Credit Crunch

[Andy]

The UK's answer is to reduce interest rates to make it easier for people that have loans to spend more and save less. To me this is a bad idea. What are your thoughts on this?

My personal feeling is that people need to experience hardship now and get motivated to earn more money by working hard and avoiding spending on non-essential items. Also, they should be looking at ways to educate themselves to gain more skills that can get them more pay. For example, they could spend less time watching celebrity get me out of here and more time on studying how to prosper from the next recovery from the global economic meltdown.

[12noon]

The UK government is spending a fortune trying to kick start the country. I don't think they can throw enough money at it to make it work and it will all have to be paid back later.... Not a good idea.

BTW a rough guess at how much money they are pumping in. I'd say they if they spent about the same, they could just about extend the London underground to Greece.
 

[Andy]

I read somewhere that Gordon Brown is borrowing something like £40,000 per UK citizen. Also, he said that "a house is an asset" so it is no problem to borrow say 10x your income to pay for it.

Maybe the credit crunch affected the UK's ability to rescue stranded tourists from Thailand? Most other countries seemed to be sending planes in to get their folk home, but not the UK.

[Teflon]

I cannot believe the government did not do enough to prepare in the first place. Exactly one year ago i remember experts warning of an economic downturn so they can't say they wern't warned. I really do think that taxpayers money could be put to better use anyway far too much of it gets frittered away on silly things. Better housekeeping would save them a bob or two all they have to do is imagine it is their own money and it might be spent more wisely.

As for the rest of us i think people have started to curb their excessive spending but the result of this might take a while to show. Some of the banks make me laugh especially the ones that were bailed out by the taxpayer. It will be interesting to see how readily they are going to lend over the next few months.

[Queen Bee]

My personal feeling is that people need to experience hardship now and get motivated to earn more money by working hard and avoiding spending on nonessential items. Also, they should be looking at ways to educate themselves to gain more skills that can get them more pay.

I would definitely agree with this, Andy. The majority of the people I know are in debt or financially suffering due to poor job/career choices and money management.

Like many other Americans, my family knows all about wasteful spending. Everytime they go shopping they find some "nonessential item" to purchase. Knickknacks, expensive candles, functionless clothing accessories, $20 DVDs and $60 video games, etc. All of these things are fine in moderation, of course, but they also add up.

It's strange to see how surprised people are when they get to the checkout and find they've purchased nearly $200 in completely useless items.

I don't remember where I was trying to go with this slightly off-topic rant, so I'll stop it here....

[12noon]

I would definitely agree with this, Andy. The majority of the people I know are in debt or financially suffering due to poor job/career choices and money management.

Here's something a little bit off topic, but worth reading about poverty... Taken from netaid.org

Extreme (or absolute) poverty: Living in extreme poverty (less than $1 a day) means not being able to afford the most basic necessities to ensure survival. 8 million people a year die from absolute poverty.

Moderate poverty: Moderate poverty, defined as earning about $1 to $2 a day, enables households to just barely meet their basic needs, but they still must forgo many of the things-education, health care-that many of us take for granted. The smallest misfortune (health issue, job loss, etc.) threatens survival.

Relative poverty: Lastly, relative poverty means that a household has an income below the national average.

[Andy]

Hmm,

I am thinking to invest in betting companies and pawn shops since these should do well in credit crunching times.

For webmasters, job hunting and financial survival guide sites and blogs might do well.

[Manu]

Reducing interest rates is always a good idea in times of economic hardship unless inflation is unbearable . It helps the common man the most other than anyone I guess. Its good UK is taking those steps. Its necessary I guess.

[Andy]

I am reading a lot of stuff regarding the credit crunch to try and gain a better understanding of how the financial systems affect the stock market.

One interesting fact applicable to the UK is that the baby boomers like me are expected to deposit our money in banks to provide money that the banks can lend out. Before they got most of this money from other countries like China that saved their money and the workers worked for minimal wage. Now these countries want to prosper after all their hard work and get their money back. We are seeing this with the booming cities in China. Although they do have a class divide where some people are prospering and others still suffering.

Now us baby boomers are tending to have paid off our mortgages and are savers rather than borrowers, we want good interest rates on our savings. Also our parents are surviving in retirement on savings income. The people that bleed the country dry such as the young girls that choose to have multiple babies and live off benefits instead of working in factories are a problem. The people with money are the solution, so if they are treated badly by banks, they will move their money. Many people are moving their money to post office savings in record numbers to get away from banks.

I noticed some banks imposing new lock-in clauses where to get the high interest, you need to give months of notice for withdrawing money. But a smart thinking bank would offer high interest instant access accounts IMO.

Britain is highly messed up financially since it's major industries are finance and service. Plus we are best friends with the USA so we track all their problems. Also, all our politicians are either upper class toffs or social/media students maybe 

Back to the solution of the credit crunch ...

The current solution in the UK seems to be a non-solution of financial juggling. What needs to be done is for people to get more educated, switch off East Enders and celebrity get me out of here, stop binge-drinking and produce things to sell abroad. Forget about property prices, knock down your house, reclaim the land and build a big shed to make things in or raise livestock to sell abroad. For example, sell cheese to Dubai hotels or Japan. How hard is it to make cheese in your shed?

[Teflon]

Forget about property prices, knock down your house, reclaim the land and build a big shed to make things in or raise livestock to sell abroad. For example, sell cheese to Dubai hotels or Japan. How hard is it to make cheese in your shed?

Great idea but i dont think it will catch on some poeple in the UK would struggle to make cheese on toast. 

[Andy]

Great idea but i dont think it will catch on some poeple in the UK would struggle to make cheese on toast.

Well at least the great British toaster keeps the sales of marmalade buoyant and helps to test smoke detectors