Low interest rates will just prolong the pain.

If someone has overborrowed then the sooner they go bankrupt the better, so they can have a fresh start, letting the boom bust cycle start again. Low interest rates may mean high inflation which will rip off pensioners, people with savings, and everyone except people with huge debts.

Wasn't low interest rates tried in Japan in the 1990's and was a failure? There are different types of people: people who buy what they need and save and plan for the future, and people who spend all they've got (+some more). The ecomony needs the spendthifts to keep shopping, and they're all so deep in debt it will take them years to start shopping again. (Cue next generation.)

Reply to
Dave
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low interest will shrink their debts in two directions....less payments and lower real repayments... unless they just use it as a reason to run up another load of debt....

yes...

it was certainly not highly effective... a major reason being a high propensity to save (the helicopter drops of new money) a good amount was swapped into other currencies and lent to the west... much was borrowed by westerners and likewise invested in the better interest rates on offer in the west...

now the interest rates in the west are dropping, much is being unwound....god knows where it's going this week...air the yen is rising hmm??

why?

at some point they'll run out of available borrowings

Reply to
abelard

Low interest does not always lead to inflation.

Isn't that often the intended consequences?

Reply to
Godlove Katanga

let me give you a crude response....

low interest is achieved by printing enough money to lower the cost of money to a target interest rate.... until people catch on...at which time they start asking for more interest to offset the loss of value by virtue of the increased printing....

glory be.....you ask serious questions.....

money is used by governments as an element of exercising and extending power.... individuals borrow for many reasons...even in extremis to buy bread....

no persons have to borrow for a new toy....though often they so do

i don't read minds...therefore i cannot easily determine 'intended consequences' the clown does it because he's not very bright....

now he's in a trap of his own profligacy.....

what do you do when the 'interest' is greater than income?

Reply to
abelard

Oi lardy, how about an argument before I go to bed?

Reply to
Godlove Katanga

And I give you one in return - Japan.

Reply to
Godlove Katanga

most reasonable..... a great fear under the carpet of recent weeks is that could happen in the west.... while inflation is destructive....deflation is a looming terror.....

regards

Reply to
abelard

Isn't increased consumption, in the UK that often equates to extra debt, an intended result of lowering interest rates?

That's not meant to happen. As far as I know not even with hyper-inflation and extreme economic incompetence. E-mail me for Robert Mugabe's phone number.

Reply to
Godlove Katanga

consider a game of monopoly....at the end of the game... the paper is divided up again...and a new game begins....

I was born one mornin? when the sun didn?t shine I picked up my shovel and I walked to the mine I loaded sixteen tons of number nine coal And the straw boss said "Well, a-bless my soul"

You load sixteen tons, what do you get Another day older and deeper in debt Saint Peter don?t you call me ?cause I can?t go I owe my soul to the company store

i expect you're aware of the background.....indentured slavery... still thriving in india and elsewhere....

regards

Reply to
abelard

Abel starting to tune in, finally. Hopefully she will evolve to the realization that the Gold Standard is the only Standard that can save the World Economy from speculative banker thieves.

Reply to
Colonel Sanders

With the gold standard there isn't enough money for everyone. The rich get richer, keep the money, and eveyone else sinks to subisistence level.

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Reply to
Dave

Apparently everyone will have to work longer, and this is being forced by poor money purchase pension schemes, (except government employees, of course).

Not me saying this but George Magnus,

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The Age of Aging: How Demographics are Changing the Global Economy and Our World by George Magnus 10 Nov 2008 ISBN-13: 978-0470822913 >

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Reply to
Dave

Congratulations, you have described the current situation perfectly.

Reply to
yourquickcomments

So you prefer the virtual money system. This reminds me of the old Soviet Joke:

"They pretend they pay us and we pretend to work."

Reply to
Colonel Sanders

It won' t make any difference to people with sub-prime Mortages or loans. Credit card interest will not be lowered either. I think it is mainly aimed at business. But will the Banks cut their rates?

Reply to
mick

IF you wanted to make a difference, you would split the interest rates, one commercial rate for businesses, and one rate for everyone else. Apparently that's TOO easy to do for our politicians, so they keep doing the same mistakes over and over and why our economy is forever screwed.

It's a bit like the car tax disc scam. Scrap the disc, put the cost onto fuel, then EVERYBODY pays. But no, have the tax disc allows employment of make-work public sector jobs and millions of people to get away with driving without the disc (even with New Liebour's spy cameras).

Reply to
Ar

It's been going to happen in the West for all of ten years. It's just that the people who have had their eyes shut have finally started to notice.

Deflation is self-limiting. Inflation self-limits only when the currency is finally repudiated. See Zimbabwe for details.

FoFP

Reply to
M Holmes

the gold standard is primitivism...it is destructive... it will never return

Reply to
abelard

How would you enforce the different rates? Which one would be lower? Which one would apply to a sole trader? How would you keep one group from borrowing cheaply and lending it to the other group?

Except those who buy their petrol or diesel in Ireland, France etc.

Reply to
s_pickle2001

as mechanisation advances, i think any 'need' to work longer will be offset...

i can see a choice of working longer....but much of the problem is not enough (useful) work......especially for the lesser able...

society is still getting ever more wealthy....i simply don't buy into this stuff about disaster through aging populations....

i've followed your instruction and done my homework :-)

he seems a bit hysterical to me....a drop back of markets unwinding maybe two or three previous years of 'bubble' is hardly armageddon

Reply to
abelard

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