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lupestripe) wrote2011-03-22 07:33 pm
Fiscal Fisting
Current CPI rate of inflation - 4.4%
Current RPI rate of inflation - 5.5%
Current rate of interest on my savings - 2.9%
I can't help but feel that the prudent ones amongst us are suffering for the avarice and greed of everyone else. Whilst the value of my savings decreases so does the value of the debt of those who took out loans and mortgages they could ill-afford.
I have a student loan, whose value is also decreasing over time (which is the only positive at the moment) but the worst debt I have ever been in is an overdraft of £800. Consequently I do not benefit from the current economic conditions and the message appears to be to get yourself into eyeballs of debt as you will not suffer as much as those who are sensible.
In a country which has a mantra of property is king - the rise in house prices over the last decade resulted in many people over stretching themselves and this is now the main barrier preventing a rise in interest rates as it would force many people to default on their mortgage. So prudent people like me must suffer interest rates on our savings which are wiped out by the rate of inflation. I have no intention of buying a house any time soon.
Not even stocks and shares ISAs will be sufficient now nor accounts in which you lock your money for a number of years. Clearly I made the mistake of not spunking all my money on material goods - I now know for next time.
*In response to some of the comments below, I will further the above by saying many people with mortgages were merely responding to market conditions. They shouldn't have been offered mortgages that they had no realistic way of paying back and the blame here should largely be laid at the banks and the previous government's lack of regulation. However, it was clear this country was in a property bubble and taking on such mortgages was a decision that these people made and some responsibility should lie at their door. Despite this, I think it was more down to market conditions than greed, a comment I reserve for those who have high credit card and store card debt etc. I probably should have checked this post before posting it but my bus had just arrived then my phone battery died - as crap as an excuse as that is.
Posted via LiveJournal app for iPhone.
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You're getting more and more like me every day.
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But yes it seems pretty obvious the system was corrupt and due to implode, and those running the show, who I consider for their enormous financial rewards and awesome responsibility bloody well should know better, are more responsible for the mess than Joe Bloggs is for taking advantage of the credit they offered. You can't throw away your money and then complain that it's the fault of those who took it when it's all gone. It's just a nonsense argument. If it wasn't offered so irresponsibly it wouldn't, nay, it couldn't have been taken so irresponsibly. Ergo the system screwed everyone, IMO.
(I gather this is more applicable in the US, although I've certainly read reports of UK lenders convincing borrowers they can pay back ridiculously huge mortgages too)
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Plenty of us are innocent, but we're just collateral damage of other people's irresponsibility. Borrowing is an evil necessity, but we know the risks and sometimes we're going to get burned.
Sometimes society just has to admit that we as a collective didn't do enough together to make excessive borrowing a taboo. I'm ready to hold up my hands and accept my share of the blame and learn from this experience. Next time I see a friend living beyond their means I'll make clear I disapprove rather than say nothing, least I'll have played my part.
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