Friday, June 25, 2010

Debt binge coming to an end?

Household savings exceed borrowing for first time in 20 years

Families are saving more money than they are borrowing for the first time in more than 20 years, a Bank of England report shows. Households last year put £24 billion into deposit accounts and took out £20 billion in new loans. It is the first time since 1988, when the current records began, that savings exceeded new borrowing. The statistics reflect a culture of austerity that has also dominated public finance policy.

Posted by little professor @ 12:07 AM (1874 views)
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22 thoughts on “Debt binge coming to an end?

  • Can you spell DEFLATION?

    Captcha: clouding in
    (these are seriously brilliant)

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  • fallingbuzzard says:

    Captcha: deeflaily telephraglation

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  • brickormortis says:

    Low interest rates = lots more cash for free! No big mortgage and already have a new TV and iPhone so bit mor emoney in the bank. I don’t think this is complex economics!

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  • brickomortis – you are missing the point. What sneaker says @ 1.

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  • People in general – and techieman in particular – have been banging on about the threat of deflation for years. If it is such a threat, why are CPI and RPI so high? One of these measurements only went negative for a very brief period of time – was it 1 month?

    Deflation is only a risk if you take a socialist view of the world.

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  • @HP
    You don’t have to be a socialist to want a lot of money whizzing round the economy.We have practically zeroed interest rates and ,instead of increased spending we have tumbleweeds bowling down the high streets ,through the hoarding of money on top of the chronic hoarding of property.Both hoards need addressing.Send for Gesell ( Keynes’s Keynes)

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  • We have no money but loads of debts!

    UK’s external debt is £6.058 trillion pounds versus foreign exchange reserve of £46 billion pounds.

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  • the banks will benefit from people saving more

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  • the hoarding of money on top of the chronic hoarding of property.

    Non sequitur?

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  • We have no money but loads of debts!

    Good point. Lots of paper, but no wealth.

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  • Sorry.

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  • cynicalsoothsayer says:

    Overvalued wealth?

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  • So if everyone has got so much debt, where has all this magic money come from to save! Something smells like BS here! The best thing people can do is declare bankruptcy en mass and walk away from your debt. Let the banks take the loss! They got us into the mess. Oh I forgot they are all bankrupt themselves. They are now bankrupting nations!

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  • hpw – you would do well to read some books on the subject before pontificating a load of twaddle. try Harry Dent (who predicted deflation then a brief inflationary overload based on artificial stimulus and now….).

    Briefly there was likely to be an inflationary response to a deflationary threat – thats why they threw the kitchen sink at it. Thats why there was a rebound in asset classes (incidentially as predicted by me!) . You just dont get it, and never will in your linear world.

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  • Briefly there was likely to be an inflationary response to a deflationary threat – thats why they threw the kitchen sink at it. Thats why there was a rebound in asset classes (incidentially as predicted by me!) . You just dont get it, and never will in your linear world.

    You are the one who doesn’t get it. Prices fall and rise for all sorts of reasons, the money that was created that most people seem to be worried about disappearing was artificial.

    Though, I accept that even broken clocks can be right twice a day.

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  • You’ve got a house on interest only mortgage with no principal repayments term (& never will) and furniture and utensils on instalment loans, ipod/iphone on credit cards finance.

    Literally, you don’t have anything to inflate or deflate with since all stuffs do not belong to YOU!

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  • Briefly there was likely to be an inflationary response to a deflationary threat – thats why they threw the kitchen sink at it. Thats why there was a rebound in asset classes (incidentially as predicted by me!) . You just dont get it, and never will in your linear world.

    Prices fall and rise for all sorts of reasons, most of the money that has been destroyed was a result of an explosion of lending. I’m not sure it wasn’t totally artificial.

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  • HPW thanks for fixing the italics!

    This (which i read after my last post) – MIGHT help you. I accept i might be wrong but you dont. Thats what i find so annoying about you.

    http://www.rickackerman.com/2010/06/how-deflation-threat-helps-policymakers-inflate/#more-23653

    I particularly like this bit:

    “Every time there is stress in the system (i.e., the U.S. credit contraction in 2008, or the European one in 2010), inflation – in the form of debt-based money supply ramp up – is brought forth. This cannot continue forever, but it takes a greater thinker than myself to be able to call it a wrap right here and right now. Eliminate debt, own value and pursue productive endeavor.”

    I might post the whole thing later – as it supports both inflationists and deflationists in more or less equal measure.

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  • Thats what i find so annoying about you

    I like annoying you!

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  • Get a room

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  • @HP
    Non-sequitur? You what?People can sit tight in their houses AND not spend any money.

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  • “I like annoying you!” – fair comment, you are right i shouldnt give a flying f*ck! :-).

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