Our banks 'have to lend more'

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SamLinder's picture
SamLinder
Status: Diamond Member (Offline)
Joined: Jul 10 2008
Posts: 1499
Our banks 'have to lend more'

http://www.bbc.co.uk/blogs/thereporters/robertpeston/

Although this story is about British banks, it is absolutely applicable to all banks around the world. It's an interesting take on why the credit crunch has spread world-wide.

Walterahjr's picture
Walterahjr
Status: Member (Offline)
Joined: Jan 4 2009
Posts: 1
Re: Our banks 'have to lend more'

Our banks absolutely must lend more. They must lend more responsibly.

RubberRims's picture
RubberRims
Status: Silver Member (Offline)
Joined: Nov 22 2008
Posts: 145
Re: Our banks 'have to lend more'

On Thursday UK interest rates will most likely be dropped by 1.5%. There is still money being spent in the clothing sector, it just is not being spent with M&S or on high priced goods. Take a look at trading figures for Primark and Internet sales. Sales over the Internet are up on last year. So what does this tell you? That the virtual world of cyber shopping will fair stroner sales in the years to come.

Obviously over time the high street will have a fire sale with to let signs. Good time perhaps to be investing in delivery companies. The goods we buy, at what expense to the impoverished worker who toils at our expense. “Who really cares?” Do we think? No we look to save and manipulate cost. In this fashion we may see a small deflationary curve with regards to some goods. Though It will not last long as the unseen workers will suffer more.

As monetary values decline because of globalisation, we are going to see nothing less than a restructure of global wealth. My personal feelings are I just would like to disenfranchise myself from the entire prefabricated political capitalist system, and wait for something new to arrive. No, lending more is not the answer to this problem. It may have escaped your notice, but most companies operating in today's business models are not cash rich. Instead they are heavily in to unsustainable debt.  

Most of the companies you will see weathering this financial cycle will make it through the next two years because they are cash rich, and have seasonable cash flow and assets.   

Lending in my opinion is the cardinal sin. Banks are now going back to old world principals and doing just that being responsible.

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Why should people be required to borrow more?

By stating that banks must lend more, the desired result is that people must borrow more. This is an inherent problem of our "interest-debt" system - we have to perpetually borrow more and more.

This is evidence of a terribly flawed system rather than some suspected failure of banks and consumers.

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