Collapse of the global financial system.
Discussion
Olf said:
I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
I'm in a similar position re offset but the rules changed at new year - now only first £80k ish protected by govt. So we would still be on hook for the rest of our mortgage debt - not good news.
lonny said:
Olf said:
I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
I'm in a similar position re offset but the rules changed at new year - now only first £80k ish protected by govt. So we would still be on hook for the rest of our mortgage debt - not good news.Olf said:
In all seriousness though, how best to prepare for a complete f
k up on the markets and the Euro falling?
I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
On thing that was clear during the last crisis was that the imprudent won out. Why should it be any different this time?
(only half tongue in cheek that last bit)
I'd download and read the new and revised terms post 2008 k up on the markets and the Euro falling?I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
On thing that was clear during the last crisis was that the imprudent won out. Why should it be any different this time?
(only half tongue in cheek that last bit)
DonkeyApple said:
Olf said:
In all seriousness though, how best to prepare for a complete fk up on the markets and the Euro falling?
I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
On thing that was clear during the last crisis was that the imprudent won out. Why should it be any different this time?
(only half tongue in cheek that last bit)
I'd download and read the new and revised terms post 2008 k up on the markets and the Euro falling?I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
On thing that was clear during the last crisis was that the imprudent won out. Why should it be any different this time?
(only half tongue in cheek that last bit)
That can;t be right though as that means if I'd offset say 240k of a 300k mortgage I'd potentially have 160k at risk? The'd have to wrestle the house and any further mortgage payments from by cold dead hands if that were the case.
Nearly all lenders have re papered their retail clients since 08.
I doubt that many people in the UK have not received packs from their banks containing the new, revised and binding terms. I also doubt that many people have read what the revisions have been.
Certainly nearly all terms of offset products have been adjusted.
I doubt that many people in the UK have not received packs from their banks containing the new, revised and binding terms. I also doubt that many people have read what the revisions have been.
Certainly nearly all terms of offset products have been adjusted.
DonkeyApple said:
Nearly all lenders have re papered their retail clients since 08.
I doubt that many people in the UK have not received packs from their banks containing the new, revised and binding terms. I also doubt that many people have read what the revisions have been.
Certainly nearly all terms of offset products have been adjusted.
Pretty sure we haven't - will check with the boss. Ta for the heads up.I doubt that many people in the UK have not received packs from their banks containing the new, revised and binding terms. I also doubt that many people have read what the revisions have been.
Certainly nearly all terms of offset products have been adjusted.
DonkeyApple said:
Nearly all lenders have re papered their retail clients since 08.
I doubt that many people in the UK have not received packs from their banks containing the new, revised and binding terms. I also doubt that many people have read what the revisions have been.
Certainly nearly all terms of offset products have been adjusted.
True of RBS/Virgin.I doubt that many people in the UK have not received packs from their banks containing the new, revised and binding terms. I also doubt that many people have read what the revisions have been.
Certainly nearly all terms of offset products have been adjusted.
They also (very cheekily and speculatively) went on an opportunistic trawl for capital with offest mortgage customers.
Politicians are responsible for all this because all they are, are selfish and power hungry arse holes. They can't see a currency without abusing it to suit their own ends, which in the case of the Western democracies, apart from feather bedding the politicians, is to create a welfare state that is so far in excess of what we need or can afford, that collapse is a matter of 'when and how fast', not 'if'. We also need to realise that we cannot support uneconomic enterprises, like banks run by wkers, for ever, any more than we can support people in local authorities or the NHS sitting around all week doing nothing productive.
They may save themselves. Don't count on them coming to save you.
In this country, if we had stayed with gormless Gordon, we would be there already, but it now depends if we can shrink the burden of the welfare state to sustainable proportions.
In Europe, the solution is far easier, which is to drop Spain, Portugal, Italy, Greece into a second rate Euro, and the banks which hold their debt just have to accept that it is going to go south. If they go south with it, too, bad, their successors will know better. Germany won't have to bail them out, and it can go forward in a Euro whose value (to the considerable benefit of their industry) will still be held down by including a few indigent chancers, in this case the French and the Irish. What is stopping that is the vanity of politicians who have staked their careers on 'the European project'.
PS One good bet, if you are predicting Weimar style inflation in the short term, which is certainly possible, apart from laying in stocks of gold sovs, would be to take out a finance agreement on a really expensive car with a huge balloon payment, if you can get it. That is one type of finance where they cannot vary the interest rate after the deal is struck. You can then look at it in your garage even if there is no petrol.
kers, for ever, any more than we can support people in local authorities or the NHS sitting around all week doing nothing productive.They may save themselves. Don't count on them coming to save you.
In this country, if we had stayed with gormless Gordon, we would be there already, but it now depends if we can shrink the burden of the welfare state to sustainable proportions.
In Europe, the solution is far easier, which is to drop Spain, Portugal, Italy, Greece into a second rate Euro, and the banks which hold their debt just have to accept that it is going to go south. If they go south with it, too, bad, their successors will know better. Germany won't have to bail them out, and it can go forward in a Euro whose value (to the considerable benefit of their industry) will still be held down by including a few indigent chancers, in this case the French and the Irish. What is stopping that is the vanity of politicians who have staked their careers on 'the European project'.
