Injin Posted October 6, 2008 Share Posted October 6, 2008 Banks have always had the provision to offset account balances. It's not without consent. You don't have any savings, you just have a smaller debt. You can pretend that isn't the case if it makes you feel better but it doesn't change the reality.In your example you still owe HSBC the same amount of money which seemed to be the point being made. They will come after you and you will either have to give it to them, have it taken from you or commit fraud by hiding it resulting in a possible criminal prosecution. Yes, but it doesn't happen overnight, which is the point being made. You could spend it all on beer and hookers in between times if you like, perfectly legally. Quote Link to comment Share on other sites More sharing options...
R K Posted October 6, 2008 Share Posted October 6, 2008 Yes, but it doesn't happen overnight, which is the point being made. You could spend it all on beer and hookers in between times if you like, perfectly legally. I agree there's a delay in them catching up with you and you could spend it and lie certainly. You would still owe them the money though. If that is what you mean by options, then you have options, but they're little different to getting a loan in the first place and spending it all on beer and hookers. I think you'd find the legal term though is bankruptcy and if it was considered to be reckless or fraudulent you would also face the possibility of a criminal prosecution. Quote Link to comment Share on other sites More sharing options...
Injin Posted October 6, 2008 Share Posted October 6, 2008 I agree there's a delay in them catching up with you and you could spend it and lie certainly. You would still owe them the money though. If that is what you mean by options, then you have options, but they're little different to getting a loan in the first place and spending it all on beer and hookers. I think you'd find the legal term though is bankruptcy and if it was considered to be reckless or fraudulent you would also face the possibility of a criminal prosecution. You are bankrupt anyway, through no fault of your own. The only thing that might happen is that your bankrupcy is extended a bit. If nothing else, you could have a punt with your savings on the gee gees or stock market in an attempt to make your losses good, an option that doesn't exist in a single institution, a scenario which the bankrupcy service sees a hell of a lot and treats as normal. Quote Link to comment Share on other sites More sharing options...
covant Posted October 6, 2008 Share Posted October 6, 2008 The best advice I can give is to keep your savings in cash in an instant access account with a different organization than your debt. When deciding where to put your money ask what proportion of the capital base is retail vs wholesale and if they can't tell you, or the number is less than 95%, go elsewhere. I believe that many of your small savings and loans institutions (building societies I think you call them) would be suitable. So you perceive deflation due to the de-leveraging? Quote Link to comment Share on other sites More sharing options...
Methodius Posted October 6, 2008 Author Share Posted October 6, 2008 So you perceive deflation due to the de-leveraging? I believe we will have asset price deflation and consumable price inflation. Quote Link to comment Share on other sites More sharing options...
huw Posted October 6, 2008 Share Posted October 6, 2008 If they are in separate institutions you get a choice, a chance to intervene, perhaps even a chance to profit, certainly the option to keep your savings. If they are in the same place your savings will be automatically assigned against your debt, and you will then cease to have any savings. Are you sure of this? Worst case would be if the debt survived (e.g. having been sold on to a third party) but the savings were wiped out Quote Link to comment Share on other sites More sharing options...
General Melchett Posted October 6, 2008 Share Posted October 6, 2008 (edited) Are you sure of this? Worst case would be if the debt survived (e.g. having been sold on to a third party) but the savings were wiped out Cheerful s8d aren't you? Edited to add: Govt deposit guarantee, in that event, old chap? Edited October 6, 2008 by General Melchett Quote Link to comment Share on other sites More sharing options...
covant Posted October 6, 2008 Share Posted October 6, 2008 I believe we will have asset price deflation and consumable price inflation. Thank you Methodius, for your many decent posts on this subject. Quote Link to comment Share on other sites More sharing options...
Lepista Posted October 6, 2008 Share Posted October 6, 2008 Thank you Methodius, for your many decent posts on this subject. What is it with all this hero worship to Methodius from hpc newbies...? Not knocking Methodius, it's just a little weird? Quote Link to comment Share on other sites More sharing options...
wonderpup Posted October 6, 2008 Share Posted October 6, 2008 What is it with all this hero worship to Methodius from hpc newbies...? Not knocking Methodius, it's just a little weird? In a time of crisis anyone who speaks with authority will tend to attract followers. I am inclined to belive that Methodius knows what he is talking about, but his elegant use of english sets off my class based suspicion of intellectuals- I just can't help myself- it's a pavlovian twitch I can't shake off. But, the great thing about forums like this is the sheer diversity of voices, so if he is wrong in some ways there are always equaly smart people out there to stick the boot in. Quote Link to comment Share on other sites More sharing options...
