ever since Brown (in his first act as Chancellor) set free the Bank of England, it has been more worried about inflation than consumer confidence, largely because of rising energy prices. But this may change. A cut in rates would reduce debt worries and give the property market a boost............continued................

Observer - Time to pay the bill.

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its unbeleivable that this person writes for the observer. really bad that is. 'were is debt -so c'mon. lets make lending more cheaper. that will 'ease' our money 'worries'. ????

The bad news is that the rest of us - say 99.99 per cent of the population - can only look forward to a year of financial belt-tightening and uncertainty.

he means 97.5% of THEM. as not everyone is as stupid as an observer reader.

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I am amazed that it has taken all these years to finally understand that borrowing is bad for the nation.

Maggie Thatcher for all here faults handed over a trade surplus and the nation in good financial health on the road to recovery.

Labour took the reigns and had several successfull years implementing the policies of their former enemy. However as time has gone by they have fullfilled the hard liners wishes and shifted.

They are again the party of tax and spend, and God do they spend. Trade Deficit's that for some bizarre reason feature nowhere on the list of important economic indicators by todays young inexperienced labour economists has hit record deficits some two years ago. I dare not even look at what our trade deficit is today!!.

Some may accuse me of trying to score political points, a Tory Boy who wants it like the old days. Well that could not be further from the truth. I think both parties have good things to offer, and both have bad.

With regard to the debt burden on the public debt, government debt, I think we have gone beyond the point of recovery. I think it will be the case that the IMF and a change of party will be the only solution.

It is very easy to be generous with other peoples money,and labour have not dissapointed many in the generousity stakes, however generosity cannot be given using borrowed money.

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Guest Charlie The Tramp

With regard to the debt burden on the public debt, government debt, I think we have gone beyond the point of recovery. I think it will be the case that the IMF and a change of party will be the only solution.

To cut interest rates to assist these debtors will blow back in their faces as the prudent decide they have had enough, and move their money to foreign accounts offering higher returns. Let us remember that 8 million withdrawn from a UK bank`s reserves means that`s a 100 million they will then be unable to lend.

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Maggie Thatcher for all here faults handed over a trade surplus and the nation in good financial health on the road to recovery.

agreed - i've been baffled by this for years

in the past the trade figures were a key indicator - it was said that wilson lost the 1970 election because a couple of purchases of jumbo jets distorted the figures just before the election

i don't have a problem with importing capital items e.g. machine tools because they add to the productive worth of the economy - but try finding anything in the shops which isn't made in the PRC :(

perhaps someone brighter than me can explain why this stuff "doesn't matter anymore" - it seems to me that to rely upon the kindness of strangers is insane.

i think you'll find that last months trade numbers were the worst on record - it was hardly reported in the media, as per usual - i hope the link works

http://today.reuters.com/business/newsarti...4&imageid=∩=

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perhaps someone brighter than me can explain why this stuff "doesn't matter anymore"

In the 70s we didn't have reality TV, the national lottery and 'who wants to be a millionaire?'. How much does Joe Average think about economics these days when they have so many more important things to with their time?

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Let us remember that 8 million withdrawn from a UK bank`s reserves means that`s a 100 million they will then be unable to lend.

:o

Very astute observation CTT - so FRB is basically as badly

geared as the average BTL, and works in avery nasty way in reverse.....

scary

ABB

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In the 70s we didn't have reality TV, the national lottery and 'who wants to be a millionaire?'. How much does Joe Average think about economics these days when they have so many more important things to with their time?

I think the lottery has a lot to answer for.

It and the publicity round it suggests that sucess is based on luck not effort.

It is irrational financial behavour to buy lottery tickets and because it is promoted by the government it is the government which is advocating irrational financial behavour.

I think someone called it a "tax on fools" - cant remember who.

Lady Thatcher was against it.

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To me the lottery is a tacit admission that we live in a

poorly rewarded, wage slave society -

where Joe Ordinary's only chance of escaping

is by buying a lottery ticket and winning.

ABB

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many people in debt are too far in - even 1% reduction isn't going to make a lot of difference - compare repayments on loans at 6% and 7% - not much difference

1% off your average c/c rate - you wouldn't even notice it

country as whole is up to its eyeballs - nowhere to go from here

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To me the lottery is a tacit admission that we live in a

poorly rewarded, wage slave society -

where Joe Ordinary's only chance of escaping

is by buying a lottery ticket and winning.

ABB

Think this way - 1/4 of the money staked goes to administration costs and profit, 1/4 go to dubious good causes , and only 1/2 is avaliable to share out between winners.

So half your money is down the drain in the first place by virtue of the structure of the buisiness.

Then look at your odds of winning anything worthwhile - negligable.

If you really think the best way of Joe Ordinary getting rich is gambling then put it on a horse - his odds are still negligable but nearlly twice as good as the lottery.

