Bank of England interest rates- down they go again!

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    #46
    yes I know MTG that really bugs me.

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      #47
      It seems to me, (buy to let mortgages) that if they reduce the rates they claw it back in arrangement fees ect.

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        #48
        Originally posted by Gigabyte View Post
        well you can bet your bottom dollar that the interest rate on my savings will be put down immediately!
        Exactly.

        And if the #$%#^%$# imbecile Anatole Kaletsky gets his way, they'll tax your savings as well. (That is, in addition to the implicit taxation of savings via negative real interest rates and income tax on interest)

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          #49
          Originally posted by lorenzo View Post
          And if... Anatole Kaletsky gets his way, they'll tax your savings as well.
          But David Cameron proposes precisely the opposite. They cannot both be correct!
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

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            #50
            Originally posted by jeffrey View Post
            But David Cameron proposes precisely the opposite. They cannot both be correct!
            The thinking behind Kaletsky's solution is to get savers to spend their money on investment and High Street tat. But they won't, they'll just put if offshore or under the bed, or in precious metals or something. The reason is that people feel like saving in a deflationary environment (wisely).

            This will undermine the bank's balance sheets even further and ultimately perpetuate and worsen the present crisis.

            Cameron's solution will encourage savings, may or may not deepen the recession in the very short term, but will shore up the capital base of both the banks and the wider economy. The investment and spending will come later (and probably quicker than AK's nonsense idea), ergo, healthier long term solution... and won't screw fixed income investors such as retirees.

            Government needs to butt the #### out and let the market do it's job and readjust.
            Now signature free.

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              #51
              its a toughie! - Whilst I am certainly no Keynes

              Kaletsky suggests following the well trodden path of borrowing our way out of debt. Its been done before and can be done again. But why? whenever there has been an economic situation govt's have borrowed their way out of it only to be back there a few years later. Surely it could be argued that the continual borrowing to buck recession simply fuels the boom and bust economy rather than letting the market slowly recover to a normal position?

              surely it is better to reward the saver who will continue to be able to feed his family if he is made redundant than to reward the people who borrowed recklessly and are allowed to continue borrowing into bankruptcy. Whilst some of what Kaletsky says makes some sense its just a huge huge huge risk (but then I suppose most of economics is!) Okay so we dont have any interest at all on our savings, lets all go out buy a new car, new wardwrobe, lets buy a boat, and then bang you lose your job and boom its all gone. I guess you would just bank on the fact that increase in demand for commodites = more jobs. But if those jobs are created in China or wherever the whole thing goes tits up

              such is life.

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                #52
                Originally posted by Gigabyte View Post
                its a toughie! - Whilst I am certainly no Keynes

                Kaletsky suggests following the well trodden path of borrowing our way out of debt. Its been done before and can be done again. But why? whenever there has been an economic situation govt's have borrowed their way out of it only to be back there a few years later. Surely it could be argued that the continual borrowing to buck recession simply fuels the boom and bust economy rather than letting the market slowly recover to a normal position?

                surely it is better to reward the saver who will continue to be able to feed his family if he is made redundant than to reward the people who borrowed recklessly and are allowed to continue borrowing into bankruptcy. Whilst some of what Kaletsky says makes some sense its just a huge huge huge risk (but then I suppose most of economics is!) Okay so we dont have any interest at all on our savings, lets all go out buy a new car, new wardwrobe, lets buy a boat, and then bang you lose your job and boom its all gone. I guess you would just bank on the fact that increase in demand for commodites = more jobs. But if those jobs are created in China or wherever the whole thing goes tits up

                such is life.
                Equally depressing (and possibly connected) is the fact that the cost of firelighters in our local Co-op has increased by a staggering 105% since just before Christmas. I think it's an omen.
                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                  #53
                  oooh the co-op are predicting tough times! still at least (once youve bought the extortionate firelighters) we can burn our old christmas trees to keep warm.

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                    #54
                    Originally posted by mind the gap View Post
                    Equally depressing (and possibly connected) is the fact that the cost of firelighters in our local Co-op has increased by a staggering 105% since just before Christmas. I think it's an omen.
                    It's just one more way to rein-in your career as a budding arsonist.
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

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                      #55
                      AK's proposal is nothing to do with Keynesianism per se. In theory, borrowing to invest is fine and features in any number of schools of economic thought. Borrowing to invest is positive with the premise that

                      a/ The investment is productive
                      b/ The debt is serviceable

                      Otherwise you end up with (or continuing) mal-investment. This is the tremendous negative impacting the world economy, the LUDICROUS level of mal-investment.

                      It is very difficult, because of the situation we are in, to find investments that fulfill the above. Housing is not a productive investment and neither is consumer spending... not directly anyway and almost certainly not 100% productive for the UK economy as it stands (more productive for emerging economies than UKs).

                      Keynesianism (though not my favoured economic model) is fine providing the model is implemented all the time... in boom times and bust. As it stands we've had laissez-fair deficit inducing electoral bribery and pork barreling economics with an invocation of Keynes when it FUBARs.

                      100% Keynes would have seen the coffers in a very large surplus and in a great position to weather a very much shorter and shallower recession (because the brakes would have been applied to the boom). This is not the case, so this perverted Keynesianism is precisely the wrong thing for the future health of the economy right now.
                      Now signature free.

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                        #56
                        what is your favoured economic model then Lorenzo and where should I stash my cash before brown et all get a hold of it? my matress is too comfy to put cash in it?

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                          #57
                          Originally posted by Gigabyte View Post
                          what is your favoured economic model then Lorenzo and where should I stash my cash before brown et all get a hold of it? my matress is too comfy to put cash in it?
                          Somewhere in between the Chicago and Austrian Schools.
                          Now signature free.

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                            #58
                            Far be it for me to offer financial advice, but my spare dosh is in short gamma equity option strategies and corporate bond funds... but that could change very quickly as things develop.

                            Liquidity and flexibility is key.
                            Now signature free.

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                              #59
                              Originally posted by lorenzo View Post
                              Far be it for me to offer financial advice, but my spare dosh is in short gamma equity option strategies and corporate bond funds... but that could change very quickly as things develop.

                              Liquidity and flexibility is key.
                              Most of mine is going to be in the local Co-op at this rate
                              'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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                                #60
                                Originally posted by jeffrey View Post
                                It's just one more way to rein-in your career as a budding arsonist.
                                I resent the incineration in that remark!
                                'Pause you who read this, and think for a moment of the long chain of iron or gold, of thorns or flowers, that would never have bound you, but for the formation fo the first link on one memorable day'. Charles Dickens, Great Expectations

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