More money to the banks!

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So the Chancellor and the Bank of England are going to pump £billions into the banks to enable loans to be given to householders and small businesses.
At least one commentator today suggested that this is the precursor to a major financial meltdown within the EU, causing major problems for everyone.
Are you confident to keep spending/loaning in the year ahead?
 
Just more tinkering with a system that nobody actually understands.

Bound to work out ok I'd have thought....
 
Cut the banks out, just send everyone £20K. I'll reinvest it in the economy for them!
 
Banks won't lend it out. They haven't done before. Just swallowed it up into their balance sheets. Greedy buggers are putting up mortgage rates even though BOE rate is 0.5% and eurozone rate is about 1.5%. The banks are the problem. They leant to completely unsuitable people and now they won't lend *our* money to anyone else nor pay decent rates of interest.

There are a lots of these peer to peer lending systems around. I think hmg should set up their own bank and one of these and put the greedy useless banks out of business. They wont respond to being leant on so competition in the marketplace is the only answer.

The vast majority of people could use the extra money in a far more profitable way than any of the banking institutions.
 
srichards said:
Banks won't lend it out. They haven't done before. Just swallowed it up into their balance sheets. Greedy buggers are putting up mortgage rates even though BOE rate is 0.5% and eurozone rate is about 1.5%. The banks are the problem. They leant to completely unsuitable people and now they won't lend *our* money to anyone else nor pay decent rates of interest.

There are a lots of these peer to peer lending systems around. I think hmg should set up their own bank and one of these and put the greedy useless banks out of business. They wont respond to being leant on so competition in the marketplace is the only answer.

The vast majority of people could use the extra money in a far more profitable way than any of the banking institutions.
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Very true, but Osborne probably has an eye to the future, his banker pals won't be offering him directorships when his lot get kicked out if he doesn't look after them now ;).
 
The Chancellor would be better off spending the £bn's in paying off everyone's mortgage then everyone will have more money to spend. And it will get filtered into the banks that way as well. Why give it directly to the banks? The last lot of money given to the banks didn't get filtered down to the general population, so I have little doubt that these £bn's will be the same.
 
Lynton said:
Cut the banks out, just send everyone £20K. I'll reinvest it in the economy for them!
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That's exactly what Australia did (OK, I think it was AU$5000) and it worked handsomely for them.

Every economically successful nation (China is probably the best example) has proved that investing in infrastructure is the answer to economic growth, and everyone knows it except our own political masters (regardless of party).

Of course, China doesn't have the bank problem. All banks there except 2 are owned by the State, so the banks can't set up a cartel to fleece both the state and the public...
 
srichards said:
Banks won't lend it out. They haven't done before. Just swallowed it up into their balance sheets. Greedy buggers are putting up mortgage rates even though BOE rate is 0.5% and eurozone rate is about 1.5%. The banks are the problem. They leant to completely unsuitable people and now they won't lend *our* money to anyone else nor pay decent rates of interest.

There are a lots of these peer to peer lending systems around. I think hmg should set up their own bank and one of these and put the greedy useless banks out of business. They wont respond to being leant on so competition in the marketplace is the only answer.

The vast majority of people could use the extra money in a far more profitable way than any of the banking institutions.
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:clap:
 
The money goes straight into the back skyrockets of the owners. Banks lend when they choose to and stop when they choose to in an orchestrated dance designed to gain further control. It is obvious when you follow the money trail.
 
I wonder what would happen if a run on a bank was threatened? They seem to have the idea they can do what they like. What if all those with money in a certain bank just decided they were going to take it away and invest it in others? Pick the weakest one and pull the rug from under it.

It's a similar concept to the often seen boycott Esso/BP which never takes off.
 
Trouble is they are unassailable... And they know it.

Whilst we probably would have cheered to see the bloodsuckers go belly up, the consequences would have been terrible.

They weren't bailed out by the government because they were just golfing buddies of ministers...
 
They were bailed out because they OWN the governments. The entire situation is and always has been manipulated and orchestrated. Follow the money trail.
 
Does no-one else see the links with 1920s Germany here? printing more money simply devalues it, in the case of Germany, printing money to pay debts led to huge inflation and eventually to the second world war.
 
I see nobody is mentioning the shareholders of the banks? If the banks fail so do our pensions!
 
Splog said:
I see nobody is mentioning the shareholders of the banks? If the banks fail so do our pensions!
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Don't forget that many folk who moan about the banks and large companies making profits (ie BP) don't have private pensions so just don't give a damn (and don't understand), they are just relying on the state to pay for them in retirement, and if they then struggle it will be everybody else's fault.


The government want the banks to lend to companies, the problem is many companies just don't want to borrow anymore, they are looking to pay off debt, as are many individuals, those who have seen the light and understand you can't live off credit for ever.

I do wish the government would stop giving very cheap loans to banks, the interest rates on my savings will never go up while it's cheap and easy to get government cash.
 
Steep said:
Does no-one else see the links with 1920s Germany here? printing more money simply devalues it, in the case of Germany, printing money to pay debts led to huge inflation and eventually to the second world war.
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Great idea lets invade France gets my vote:thumbs:
 
Everyone should do what Iceland did...
 
thought id snipped that ...ooops.

desantnik said:
Trouble is they are unassailable... And they know it.

Whilst we probably would have cheered to see the bloodsuckers go belly up, the consequences would have been terrible.

They weren't bailed out by the government because they were just golfing buddies of ministers...
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:thumbs:
 
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Garry Edwards said:
That's exactly what Australia did (OK, I think it was AU$5000) and it worked handsomely for them
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Thing is Australia is relatively a long way from anywhere else, so the majority of the government handout would be spent in Australia.