Even if you honestly believe gambling is a rational way of improving youre financial position it is still irrational to use the lottery as your vehicle.

And it is the poor who cant afford to waste the money that buy most of the tickets. The poor would be less poor if there was no lottery.

Should any government be promoting this and taking a benefit from it, particularly a government which professes that it wishes to improve the position of the poor and be in favour of social justice ?

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many people in debt are too far in - even 1% reduction isn't going to make a lot of difference - compare repayments on loans at 6% and 7% - not much difference

1% off your average c/c rate - you wouldn't even notice it

country as whole is up to its eyeballs - nowhere to go from here

You're right - I think the nation is more or less maxed out in debt. Everything seems to be screaming RECESSION to me. Batten down the hatches...

crude

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Think this way - 1/4 of the money staked goes to administration costs and profit, 1/4 go to dubious good causes , and only 1/2 is avaliable to share out between winners.

So half your money is down the drain in the first place by virtue of the structure of the buisiness.

Then look at your odds of winning anything worthwhile - negligable.

If you really think the best way of Joe Ordinary getting rich is gambling then put it on a horse - his odds are still negligable but nearlly twice as good as the lottery.

Even if you honestly believe gambling is a rational way of improving youre financial position it is still irrational to use the lottery as your vehicle.

And it is the poor who cant afford to waste the money that buy most of the tickets. The poor would be less poor if there was no lottery.

Should any government be promoting this and taking a benefit from it, particularly a government which professes that it wishes to improve the position of the poor and be in favour of social justice ?

It was the Cons who implemented it, but anyway thats besides the point because I bet there would be outrage from Joe Public if it was now banned as despite the odds I reckon Joe believes its their only chance of ever being rich. If anything it should be run not-for-profit.

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I agree - but I don't think the lottery is the

way for Joe Ordinary to get rich.

Unfortunately, Joe Ordinary does think that..

And don't get me going about the good causes - you might

hve thought that there have been enough outcries over them

that it might afect sales - no such hope.

Branson bid for the franchise last time around, and wanted to pay out

many more, smaller wins - at least improving the odds.

Somehow, despite thier hapless record, Camelot managed to hang on

to their monopoly.

As for NuLab - I knew Socialism had disappeared from the agenda when I saw

Paul Boateng on the news around 1998, talking aout tobacco smuggling.

That firebrand lefty socialist (of 'Today Brent East, tomorrow Westminster" fame),

uttered on National TV:

"Tobacco duty is part of the nation's revenue stream"

- so it kills people, but that's OK so long as all the taxes are paid....

ABB

(Apologies for drifting off topic)

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It was the Cons who implemented it, but anyway thats besides the point because I bet there would be outrage from Joe Public if it was now banned as despite the odds I reckon Joe believes its their only chance of ever being rich. If anything it should be run not-for-profit.

I think the really shocking thing about the lottery is that the fecking government take 12% of each ticket in tax! Camelot only take 5%, of which 0.5% is actual profit!

The breakdown is as follows:

  • 50% prize money

  • 28% good causes

  • 12% to the government

  • 5% to the retailer

  • 4.5% to camelot for operating costs

  • 0.5% Camelot profit

Regards,

crude

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It was the Cons who implemented it, but anyway thats besides the point because I bet there would be outrage from Joe Public if it was now banned as despite the odds I reckon Joe believes its their only chance of ever being rich. If anything it should be run not-for-profit.

it should be but at the last tender to run it, the not-for-profit bid promised less money for good causes etc. than the Camelot consortium after its profit

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It was the Cons who implemented it, but anyway thats besides the point because I bet there would be outrage from Joe Public if it was now banned as despite the odds I reckon Joe believes its their only chance of ever being rich. If anything it should be run not-for-profit.

Im not saying ban it, im saying the government shouldnt be involved in it and make a financial gain from it.

Wouldnt it be refreshing if a government took a principled stand to promote financial responsibility?

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Have just read that Observer article.

Its official, we are being dumbed down. Correction. We have been dumbed down. I did economics A level in 1980. They used to use articles from the Observer, Guardian etc in our lessons.

There is NO WAY they were as economically illiterate as the article referred to in this thread. There are so many things wrong with it I really don't know where to start.

And it is not a question of opinion, it is a question of the level of logical rigour that goes into the article. Economists from the far left, the far right and all points in between could tear the article to shreds if they had half a chance.

What is going on? !

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Maggie Thatcher for all here faults handed over a trade surplus and the nation in good financial health on the road to recovery.

I'm not going to let this pass without comment. Er....if you look back to 1989, it was actually Thatcher and Lawson, her chancellor, who planted the seeds of the biggest recession and house price crash for 50 years. Lawson presided over the biggest housing boom in history, except for the boom of the last ten years up to 2004, followed by a spectacular bust later. It was Thatcher's destruction of social housing, the selling of precious national assets in housing only to find ex-tenants were doing what BTL's do now, and the encouragement of "me, me, me" which created the bubble later bursting when Major was left holding the baby.

