Posts Tagged ‘economy’

Fit For The Twenty-First Century

May 23, 2009

 Can there any longer be any doubt that our political system in the UK is broke? Or that the world financial system is broke? Or our economy, or the way we allow companies to be our bosses? They say ‘if it ain’t broke, don’t fix it’. But what we need to know now is what to do when it IS broke!

 One thing that is not broke, even if it is limping rather seriously, is our democracy here in the UK and those throughout the world. And in theory we run it all through democratic process. I mean, well, we DO – don’t we?

😉

OK, take out those that are seriously adrift, like Zimbabwe in the hands of the most evil of people: Mugabe. And be a little kindly to the emerging ones like China.

We are left, frankly, with an awful lot of dross! Here in the UK we have our daily feast of a Parliament in crisis, courtesy of the Daily Telegraph (fully justifying the freedom of the press); and the media’s status as the fourth estate.

In America as well as here the sights of incompetent bankers being rewarded for their reckless and criminal gambling and of businesses that should have folded decades ago being massaged back to life in intensive care leaves one wondering where our leaders minds are.

We cry for heads to be put on pikes in traditional style and for the tumbrels to roll again.

But we have an opportunity. An opportunity that comes rarely. A chance to bring our democracy – not to some golden past that never existed – but further towards a golden future that urges us on in hope.

And democracy is about DEMOS, the Greek word for people or populace and now to represent democracy itself. We are Demos and the democracy is ours; as always the Greeks really did have a word for it.

I have been seriously distracted for some time; there are many things that I wish to put before you, about debt matters, about this list above, about a new approach to a constitution, about the need to completely rethink company law.

Much of this must be essays, and I will put those on my website, Control Your Debt Crisis ; but I will run a long series here as an introduction to those ideas. For a real discussion of all this I will set up a forum which will be readable to all, but will ask people to register to contribute [spam makes that necessary] in which I hope we will find lay people and experts discussing how to get from where we are to somewhere a lot better.

To a place, in fact, fit for the 21st Century.

Joseph Harris

Debt Control Man

Hold on to your cash

April 22, 2009

I do not often discuss the wider economic picture here. This is because there is enough to discuss on issues of how to control one’s own affairs.

But I do feel that this is one of those times that wider events are going to impact on exactly that, and quite seriously.

My view of the direction of the British and of the world economy is extremely bleak. For me this is no recent conversion. For as long as I can remember I found the idea of exponential growth in a finite world merely disaster waiting its opportunity.

It is my belief that now the changes will be quite dramatic; if they are understood then there can be an orderly and planned move to the changes.

But in the interim you and I need our wits about us. And the first move is the opposite of the ‘wisdom’ from official circles. You need your cash more than some over-exposed company. You have no duty to spend. Rather you have a duty to think how you will manage in the next years if there is a drop in your income.

And – unless you are one of the few lucky ones – your income will not rise and is most likely to fall. This will look acceptable as deflation operates for a few years. But the actions of governments, and the continued thinking – that if you are in debt you should borrow your way out – promises a massive inflation following on from that.

In terms of debts and repayment, my advice is to is to ensure you have kept in your own pocket everything you possibly can; and I give advice on that elsewhere. While it may feel like a good idea to repay debt as fast as you can it may not be your best approach at this time.

In view of the difficulties ahead I may write more on the wider picture, but for now please think very carefully when faced with any expenditure – including repayments.

Joseph Harris – Debt Control Man
author: Control Your Debt Crisis on Your Own Terms
site: http://www.controlyourdebtcrisis.co.uk

The Interest Rate Puzzle

August 13, 2008

The indication by the Bank of England, that Bank Rate will be unchanged tomorrow, could be good, bad or unimportant to you. Which way it should go is a matter of opinion. I believe the threat of inflation has been completely underestimated and the depth of sickness of the economy not understood.

Perhaps you need a long memory to even fear big trouble, or perhaps pessimism informs me more than facts. My underlying advice is, however, hold on to your hat; there are strong winds coming.

Because of this I think it vitally important to understand what is happening in interest rates and to make the appropriate protest—I have already written five posts on that and gathered them into a page on this blog.

But if Bank rate has not moved for some weeks why are Credit Card companies in particular pushing rates up, even for their best customers? Might it be to get customers to pay for the banks own mistakes in gambling on investments?

Just opportunism, perhaps? Or perhaps the old yachts are worn out…

But enough of my sarcasm…

What I am really concerned about is the difference between Bank Rate and the interest rate charged on credit cards. Even if we add the inflation that affects banks, ‘headline’ inflation now around four per cent, that still doesn’t make 10% and hasn’t for a long time.

Apart from the few cards that add only five or six per cent, and they do have costs and need to make some profit, the general view has seemed to be that an addon around 10% is a generous minimum. Perhaps with the odd low rate for some part of the loan or a nought per cent transfer period that can be justified. Perhaps.

But what of the card that shot its rate from around 19% to around 30%? Had headline inflation moved 10%—or the Bank Rate?

Of course not. But losses had started appearing; strains of various types. You may have noticed your card(s) taken over by a bank, or taking over another card. That has been going on for about three years, and now with increasing frenzy as one wonders how many card funders there will be in a couple of years.

Like every other finance area the rules for lending became sloppy, the assumption of ever increasing growth a mantra. And why not? Didn’t Gordon—our very own Prudence—have everything under control. [At this time there are no prizes for the answer. Hands up those who realised in 1997, when he destroyed the regulatory framework, what must happen!]

The interest rate movements are by no means limited to credit cards, and there has been movement that it would be hard to justify in many other areas. The mail order catalogues have long made me wonder. Not so many years ago most did not charge interest to customers at all.

Those that did had an incredible rate of 29.9%, and that appeared to follow the earlier consumer credit system of hire purchase. Now hardly a catalogue has not made the main company a credit company with rates of 29.9%; one charged an absolutely horrendous 39.9%.

Now I see another, that long offered 29.9%, has joined these Olympian heights with a rate of just below 40%.

And that has a great deal to do with debt experience; 29.9% is like adding one third to the bill, depending on what type of loan we are referring to. Which means more of your hard earned money goes to the company and getting out of debt and avoiding default become harder and harder.

If you are subjected to an increase in your rate which you do not think is justified please contact the company and ask for the rate to be reduced, or to explain to you in writing, with justification, what the increase represents.

You might be pleasantly surprised.

Joseph Harris
Debt Control Man