Do you think that banks should have had heed to creed or colour then? Don’t you think banks should give mortgages to everyone without heed to creed or colour? Do creed or colour have anything to do with ability or willingness to pay? Do they? Eh?

also – if the whole country goes under, where does it go? Come on man, get a grip!

Here endeth the lesson.

If interest rates are cut to 2% when inflation is 5% and likely to go higher, what is the point of saving?

Is it not the case that my money represents at least some of the capital the banks need to operate?

If it is likely to become worthless in a few years (do the sums!), I am likely to withdraw it and consume it.

This might make the current situation look better (emphasis on “look”), but how would it help the underlying problem?

I submit that it would not.

If you have been following this blog, you will see how New Labour has got us into a lot of debt before the crash came and refused, consistently, to make any cuts in public expenditure. It was often warned that we were entering a downturn with nothing in the bank. This, of course, is now obvious.

As usual, Labour politics has left the country bankrupt for years to come. We reckon, on this blog especially, that the total national debt, counting everything, is now around £2,000,000,000,000. We shall be paying this off for generations to come unless the whole country goes under, which seems a real possibility to me anyway.

I do hope that this helps.

Governments are that eager to please investors, they give grants to these people and compete only on the level of taxpayers money they stick in the back pockets of the rich elite.

Those speculators up sticks and hold our economies to ransom at the threat of pulling out…..thus we have limited democracy and parliamentary powers because speculators went GLOBAL with our economies.

It needs a change, only to a degree whereby power returns to government in order to exact change to remove competetion between countries so the trade area is even and with as little upset as possible to what we have now. We need LESS bureaucracy to free up business, less control at the front end of finance and MORE deliberate control of the back end where it counts. i.e. A government which can deliver what is needed in terms of the economy, backed up by external agreements of countries acting the same toward socially responsible ends.

No investor is going to pull out of an enlarged economic area which promotes values which are focused on a social agenda first with the ability of business to trade freely within it but with no advantage to be gained as to location. In fact there should in all sensibility be some method by which government collectively decide the locations of industries to suit the business, the consumer and the labour.

This isn’t socialism by the way, it is simply governments acting in a cohesive manner to deliver the goods in the right place at the right time for the right people to fulfill the right needs of business and the people, under private industry but with social conscience.

It’s also called commonsense !!

Why can this not be ?

Now then, before anyone says this is what the EU is all about, it isn’t.

The EU is a bureaucratic mincing machine which can do none of these things, and only an ALLIANCE CAN.

This alliance of free trading nations should also include Russia, America and any other country on the planet which has our own standards of democracy and social conscience !!!

It doesn’t need changes in our domestic laws whatesoever unless the people desire it.

The main reason the financial system is in such a mess is because the western world has taken on TOO MUCH debt (UK & US in particular). The Greenspan ‘put’ (Eddie George ‘put’?) has provided a bailout on numerous occasions by lowering interest rates to blow up yet another bubble. Therefore, it would seem

a) Interest rates have been set too low, too long

b) Saving has become ‘old fashioned’. Why would you have wanted to save when interest rates are so low and you can borrow fortunes to invest in property and magnify your gains

Question – How can a problem caused by low interest rates and high borrwoings be solved by low interest rates and high borrowings?

reply: Old problem too much debt
New problem no one will lend so economy tipping into recession.
We need to tackle the new problem.

reply: Not so. Some interest is better than no interest

However, to the topic.
I agree interest rates should be radically dropped to stem recession and to halt job losses and eventual depression which would take our economy into a spiral so severe it would take even more government intervention to keep our financial markets. along with the revenues they bring.

In case people forget the basics here, we are losing businesses which cater for 40% of our revenue. We know there’s a problem with the economy if 60% of it is held in place by finance which has a problem with itself and is creating an even bigger problem for the remaining 40% of our economy.

Injecting money into the system is surely one way to keep businesses afloat but only if the banks are ready to release it and if businesses can get it, and at a price where it makes a real difference. i.e. It enables them to stay in business, make goods, sell them and not fill the country up with our of work people which ever diminishing taxpayers would have to otherwise pay for.

Undoubtedly the plan for high speed rail would create jobs throughout the country. Same with the building of power stations. Frankly, I don’t care where the money comes from I just care that it’s done as soon as possible using British labour, so that in itself present an obstacle I guess.

Cutting interest rates is not the only solution to the problem of people affording mortgages though either. For many people are trapped in fixed mortgage rates and wouldn’t see a benefit so how would it be to their advantage unless lenders dropped the redemption penalties they applied ?

Secondly, there’s a problem with the Buy to Let sector with double the rate of repossessions occuring which will continue to deflate house values unless first time buyers can be placed into a position where they create demand.

I advocate a return of MIRAS for first time buyers and a switch of stamp duty to the seller so first time buyers can afford homes in order to liquidate the assets of repossessed BTL’s whilst heightening demand and thereby helping to maintain prices.

Couple this with your plans to get Britain building again with your suggestions, I see it would be a good start to fighting recession and pulling us all out of the hole we’re about to fall into with this government who’s only plan it seems is to print money and throw it against the walls of banks and let the taxpayers take the risk when the banks fail to know what to do with it.