Tut Tut.....people do have such poor memory.

VP

Edited by VacantPossession

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Exactly,

There is a worrying tendency to glorify Cameron and the nu tories. Let us not forget how similar both main political parties have been in some respects.

Neither has made manufacturing or research and development a priority.

Both have stoked up credit booms for electoral purposes or (since 2001) as part of the global response to the "war on terror"

Both have liberalised the credit regime and penalised saving. Remember the tories effectively removed the difference between banks and building societies.

Both have pursued housing policies that have replaced a mix of tenure (council housing, housing associations, private rent, owner occupier) with one preferred tenure over all others.

Both have pursued wierd PFI and PPP agreements in which public expenditure subsidises and underwrites private profits in a strange new world of public sector investment that leaves the taxpayer worse of than if the government had simply spent the money directly.

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I'm not going to let this pass without comment. Er....if you look back to 1989, it was actually Thatcher and Lawson, her chancellor, who planted the seeds of the biggest recession and house price crash for 50 years. Lawson presided over the biggest housing boom in history, except for the boom of the last ten years up to 2004, followed by a spectacular bust later. It was Thatcher's destruction of social housing, the selling of precious national assets in housing only to find ex-tenants were doing what BTL's do now, and the encouragement of "me, me, me" which created the bubble later bursting when Major was left holding the baby.

Tut Tut.....people do have such poor memory.

VP

she had her good points but coal mines (self sufficient in energy) short sighted or what - ah well the russians will keep selling us energy.

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As for NuLab - I knew Socialism had disappeared from the agenda when I saw

Paul Boateng on the news around 1998, talking aout tobacco smuggling.

That firebrand lefty socialist (of 'Today Brent East, tomorrow Westminster" fame),

uttered on National TV:

"Tobacco duty is part of the nation's revenue stream"

- so it kills people, but that's OK so long as all the taxes are paid....

ABB

(Apologies for drifting off topic)

That's the same Mr Boatang whose Ghanian friend ran up a huge NHS bill?

Mr Boateng and his wife, Janet, are facing difficult questions about their involvement in the case, in which the African visitor ran up fees of £70,000 for non-emergency treatment then left without settling his debt.

Mr Boateng, who has close links with Ghana, had gone to the hospital with his wife to visit the patient, a relative of the King of the Ashanti tribe. The couple are named as his contacts in Britain.

But when the hospital contacted the Boatengs to help trace the man and recoup the money, Mrs Boateng was unable to help track him down. The hospital, St Mary’s in Paddington, London, then contacted the Department of Health – where Mr Boateng served as a Minister between 1997 and 1998 – for advice.

The DoH advised the hospital’s auditors simply to write off the £70,000, leaving the bill to be picked up by taxpayers

The Chief Secretary to the Treasury (Mr. Paul Boateng): This Government are firmly of the view that the most efficient and equitable way of funding the NHS is through general taxation

:rolleyes:

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she had her good points but coal mines (self sufficient in energy) short sighted or what - ah well the russians will keep selling us energy.

you can take any political view you want, bt my take on uk coal industry is as follows:

under NCB ( nationalisation) the industry was a typical inefficient government run thing.

i suspect that by and large the front line ( underground) workers earned their money, but there seemed to be an awful lot of overpaid management doing very little.

when it was privatised RJB brought in much more effective cost controls, but with typical coal prices of £25 /tonne to power stations it is hard to see how anyone could have made these mines profitable.

todays coal prices are about 40 % higher and so the economics have changed.

we probably have enough opencast coal available at profitable extraction costs, but the politics wont allow planning applications to go through in most of england.

the scots seem a bit more pragamatic and there is a reasonable opencast coal industry there.

i think coal has a part to play in our energy provison and the country ought to get on and find a way to get it out of the ground safely, in an environmnentally acceptable way and economically

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you can take any political view you want, bt my take on uk coal industry is as follows:

under NCB ( nationalisation) the industry was a typical inefficient government run thing.

i suspect that by and large the front line ( underground) workers earned their money, but there seemed to be an awful lot of overpaid management doing very little.

when it was privatised RJB brought in much more effective cost controls, but with typical coal prices of £25 /tonne to power stations it is hard to see how anyone could have made these mines profitable.

todays coal prices are about 40 % higher and so the economics have changed.

we probably have enough opencast coal available at profitable extraction costs, but the politics wont allow planning applications to go through in most of england.

the scots seem a bit more pragamatic and there is a reasonable opencast coal industry there.

i think coal has a part to play in our energy provison and the country ought to get on and find a way to get it out of the ground safely, in an environmnentally acceptable way and economically

valid points and im a fan of free markets. However, I'm a bit unsure about it for things like energy.

maybe the overpaid underachieving management could have been sorted out without the help of Richard Budge (or maybe not)

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  • 338 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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