You want to save!...With us!... It'll cost you!

[Workingman]

That's the new idea from the deputy of the Bank of England - negative interest rates.

Banks will have to pay the BoE to store their money, making it more profitable for them to lend, or so the thinking goes. Well, that might not be such a bad idea, in BIG banking circles, but it will be a bit of a disaster for us little guys when the banks pass these costs on; and they will.

[cromwell]

Right then.
Lets DEMAND to be paid in cash every week, and the banks can go to hell. Lets see how they like that.
The world and everyone in it is being forced to accomodate the wishes of these b$tards and it is wrong.

[Workingman]

Mattress space for sale - no coins! Form an orderly queue.

I sort of understand the rationale, but why would it work?

Why would it make the banks be more likely to lend to Bob and Mary whose 'Wonderful Widgets' failed the Dragon's Den test? They might sound wonderful to Bob and Mary but have no commercial value.

Why would the banks lend mortgage money to anyone, in whatever position, in a lot of High Street stores? The housing market is about flat and the high street is not safe.

[TheOstrich]

Don't forget that the banks have been forced to put more money away under their own mattresses to meet imposed liquidity / reserve conditions - hence less available for lending.

[Oojamaflip]

My girl lives in Oz, and it's the norm there to pay for the 'privilege' of having a bank account.

[Suff]

As it is in France.

Also French accounts allow the princely sum of £350 per WEEK to be drawn out of a standard checking account when abroad......

UK banking is less regulated and more open than almost any other in the world. However the whole point is that the banks never told the truth. The truth was not available then and is not available today. They hold the money because they never told the world they went down for £500bn (not the £70 odd bn the government paid out), so they have to keep on holding cash, not lending and praying that the debt (distressed assets), will slowly expire over the next 5 decades so they don't have to own up and be refinanced (again).

No amount of chivvying by the BOE will make the banks lend because they don't have the money. If they do lend they have to open up the reality of their assets, on which they base the lending, which simply do not exist.

When AIG failed in the US, the government came in to take over. The auditors worked all weekend to try and find out the net position of the institution and find out how much money they actually had to inject to stabilise it.

By Monday morning they had No, NONE, Zero ide of the position of AIG in terms of debt and liabilities. In fact they had even less of an idea than when they started on Friday night.

That is the reality of the banks and financial institutions. You can't fix them until you actually admit how broken they really are.

Brown's BIG LIE still lives and until we either bury it or admit it, we can't move on. If we don't Admit it, then my Grandchildren will still be living in an age where the economy is fragile and banks don't lend for mortgages and people can't realise their capital because nobody can raise the money to pay for it......

More pitifully weak and useless moves from the BOE/FED/ECB coming to a TV screen near you RSN....

[Workingman]

No amount of chivvying by the BOE will make the banks lend because they don't have the money. If they do lend they have to open up the reality of their assets, on which they base the lending, which simply do not exist.

But surely that is the result of making money a number, to be traded like wheat?

There was a time when banks held real assets, be they deeds on property or lands, or shares in 'real' profit making companies or similar. Nowadays money is made by trading money. If I sell X at 1 and buy it back an hour later at 0.97 I have made 0.03 times whatever X was. Nothing was made, nothing tangible was traded, all that happened was that someone said "Sell, sell sell!" and a bit later someone else in the same line of work said "Buy, buy, buy!".

"Money" has no real value any more.

There was an interesting article on the BBC the other day: 'The coin worth less than any other in the world.' Everything was valued against the US Dollar.

Get this: "In Tanzania it's unlikely to find the five-cent coin in circulation because it literally cannot buy anything. The smallest you would probably find in the streets is 20 cents and you can buy a bunch of spinach in the local market for this."

There are 325 Tanzanian cents to a US cent, so it is worthless, right?. Yet for 20 Tanz cents you can get a bunch of spinach. Can you do get 81 bunches of spinach in the US for one cent? No!

So which is worth more?

http://www.bbc.co.uk/news/magazine-21572359

[Suff]

So which is worth more?

Well now that just depends on your perspective doesn't it.

In the US, approximately 100 $cents will get you 1 litre of petrol
In Tanzania, that would be 3,250 Tanzanian cents.

So if you are a poor subsistence worker in Tanzania with no electricity, running water, car or any amenity from the 1800's onwards, then your Tanzanian cent is worth more to you. If you have ANY level of modern living at all, it is worth significantly less. What this says about Tanzania is not that the cent is worth more than US$ but that the divide between poverty and wealth is 1,000 times greater in Tanzania than it is in the US or the UK. They have TRUE class and wealth divides.

You could go to Tanzania and live like a king on a British pension. British people forget just exactly how their standard of living for the workers has changed and the fact that there really is no true divide any more, it's more a matter of comfort levels than poverty levels.

On the money front, yes you are right, they make money by playing with money. It's the only way they could double the GDP of the world in 5 years without inflation (so they say). 99% of the doubling was just money chasing money. It made some fabulously rich and austerity is the tool by which they remain fabulously rich.

Hence the LIE and the fact that Banks can't lend, because they would have to admit how much of a lie they have been living. The fall would be worse than 1929 and we don't want that do we? So we all live in a twilight of mediocrity until the funny money washes out of the system. Natural doubling of world GDP would take 25 to 50 years at current interest rates, so there's quite a way to go in terms of fixing the mess. Of course it's all made worse by governments constantly having to borrow money, which just makes the whole situation worse and longer to fix. With current levels of borrowing it won't take 25 to 50 years it will take 200 to 300 years.

Of course if you don't care, stick your fingers in your ears, hum a lot and vote for anyone who promises to sort the mess out in the next 3 years, things will seem to continue the way they have......

Welcome to the modern world, where truth has no value and whatever you are told is the "New Reality".