PS One good bet, if you are predicting Weimar style inflation in the short term, which is certainly possible, apart from laying in stocks of gold sovs, would be to take out a finance agreement on a really expensive car with a huge balloon payment, if you can get it. That is one type of finance where they cannot vary the interest rate after the deal is struck. You can then look at it in your garage even if there is no petrol.
Edited by cardigankid on Saturday 17th September 19:29
No students of history on PH then ?
How did the Weimar recover, how does any nation recover from a complete breakdown in the country finances.
So, if things go really bad, we as a nation declare bankruptcy, don't pay anyone anything. ever again.
We print new bank bills - say 10,000,000 "pounds" and we back them with either gold or land vouchers, the land owners are then given a part of this money (eg everyone with the backing of a land asset.) we could then issue derivative money based on a notional percentage of the "asset backed currency"
After all paper money is easy to reproduce.
However that only deals with local trade and bartering, it won't persuade a Chinese Factory to ship you anything.
The theory is sound, a could work at a global level, but I suspect in practical terms it would never work. A slim line Gold Standard would be the way to go at a global level.
How did the Weimar recover, how does any nation recover from a complete breakdown in the country finances.
So, if things go really bad, we as a nation declare bankruptcy, don't pay anyone anything. ever again.
We print new bank bills - say 10,000,000 "pounds" and we back them with either gold or land vouchers, the land owners are then given a part of this money (eg everyone with the backing of a land asset.) we could then issue derivative money based on a notional percentage of the "asset backed currency"
After all paper money is easy to reproduce.
However that only deals with local trade and bartering, it won't persuade a Chinese Factory to ship you anything.
The theory is sound, a could work at a global level, but I suspect in practical terms it would never work. A slim line Gold Standard would be the way to go at a global level.
I was watching the news earlier and there was an american reporter on TV mentioning something fairly relevent to the whole current state of affairs. He was saying that the US government term of office means that the ultimate decision makers for each party are doing nothing but campaigning and travelling the US looking for support in the up coming elections.
In the US they have the main elections whereby the president is elected and then the mid-terms at 2 years after this, which means the likes of Obama and his supporting team are only concentrating on winning the next set of voters instead of sorting out the current problems of the wider picture.
He was basically saying that nobody of any real power is putting their attention to the economic problems of the US and how this was affecting the world economy. Nobody was listening or addressing realistic routes to recovery as they were tied up in campaign fever.
Does this sound plausable?
In the US they have the main elections whereby the president is elected and then the mid-terms at 2 years after this, which means the likes of Obama and his supporting team are only concentrating on winning the next set of voters instead of sorting out the current problems of the wider picture.
He was basically saying that nobody of any real power is putting their attention to the economic problems of the US and how this was affecting the world economy. Nobody was listening or addressing realistic routes to recovery as they were tied up in campaign fever.
Does this sound plausable?
Sounds exactly right in the US, the same as it is in Europe. Everybody knows that countries are going to go bust, nobody wants to admit it.
The only way the EU can stop Greece going into debt is to buy all of Greece's debt. And then all of Portugal's debt. And then all of Ireland's debt. And so forth.
Essentially we're all lined up for run on the banks that's going to make Northern Rock look like the egg and spoon race at a junior school sports day. It's just that Chancellor Merkel hasn't fired the starting pistol yet.
The only way the EU can stop Greece going into debt is to buy all of Greece's debt. And then all of Portugal's debt. And then all of Ireland's debt. And so forth.
Essentially we're all lined up for run on the banks that's going to make Northern Rock look like the egg and spoon race at a junior school sports day. It's just that Chancellor Merkel hasn't fired the starting pistol yet.
davepoth said:
buy all of Greece's debt.
If you buy all of someone's debt you essentially "own" that person.If, say, Germany buys all Greece's debt it "owns" Greece and the Greeks will have to do what they're told. Which is all about politics and little to do with economics.
And that brings us back to where we are today. Greece will get bailed out, but only if the Greek people experience an uncharacteristic outbreak of common sense and realise they're better off owned by Germany than cast adrift in the Med with a lemon grove, a couple of olive trees and no paddle....
Ozzie Osmond said:
If you buy all of someone's debt you essentially "own" that person.
If, say, Germany buys all Greece's debt it "owns" Greece and the Greeks will have to do what they're told. Which is all about politics and little to do with economics.
And that brings us back to where we are today. Greece will get bailed out, but only if the Greek people experience an uncharacteristic outbreak of common sense and realise they're better off owned by Germany than cast adrift in the Med with a lemon grove, a couple of olive trees and no paddle....
Interesting post, that seems to deny that which defines a Nation.If, say, Germany buys all Greece's debt it "owns" Greece and the Greeks will have to do what they're told. Which is all about politics and little to do with economics.