Give everyone £5K here and the majority will have a holiday abroad spending the money outside of the UK, so not helping the UK at all.
 
neil_g said:
can we not just reset everyones debts and start from scratch? please? :naughty:
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Absolutely not, I've paid all my mortgage and have no debt, everyone else should do the same. Unless they say the average debt if 56K so we'll just give EVERYONE 56K so us who have done the right thing will be £56K better off and the debtor will have nowt. :)

The same mantra should be use by governments and people a like.

IF YOU CAN'T AFFORD IT THEN DON'T BUY IT.
 
acetone said:
Absolutely not, I've paid all my mortgage and have no debt, everyone else should do the same. Unless they say the average debt if 56K so we'll just give EVERYONE 56K so us who have done the right thing will be £56K better off and the debtor will have nowt. :)

The same mantra should be use by governments and people a like.

IF YOU CAN'T AFFORD IT THEN DON'T BUY IT.
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yay you..

who said anything about not being able to afford anything?
 
acetone said:
Absolutely not, I've paid all my mortgage and have no debt, everyone else should do the same. Unless they say the average debt if 56K so we'll just give EVERYONE 56K so us who have done the right thing will be £56K better off and the debtor will have nowt. :)

The same mantra should be use by governments and people a like.

IF YOU CAN'T AFFORD IT THEN DON'T BUY IT.
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But governments work by borrowing...always have for hundreds of years.
 
Banks rely completely on the basic human desire for stuff. If we did not borrow there would be no money in the illusory system.
 
The problem isn't the borrowing itself, it's the borrowing and then not paying it all back.
 
No, the problem is banks creating money from thin air and orchestrating boom and bust scenarios.
 
trencheel303 said:
The problem isn't the borrowing itself, it's the borrowing and then not paying it all back.
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11073e99.jpg
 
srichards said:
Banks won't lend it out. They haven't done before. Just swallowed it up into their balance sheets. Greedy buggers are putting up mortgage rates even though BOE rate is 0.5% and eurozone rate is about 1.5%.
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They lent to me (building society in my case) and given how fiercely some of them are pushing their mortgage products in advertising, I have to assume they are lending to other people as well. I have no doubt at all that if I wanted to move my mortgage I could get one on competitive terms from any of the high street banks with no difficulty at all.

The 3 month LIBOR rate is about 1% at the moment and this is a better indication of what banks pay to borrow than the BOEBR, the "problem" is that after the crisis a couple of years back the banks have become much more risk averse, so instead of complaining that they are lending too much to people the complaint is that they aren't lending enough.
 
srichards said:
Banks won't lend it out. They haven't done before. Just swallowed it up into their balance sheets. Greedy buggers are putting up mortgage rates even though BOE rate is 0.5% and eurozone rate is about 1.5%.
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The rate of interest on a loan is calculated based upon risk - the risk that the money won't be repaid.

Higher the interest rate, the higher the risk of default.

The reason why UK mortgage rates have risen is because the lenders are looking at what would happen if the Eurozone goes splat - which is massive armageddeon to employment in the UK... which means massive defaults on mortgages.

THAT is what they are doing and its got nothing to do with the BOE/HMG at all.
 
If they charge higher rates then there is a *higher* risk of loans not being repaid if life goes belly up! What they need to do is to lend at conservative levels with lower rates of interest so if someone should lose their job they can still find a way to survive before other help kicks in eg payment protection etc.

Is the 12 month libor significantly higher than the 3 month? If not that suggests the market thinks the bailout is going to work so there is no excuse for fleecing customers.
 
srichards said:
If they charge higher rates then there is a *higher* risk of loans not being repaid if life goes belly up!.
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Oh indeed if you just whack it up to a billion percent, but its all about slight nudges.

Its a balancing act in an equation which really nobody understands at all - we understand some of the basics, but its become so large and multidimensional that the bankers have lost the plot- which is where we came in to this mess with complex derivatives.
 
Its catch 22, investors are waiting for signs from the main banks that they can invest, but main banks wont make a move until the euro as absorbed the last ripples of their debt as inflation, and the euro cant stabilise until theres growth, and there wont be any growth until the investors invest and main banks make a move.

We'll just have to work even harder for less as usual. :gag:
 
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trencheel303 said:
Printing money is generally something that banks do, yes.
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What they actually do is to move non-existent money from their account to ours, in other words they are lending us nothing at all. The money doesn't exist because it doesn't need to, it doesn't need to because they know that there is absolutely no way that, on a given day, everyone who has deposited money with them will actually want it back. The only 'real' money is the interest, which they get - which of course fuels inflation.

So, if they charge us say 10%, they are making a profit of 10% on the perceived value of the loan.
 
Garry Edwards said:
What they actually do is to move non-existent money from their account to ours, in other words they are lending us nothing at all. The money doesn't exist because it doesn't need to, it doesn't need to because they know that there is absolutely no way that, on a given day, everyone who has deposited money with them will actually want it back. The only 'real' money is the interest, which they get - which of course fuels inflation.

So, if they charge us say 10%, they are making a profit of 10% on the perceived value of the loan.
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Excellent post!

It is quite scary how banks do seem to stay afloat on what basically amounts to nothing more than luck and assumptions.
 
Garry Edwards said:
What they actually do is to move non-existent money from their account to ours, in other words they are lending us nothing at all. The money doesn't exist because it doesn't need to, it doesn't need to because they know that there is absolutely no way that, on a given day, everyone who has deposited money with them will actually want it back. The only 'real' money is the interest, which they get - which of course fuels inflation.

So, if they charge us say 10%, they are making a profit of 10% on the perceived value of the loan.
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This.
 
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