Saturday, November 8, 2008
Around 30 lenders instantly withdrew their tracker mortgages after the 1.5% cut
Manipulation of interest rates is fixing of the price of money. On private markets, money is expensive because most institutions are bankrupt. So, government are artificially depressing the price of money to sustain low sterling prices. BUT, only the favored institutions can get enough money from the BOE to track base rates, so, this price fixing results in scarcity of money at base rate. And, don't think rates cannot go negative. Card issuers are beginning to charge for withdrawals, charge for accounts, charges plus 0% interest rates equal negative interest rates. Only banks with direct links to BOE liquidity can continue trading. Only those financiers allied to the British Establishment survive & then later purchase assets at pennies on the pound; scorched earth policy.