And that brings us back to where we are today. Greece will get bailed out, but only if the Greek people experience an uncharacteristic outbreak of common sense and realise they're better off owned by Germany than cast adrift in the Med with a lemon grove, a couple of olive trees and no paddle....
Which, of course, is the base problem with the EU.
I doubt the Greek population will accept being "owned" by Germany.
I suspect they'd rather return to the Colonels.
Olf said:
DonkeyApple said:
Olf said:
In all seriousness though, how best to prepare for a complete fk up on the markets and the Euro falling?
I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
On thing that was clear during the last crisis was that the imprudent won out. Why should it be any different this time?
(only half tongue in cheek that last bit)
I'd download and read the new and revised terms post 2008 k up on the markets and the Euro falling?I've got an offset mortgage against which all my saving sit. I looked into what happens last time round in the event of problems with the bank and the answer sensibly enough was that you'd lose the liquidity of your savings, they'd just be written against your outstanding mortgage debt. I can live with that. But if you've got no credit card debt is it best to have some gearing given that the value of that debt may devalue in the event of a crisis?
On thing that was clear during the last crisis was that the imprudent won out. Why should it be any different this time?
(only half tongue in cheek that last bit)
That can't be right though as that means if I'd offset say 240k of a 300k mortgage I'd potentially have 160k at risk? The'd have to wrestle the house and any further mortgage payments from by cold dead hands if that were the case.
I'm not in this position, but I'll check with them again though.
If it goes "tits up' the Chinese are as screwed as anyone. They rely on others' debt as well as exports. Their middle class is not established, therefore, they cannot survive spending internally. The middle class will not grow until there is a foundational change in government. Military-wise, they cannot go much past their borders, so that is out as well.
Gargamel said:
No students of history on PH then ?
How did the Weimar recover, how does any nation recover from a complete breakdown in the country finances.
So, if things go really bad, we as a nation declare bankruptcy, don't pay anyone anything. ever again.
We print new bank bills - say 10,000,000 "pounds" and we back them with either gold or land vouchers, the land owners are then given a part of this money (eg everyone with the backing of a land asset.) we could then issue derivative money based on a notional percentage of the "asset backed currency"
After all paper money is easy to reproduce.
However that only deals with local trade and bartering, it won't persuade a Chinese Factory to ship you anything.
The theory is sound, a could work at a global level, but I suspect in practical terms it would never work. A slim line Gold Standard would be the way to go at a global level.
It's not that simple. Weimar Germany 'recovered' as a result of Hjalmar Schacht's creation of the Rentenmark which was a currency based on Land values, as you say. How did the Weimar recover, how does any nation recover from a complete breakdown in the country finances.
So, if things go really bad, we as a nation declare bankruptcy, don't pay anyone anything. ever again.
We print new bank bills - say 10,000,000 "pounds" and we back them with either gold or land vouchers, the land owners are then given a part of this money (eg everyone with the backing of a land asset.) we could then issue derivative money based on a notional percentage of the "asset backed currency"
After all paper money is easy to reproduce.
However that only deals with local trade and bartering, it won't persuade a Chinese Factory to ship you anything.
The theory is sound, a could work at a global level, but I suspect in practical terms it would never work. A slim line Gold Standard would be the way to go at a global level.
'The Rentenmark has saved the day, Our hero Schacht has shown the way!'
There are differences however. This route was attempted in Revolutionary France with a land based currency called the Assignat. The Assignat, at least at first, could actually be exchanged for land. It went tits up, amidst property inflation, banking fraud, extravagant spending by a few, in other words conditions extraordinarily similar to today in America.
The difference with Schacht's scheme was not what he did, but how he did it. The German inflation was caused by the demands of the victorious powers of WW1, particularly France, for reparation on an unrealistic scale. What they attempted to do was inflate their way out of it and pay them in worthless notes. A currency is worth what people believe it is worth. It may be based on the rental value of land, but if it is then in the hands of politicians who do not attempt to abuse it, and you have a population which actually believes in working for a living, of which Germany is one of the few examples, you have a viable currency.
Of course, the Weimar republic was not saved, because having extracted itself from the reparations problem, the Great Depression, which like today was created by people and governments finding ways to 'create' and then spend non-existent wealth, floored it. Schacht became head of the Reichsbank under Hitler, and what he then did was tactically and strategically brilliant, a true economic miracle. To quote Hitler, Schacht really knew how to screw people, mostly foreign investors and those who were trying to take money out of Germany. Unfortunately Hitler then spent the proceeds attempting to dominate the world, so Schacht's work was in vain. We don't have any Schachts today, all we have are political pawns who do as they are told and fill their boots. And we are not all Germans, or there would not be a problem.
If I was Angela Merkel, I would offer to buy the Aegean Islands from the Greeks, at a Billion a time.
WhoseGeneration said:
Interesting post, that seems to deny that which defines a Nation.
Which, of course, is the base problem with the EU.
Nationhood is nearly as irrelevant in the modern world as politics and religion. We're heading towards one world. The only real question is whether we continue fighting against it or embrace it and make it work. Which, of course, is the base problem with the EU.
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