More than half of families are struggling to pay back their debts, research reveals today. It follows a warning yesterday from the Bank of England that the cost of living is set to soar – tightening the financial squeeze on a nation already in the grip of a household debt crisis.
The Bank’s Governor, Mervyn King, blamed soaring commodity prices, rising power bills and the planned VAT hike to 20 per cent on New Year’s Day for his warning on future price rises.
The warnings over the £1,455billion personal debt time-bomb came as the Bank warned inflation will rise and remain ‘elevated’ for longer than it predicted just three months ago
The number of people struggling to pay their mortgage has nearly doubled during the past year, a housing charity said today.
Almost a fifth of homeowners said they now faced a constant struggle to keep up with their home loan repayments, up from just 10 per cent a year earlier, according to Shelter.
The group warned that the situation was likely to get worse going forward as interest rates rise, unemployment increases and inflation remains high
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Afraid this is the inevitable consequence of risky lending, irresponsible financial decision-making by many people during the bubble years and in the longer term the transition from abundant industrialism to the structures of scarcity industrialism.
Peace always has been and always will be an intermittent flash of light in a dark history of warfare, violence, and destruction
I was once told that most family businesses go bust inthe third generation.
1st. Motivated individual works hard and creates a successful business
2nd. Their kids see and understand the sacrifices of their parent and learn the ropes under their guiding hand.
3. Grow up thinking they're entitled - expect everything on a plate and the business folds...
It's not just economies either how many champions worked hard to get to the top then lost their edge as they sat back and enjoyed the sweet life.
I think these is analogous to the situation we in the west find outselves in now when competing with growing economies of the East. Still, it's not everyone is it - The scandanavians and germans seem to be doing pretty well - so what is it about us?
Easy credit, poor financial education and the need to, out do the Jones's, have driven many into the debt trap.
I've heard rumours that the "average" adult owes £3000 on credit cards - if they are that irresponsible with their personal cash - how can they be expected to understand the need to tighten our belts as a nation?
I sometimes wonder about the wisdom of democracy - where the government are trying to deal with long term issues - but having to play to the cheap seats every 4 years!
DaveB wrote:I was once told that most family businesses go bust inthe third generation.
1st. Motivated individual works hard and creates a successful business
2nd. Their kids see and understand the sacrifices of their parent and learn the ropes under their guiding hand.
3. Grow up thinking they're entitled - expect everything on a plate and the business folds...
.......snip..
I heard that too, and I think there is a load of truth in it.
My family's business is now in its 4th gen. However the pass to the 3rd gen went to a son-in-law and I guess that meant less of an entitlement feeling and a greater need to proove worthiness.....! Also it's not a massive business!
We did however have a great celebration a dozen or so years back when it hit the centenary year. The original business and the one 100 years later did almost none of the same things! Loads of re-inventing with each new lead!
Wonder how long it'll last in the current climate!
DaveB wrote:It's not just economies either how many champions worked hard to get to the top then lost their edge as they sat back and enjoyed the sweet life.
I think these is analogous to the situation we in the west find outselves in now when competing with growing economies of the East. Still, it's not everyone is it - The scandanavians and germans seem to be doing pretty well - so what is it about us?
Easy credit, poor financial education and the need to, out do the Jones's, have driven many into the debt trap.
I've heard rumours that the "average" adult owes £3000 on credit cards - if they are that irresponsible with their personal cash - how can they be expected to understand the need to tighten our belts as a nation?
I sometimes wonder about the wisdom of democracy - where the government are trying to deal with long term issues - but having to play to the cheap seats every 4 years!
DaveB wrote:
I sometimes wonder about the wisdom of democracy - where the government are trying to deal with long term issues - but having to play to the cheap seats every 4 years!
The sad truth about democracy is that even though it fundamentally does not work, for precisely the reason you've suggested (you only have to ask yourself how any democracy would cope if it was presented with the sort of population problem which forced the Chinese to adopt a one-child policy), all of the likely alternatives are worse.
jonny2mad wrote: it could also be that the system is set up in such a way that everybody cant pay off their debts, because there is more debt than money.
Most sane people would assume that the world financial system couldn't contain more debt than money; that it had to be a zero sum game, albeit with a vast unwinding to do. Apparently not, coz banks seem able to lend out, at interest, multiples of their capital (i.e. money they don't have). Not only that the markets seem to value these banks mostly on how much money they have invented. Fine in bubble times, not so good if these debtors can't pay back their loans.
DaveB wrote:
I sometimes wonder about the wisdom of democracy - where the government are trying to deal with long term issues - but having to play to the cheap seats every 4 years!
The sad truth about democracy is that even though it fundamentally does not work, for precisely the reason you've suggested (you only have to ask yourself how any democracy would cope if it was presented with the sort of population problem which forced the Chinese to adopt a one-child policy), all of the likely alternatives are worse.
As the man said:
“It has been said that democracy is the worst form of government except all the others that have been tried.”
I think that a major part of the problem is that almost everybody who seeks political power, be it via force, manipulation or getting elected, is the sort of person you don't actually want in power.
UndercoverElephant wrote:I think that a major part of the problem is that almost everybody who seeks political power, be it via force, manipulation or getting elected, is the sort of person you don't actually want in power.
No, I think its more that the public want something for nothing, are hypocrites and therefore those who pander to that win. Those with principles never get far up the greasy pole.
it could also be that the system is set up in such a way that everybody cant pay off their debts, because there is more debt than money.
