£1 Trillion Consumer debt!

[Rave]

Overall I'm pretty much exactly evens. I have about £600 of my student loan left to pay and I've an overdraft, but a friend of mine owes me a load of money. I've had to bail him out because he did get into serious debt by just spending and not worrying about the consequences. He now earns enough to pay his debts off fairly easily, but his credit rating is so poor that it's hard for him to even open a bank account.

I don't earn enough to save anything up, although I'm the major breadwinner in the house ATM because my wife is only working part time while she finishes her degree. Thanks to years of short sighted government, I'm in the position where I really hope there is a serious depression and house prices crash; I can't afford to buy a house otherwise. Annoyingly, I thought that as a civil servant I'd be protected from losing my job, but thanks to cutbacks it looks like that might not be the case. The thing is though, for as long as we as a country continue to pay the interest on the loans we've taken out, the people financing us will have no reason to call them in. If it's true that we're being financed by the far east, then it's possible that wobbles in their economies could have a more serious knock on effect in ours. Still, if they are lending us the money to buy their consumer goods, then it's win win for them as far as I see it.

Economics makes my brain hurt.

Rich :¬)

[Richie]

A debt is a debt.

Not being funny but I personally dont see these 2 as "debts"

I bolded the important bit in my statement to make it clearer as it seems to be missed.

If the guy in Japan decides he wants his money back, and your bank are short of a few quid...

Then you go to the ATM to get some money out on a friday night and...

My loan is not with a UK bank as such (egg.com) but even if it were, there is a signed contract for a period of the loan including monthly payments so the bank cant just "call it in" when it suits them or they are in breach of contract.

If I have a lona for 2, 3, 4 etc years then its for 2, 3, 4 etc years and they cannot change this. The person with the loan CAN end it earlier by paying it off as this is in the signed contract as a condition.

[DaBeeeenster]

I bolded the important bit in my statement to make it clearer as it seems to be missed.





My loan is not with a UK bank as such (egg.com) but even if it were, there is a signed contract for a period of the loan including monthly payments so the bank cant just "call it in" when it suits them or they are in breach of contract.

If I have a lona for 2, 3, 4 etc years then its for 2, 3, 4 etc years and they cannot change this. The person with the loan CAN end it earlier by paying it off as this is in the signed contract as a condition.

Erm, Egg are basically a brand of Prudential, who are a UK company.

My point was not that they can call their loans in from UK customers, the point is that the UK banks/financial services firms will have contracts with their creditors, the asian banks, and they obviously have to be upheld. A default by one or two UK banks might trigger off a very nasty situation, especially within the UK.

It's not individuals that I am concerned about, it's the financial services companies that are giving me the jitters...

Additionally, a lot of loans (like mortgages) do not have a fixed interest rate. If the BoE decides to whack up interest rates, a huge amount of money is going to be affected.