After repeated warnings from BoE about the surging pace of lending to households, British lenders are planning the biggest cutback in consumer loans in nearly 10 years (BoE's quarterly net balance of lenders' expectations for the availability of unsecured lending over the next three months fell to -28.6 from -16.2.)...Zero Hedge
British Banks Forecast Biggest Consumer Credit Collapse In 10 Years
Tyler Durden
7 comments:
Yes, it will collapse because capitalism as it's practised in the West at the moment doesn't work. As it says at Zero Hedge, wages are going down while debts are rising. Neoliberalism is hollowing out wages and unless the industries come back, wages will plummet further.
What increases the standard of living is products (and nice houses) but the products are increasingly made abroad. But if we leave the production of products to countries like China, then we need to sell them something back in exchange, but we don't make any products, so that leaves only services. But what services do they buy, other than some software?
We were told that the mark up came from manufacturing goods made from raw materials bought the third world. We buy the raw materials cheap, and then we use our fantastic science and technology to produce products that we can sell back to third world countries. At the beginning the third world countries had no use for their raw materials, like oil, but we developed the technology and then bought their raw materials. You would think that the countries that had the raw materials would produce their own products and technology and have a fantastic economic advantage over countries that just produce the products, like Japan, but this doesn't happen, which is another subject. Something to do with colonial rule and empires.
So we made our wealth out of the mark up from making products, but now the products are made abroad, so we were told the mark up in services would be better and our standard of living would rise, but that didn't happen, excerpt for the One Percent. The middle and working classes are trying to maintain their standard of living by working longer hours and borrowing money to invest in housing which is causing a bubble. They also borrow money for cars because they need them for work, and they might borrow for their kids education and holidays. As the middle and working class buy the products which the One Percent now make abroad, all the wealth that the middle and working classes accumulated over this century gets transferred to the mega rich. Its an economic system that can't work, so Western civilization is being destroyed.
Kaivey,
Brent has collapsed by half over the last few years (terms of trade) and devalued the GBP... so UK productivity is going to ofc go down when there is a large price collapse like this...
Productivity is (total production in GBP)/ work in
Numerator has collapsed while ofc still takes the same amount of work to produce so denominator stays constant...
The rate at which banks increase credit outstanding into an economy like that may have to decrease for a while in response...
to be clear, credit is still increasing, it is just not increasing at the previous rate...
btw this is similar to Warren saying credit is collapsing for years meanwhile it has been going up just not as fast as a previous rate...
Progress is measured by velocity not acceleration....
IIRC, a lot of the charts that Warren has posted show a downward sloping curve rather than an upward sloping curve flattening.
If you are charting the rate of change vs time and it decreases from 3% growth rate to 2% growth rate the line will slope down but you still have growth.... it's just not growing at the same rate as before...
We are not arguing 1st and 2nd derivative changes on MNE. We must draw the line on free speech somewhere arbitrary and this is where I draw it.
:)
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