Interest Rates down to 0.5%!!

[div0]

Fractional reserve banking is just to do with the bank only actually storing (reserving) a small percentage of your invested money and having that available for being withdrawn at any one time. The rest is invested elsewhere. If everyone withdrew all their cash at the same time, then the banks wouldn't physically have the cash available.

 

[Mulder]

Fractional reserve banking is just to do with the bank only actually storing (reserving) a small percentage of your invested money and having that available for being withdrawn at any one time. The rest is invested elsewhere. If everyone withdrew all their cash at the same time, then the banks wouldn't physically have the cash available.

It's more than that though, it's also about creating money from thin air. £100 that a bank receives in deposits can be turned into £500 of loan debtors pretty easily, i.e. the bank gives out £500 worth of loans whilst only having £100 of principal.

 

[Deleted member 651465]

I kept some aside for just such an occassion.. shame it's all USD though

 

[MrMoonX]

as long as we dont get hyper inflation and end up like Zimbabwe or pre war germany it will be fine

 

[blop]

So what does that mean for first time buyers?

It means your lucky you didnt buy a house like the idoits who believed they were investing between the worst of the peak (2005-2007). House prices have dropped approx 30% since 2007 and will likely fall more yet.

With unemployment on rise, the nation pretty much bankrupt public spending will have to decrease and taxes rise, so more unemployment. Que repossesions in large numbers....que people who property as Buy To Let (basically scum who ought to be shot en masse) selling up when they realise the return on their 'investment' will not materialise in the medium term.

If you havent bought wait for at least 2 years.

regards

for more infor check out

www.housepricecrash.co.uk

 

[Cosimo]

Not printing money, no, but quantative easing.

So that's what they call it, who makes up these phrases.

 

[brid]

In Zimbabwe they call it 'printing money' and 'hyperinflation'

Over here, they call it 'quantitative easing' and FORGET (not) to mention the inflation part.

The public here are by and large, taken for fools by the media. Every pound the government creates out of thin air is devaluing every other pound out there in circulation.

Inflation is government theft on labour that people dont seem to realise.

 

[MrMoonX]

Inflation is government theft on labour that people dont seem to realise.

I like that, might have to quote that to my union buddies and see what kinda discussion it can produce

 

[Rich_L]

I can't believe how much sterling has been devalued by this announcement, we're doomed

v USD -> -0.5%
v EUR -> +0.24%

 

[csmager]

In Zimbabwe they call it 'printing money' and 'hyperinflation'

Over here, they call it 'quantitative easing' and FORGET (not) to mention the inflation part.

The public here are by and large, taken for fools by the media. Every pound the government creates out of thin air is devaluing every other pound out there in circulation.

Inflation is government theft on labour that people dont seem to realise.

They're aiming for 2%, just like they're meant to either way.

 

[*Moangroan*]

People can't go out and spend spend spend...you dunno if you have a job next week.

 

[Izi]

Shame i fixed at 6%

I know, retarded, but the last economic crisis in the 80s the interest rates went up to 15% - the only experiance i had.

 

[Izi]

It means your lucky you didnt buy a house like the idoits who believed they were investing between the worst of the peak (2005-2007). House prices have dropped approx 30% since 2007 and will likely fall more yet.

With unemployment on rise, the nation pretty much bankrupt public spending will have to decrease and taxes rise, so more unemployment. Que repossesions in large numbers....que people who property as Buy To Let (basically scum who ought to be shot en masse) selling up when they realise the return on their 'investment' will not materialise in the medium term.

If you havent bought wait for at least 2 years.

regards

for more infor check out

www.housepricecrash.co.uk

30%? I thought it was 20%..

Also, more people will be looking to rent instead of buy, so rent market won't be affected as much. With interest rates being dropped Buy-to-let mortgage payments will be less also.

 

[Scam]

tt

Great. So not only are savers' rates well below inflation, but by printing money they're hoping inflation will go up? Savers may as well start writing blank cheques to Gordon Brown and cronies

 

[mattheman]

It's still not going to make me stop saving.

take you money out of your savings, your going to lose it.

 

[Izi]

take you money out of your savings, your going to lose it.

lose?

 

[mattheman]

Shame i fixed at 6%

I know, retarded, but the last economic crisis in the 80s the interest rates went up to 15% - the only experiance i had.

The reason why interest rates cant go up is because of wage rates are not rising, the next thing is QE.
Say bye bye developed nation hello Argentina.

 

[AJUK]

Now that, is the most alarmist post I've read on these forums for quite a while .

Firstly as much as I dislike Gordon Brown, it's not all his fault. The fact that he is not in control of interest rates is a good thing, and when the system was implemented it was hailed as the best economic move the UK has made for a very long time. Gordon Brown is still a highly respected economist, and although he has made some blunders, name me a single human being that hasn't. It's just that the macro eonomic factors inflated the consequences of those blunders.

The Zimbabwe of Europe - I don't know what to say about that except for, what do you mean?

You clearly have no comprehension whatsoever how money works and how BoE independence has lead to a lack of regulation - the root cause of the problem we are facing. It is all Brown's fault.

 

[Ted K]

I don't see what all the fuss is about tbh, I think the media has created a panic with this so called "recession" when personally it hasn't affected me in the slightest.

 

[Glaucus]

I don't see what all the fuss is about tbh, I think the media has created a panic with this so called "recession" when personally it hasn't affected me in the slightest.

At the moment I think it either has or hasn't affected people. Just look at the total number of companies going down the drain and the number of companies laying staff off.