England UK

Maria wrote:
> On 28 Sep 2006 01:47:36 -0700, aiguru@lycos.co.uk wrote:
>
> >Be afraid. Be very afraid.
>
> I'm not sure about that. Britons do borrow more than Europeans anyway
> - maybe they are comfortable using credit these days. All they are
> really doing is operating their households like people would run a
> business. They may not be spending the money wisely (in that they are
> not expecting to make a profit in the long term), but what does it
> matter?
> I'd also like to think that cheap and easy credit has partly done away
> with the usurers who exploit the poor (provident loan APR 177% for
> example). I don't know if it has - there will always be a core of
> people who can't get credit no matter what unless they go to some thug
> or other.
>
> >And if you are not, then remember that the New Labour project was about
> >getting elected and holding power come what may - even at the cost of
> >their traditionally held principal and free speach within the party.
> >
> >So whatever awful things they are associated with (government
> >scientists suicide, bungs for policy on cigarette advertising, Iraq,
> >"loans" for peerages, or anything else - they are not going to tell you
> >that they are afraid even if they are. They're just going to smile and
> >say how wonderful things are.
>
> Do you think that Bliar somehow arranged for all this cheap credit to
> be offered to people?

Slashing interest rates after 9/11, the yen/euro carry trades, and lax
lending created the debt fuelled spending boom which is now drawing to
a close leaving record private debt of £1.3 trillion, record public
debt, a record trade deficit, rising unemployment, bankruptcies, and
repossessions, growing inflation, and rising interest rates.

As over 50% of the UK economy was based on consumer spending the
slowdown/credit crunch ahead augurs badly for UK plc. The house price
bubble that grew out of cheap,easy credit fuelled further spending
through MEW (mortgage equity withdrawal) but recent figures suggest
that most MEW now is used to cope with unsecured debt. Expect this
bubble to pop soon.

A huge number of Brits have had their spending party but it's now
coming to an end with potentially grim consequences for many
individuals and for the economy as a whole.

> >And if an "economist" tells you not to be afraid, ask him about
> >Kontratiev. Ask him to deny what Kondratiev said. Then tell him to
> >shut-up.
>
> Who's Kontratiev?

A Russian economist, Nikolai Kondratiev :
http://en.wikipedia.org/wiki/Kondratiev_wave

http://www.housepricecrash.co.uk/forum/index.php?act=SF&s=&f=22