The Tosser Within

The UK base interest rate went up to 5% this month.

Boo!

But average house prices went up by 8%.

Which presumably means that, as a UK homeowner, I must be somehow, er, richer

Hmmm…

It’s a funny game this interest rate lark. Eight democratically unaccountable people sit in a room in the Bank of England and basically get to decide how much debt the rest of us can be induced into taking on and whether we are able to service that debt afterwards.

And for quite a few years now they’ve decided that an absolutely stonking amount of debt is a very good thing indeed.

And when they get round to deciding that there’s enough debt out there they’ll jack up the interest rates some more and fuck a few million people six ways from Sunday...




By no stretch of the imagination could I be considered a fan of banking and bankers.

But, it has to be said, that they are clever, clever bastards

I remember the first time someone explained to me how fractional reserve banking works – bank customer deposits £100 and bank pays 4% interest, bank then lends £1,000 off the back of that £100 and charges 7% - and saying to myself ‘That’s fraud isn’t it?’

Well, it is isn’t it?

I mean if the banks are just allowed to make up money and charge interest on it why can’t we all pay them back in kind with our own made up cash? Paying off your mortgage with Monopoly Money sure would beat having to do a shit job you don’t like very much or run the risk of having your house taken away from you because some c^nt in the Bank of England decides the interest cost of fantasy pounds, in terms of your labour, will be higher this month.

That’s where Keynes went wrong. His idea that economies could be sustained in troubled times by governments simply printing money and burying it for people to dig up and spend is so obviously nonsense. What Keynes should have advocated is private companies rather than governments being allowed to create money out of thin air and charging a premium for it rather than simply giving it away. That makes much more sense.

There is, of course, the small issue of the problems associated with there being too much made up money in circulation. Prices are bound to go up.

So maybe my flat isn’t worth 8% more than it was last year? Maybe the pound is just worth 8% less?



Of course, that can’t be right as inflation is only running at 2.5%.

I know this is so because the government tells me so.

But house prices are rising at 8%?

Domestic energy bills have risen by 38%?

The cost of pretty much all the necessities of life seem to rising at a way faster rate than 2.5% and if you start to factor in the impact of interest rate rises and the disproportionate impact increases in indirect taxes have on low to middle income earners it does seem to be much harder to make ends meet than it was, say, ten years ago.

Off the top of my head, it’s hard to believe that anyone could possibly believe that inflation is only running a 2.5%. Unless their lifestyle is based on the existence of a burgeoning army of low-paid migrants, consumption of cheap imported crap from 3rd world sweatshops and filling in any shortfalls in their personal finances by not providing for their future and loading up on personal debt

Oh…

Ooops

Still, no matter, everything will be fine unless the bankers jack up interest rates, constrict money supply and bankrupt a shit load of people who will then have to flog whatever they own for pennies in the pound to people who were clever enough, or well-informed enough, to get well-clear in time.

Just as well that sort of thing never happens. Well, only occasionally.

I still fondly remember back to 1992 when interest rates went up from 10% to 15% in one day and all the homeowners I was working with, people already hit by a slump in property prices, were sitting there, ashen faced, twiddling with pocket calculators, trying to figure out what the fuck they were going to do. Everyone was having a right old laugh I can tell you.

Negative equity means never having to pay off a £200,000 loan on a £200,000 property when a £300,000 loan on the same property at a higher interest rate will do.

And you’ve got to ask yourself why is your average punter so fucking pig ignorant of how money and credit work. Is that ignorance accidental?

Anyway, I mention all of this because of a bizarre wee website, dedicated to cautioning people against excessive spending and debt, that I’ve just visited…

Sort-It

I strongly recommend visiting it if for no other reason than to watch a video called 'The Tosser Inside'…


'Inside all of us lies a conniving dirty little parasite; the tosser within. He wants you to spend, spend and keep spending until you're in terrible debt. Ignore the tosser inside you.'


Curiously, the video makes no mention of the Outer Tosser(s)...

Outside all of us lie conniving dirty little parasites; the tossers without. They want you to spend, spend and keep spending until you're in terrible debt. Ignore the tossers outside of you.

What makes this all so bizarre is that Sort-It is the work of the Conservative Party (!?)

Trust me, when the Tories start putting out material that holds people personally responsible for the obscene profits of the UK Financial Services Industry someone in a position to know really is expecting the shit to hit the fan.

The sooner we all go back to using tally sticks the better IMHO.