tricksters Posted October 6, 2008 Share Posted October 6, 2008 In a time of crisis anyone who speaks with authority will tend to attract followers. I am inclined to belive that Methodius knows what he is talking about, but his elegant use of english sets off my class based suspicion of intellectuals- I just can't help myself- it's a pavlovian twitch I can't shake off. ============================================================================ One can only concur. His extravagent verbosity compromises both his integrity and his credibility. Perchance in future he will temper his tendency toward excessive prosaic postulations with a modicum of reser......doh!!.... got me doing it now....! Quote Link to comment Share on other sites More sharing options...
The Eagle Posted October 6, 2008 Share Posted October 6, 2008 One can only concur. His extravagent verbosity compromises both his integrity and his credibility. Perchance in future he will temper his tendency toward excessive prosaic postulations with a modicum of reser......doh!!.... got me doing it now....! Nice try, try to write a whole page like that, not just 2 lines! Quote Link to comment Share on other sites More sharing options...
Ellie Posted October 7, 2008 Share Posted October 7, 2008 I agree there's a delay in them catching up with you and you could spend it and lie certainly. You would still owe them the money though. If that is what you mean by options, then you have options, but they're little different to getting a loan in the first place and spending it all on beer and hookers. I think you'd find the legal term though is bankruptcy and if it was considered to be reckless or fraudulent you would also face the possibility of a criminal prosecution. You know nothing about debt recovery. Quote Link to comment Share on other sites More sharing options...
Guest Steve Cook Posted October 7, 2008 Share Posted October 7, 2008 Too wordy.Bet you're a scream on a night out. Quote Link to comment Share on other sites More sharing options...
Guest Steve Cook Posted October 7, 2008 Share Posted October 7, 2008 (edited) I believe we will have asset price deflation and consumable price inflation. I think I agree with this methodius. Rampant price falls of any asset that is not utterly necessary. Rampants price rises of any asset that is utterly essential Contrary to what many may argue, I do not see real estate as an essential asset. However, food, fuel, and paying for your shelter are In other words, stagflation of a magnitude that many have, as yet, not conceived..... Edited October 7, 2008 by Steve Cook Quote Link to comment Share on other sites More sharing options...
JustYield Posted October 7, 2008 Share Posted October 7, 2008 A monetary great crunch to follow the slow motion big bang of the last thousand years. For reasons that may not be immediately obvious, the most important mathematical formula in the world at present is 1/(1-r) – the sum to infinity of a converging geometric series. Calculate the value of this formula for r = 0.98 and r = 0.90 for an approximate view of what will happen to the world’s money supply as a result of the de-leveraging to come over the following months and years, and its relevance will be painfully clear. I get 50 and 10. What do I do with this? It's not painfully clear to me, please continue. Isn't money's value relative; isn't money merely a medium of exchange? People will still need other people to do useful things for them, I'm sure about that. Therein lies the rub: who really does anything useful? Quote Link to comment Share on other sites More sharing options...
Mr Yogi Posted October 7, 2008 Share Posted October 7, 2008 If you owe HSBC £50,000 and have savings with them of £30,000 when HSBC go tits skyward you get a demand for £20,000 through the post. If you owe HSBC £50,000 and have savings with Anyotherbank of £30,000 when HSBC go tits skyward you get a demand for £50,000 through the post and keep your £30,000 until you can be dragged through the courts. This gives more options, I am sure you would agree. Bugger me! A post by Injin that I can understand! Quote Link to comment Share on other sites More sharing options...
BarryM Posted October 7, 2008 Share Posted October 7, 2008 There was a wave of cancelled appointments to view property for sale/let in London offices yesterday - bankers glued to screens not house hunting...... Quote Link to comment Share on other sites More sharing options...
Methodius Posted October 7, 2008 Author Share Posted October 7, 2008 I get 50 and 10.What do I do with this? It's not painfully clear to me, please continue. The important thing is the ratio of the two numbers. If you read r for meaning 'propensity to lend', the difference in value of the formula with different values for r will give a rough indication of the resulting reduction in total money supply. As r tends towards 1, even small absolute changes in its value will produce order of magnitude changes in the amount of money in the system. When I talk of a debt implosion, this is what I am referring to. Quote Link to comment Share on other sites More sharing options...
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