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Realistbear

Bankruptcy Rate-new Figures Show Its Worst For 40 Years

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http://uk.biz.yahoo.com/060203/214/g2wck.html

LONDON (ShareCast) - The number of Britons turning to bankruptcy hit the
highest level for forty years
at the end of 2005, as it becomes an increasingly popular way of paying off debts.
The number of people in England and Wales unable to pay their Advertisement
debts surged to the highest in at least four decades at the end of last year, as the evidence piles up that Britons' have taken on too much credit.
Figures from the Department of Trade and Industry showed that the number of individual insolvencies rocketed a massive 57.1% in the fourth quarter compared with a year earlier to a 20,461. On the previous quarter insolvencies jumped 15.0%.
The leap in the fourth quarter took insolvencies to their highest level since records began in 1960
.
A separate report by the Department of Constitutional Affairs also revealed that the number of mortgage repossession orders made in the fourth quarter in England and Wales rose 58% on the year.

:blink::o:o:D

Looks as if Gordon's miracle economy is looking a bit ragged? IR are set to go up up and away methinks.

Edited by Realistbear

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http://uk.biz.yahoo.com/060203/214/g2wck.html

LONDON (ShareCast) - The number of Britons turning to bankruptcy hit the
highest level for forty years
at the end of 2005, as it becomes an increasingly popular way of paying off debts.
OK, what are the side effects of people turning to bankruptcy? I don't mean to the people who have declared themselves bankrupt, I mean to the wider economy?
What happens to all that debt - who shoulders it?
Shavedchimp

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At first the banks shoulder it, then as it gets worse they increase lending rates to counter-act the extra risk, thus the people then shoulder it that aint got bankrupt yet.

This is the best sign yet of what we on here have known all along, that houses are un-affordable and out of line with wages.

intrest rates have no choice now but to rise, and the domino effect has arrived

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Gordon will eventually get the message that unrestricted credit and excessive liquidity is destructive and undermines the entire economy. Easy credit discourages productivity and the entire nation becomes dependent upon HPI to keep the economy afloat. This is, in essense, the basis of Brown's "Miracle economy." Wealth through borrowing made possible by HPI and unlimited cash that inflation brings.

To correct the situation Brown must raise IR and raise them enough to counteract the forces he has unleashed through excessive liquidity. He should have followed his mentor Al Greenspan by starting to raise rates instead of lowering them when he did. My guess is that Al will be advising him to raise rates in .25% increments until we reach neutral+ which, for the UK, is probably around 6%.

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...

What happens to all that debt - who shoulders it?

...

You have to understand the meaning of the answer lies in the mechanics of fractional banking system where the debts of one person become the deposits of a second. The deposit of the second can then be counted on to be lent against in a fractional scheme. They have it all worked out (so they tell us).

Under this system debts can be resolved in three ways.

1 Loan are repaid. Thats fair but its not happening.

2 Defaults - the banks lose. (We cant have that can we?)

3 Inflation of the money supply so that the system can continue and loans are repaid with devalued money. In the 30s the money was fixed to gold and could not be expanded, the fractional scheme imploded resulting in 1000s of banks going under.

So the winner is 3. Inflate or die.

Now as credit has expanded creating a housing bubble how much inflation will be required to keep the scheme going? This is why gold is going up.

Edited by Lurker at the pleasuredome

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  • 301 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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