shows that they have loads of money to squander
I should perhaps have made the distinction between sqandering money and sqandering energy and squandering both. I don't consider spending on reducing ones carbon footprint to be squandering money.
If you're an STW regular you'll recognise people with pretty extravagant lifestyles in terms of spending on CO2 emitting non-essentials complaining about the price of gas, and finding excuses if people suggest ways of saving money through energy saving in their homes or lifestyles that are inconvenient or don't pay back within a month. That's if they aren't plain hostile and take offence when their absolute right to pollute as much as they want at minimal cost is questionned.
And QE is inflationary, which drives interest rates up…
Why then did interest rates remain at about 0% since 2008 and have only moved since COVID and war started a supply crisis?
Cars on *average* cost 45p/mile to run - whether they do 30mpg or 70mpg - when you account for all costs
Work out your costs on 45ppm, not mpg which only looks at a small part of the cost of using / owning a car
What about the costs of leaving the car stationary whilst you're on the train?
It amazes me how many people on here inhabit some low interest rate la la land. Chronically low rates have only served to make the poor poorer and helped fuel the massive wealth inequality that society now suffers from.
It's very simple - if you (a wealthy individual or organisation) can borrow money at 0.whatever% (i.e. for nothing) you would be a fool not to, because even some crappy rental is going to give you 3-8% yield (in fact it's usually the case that the crappier they are the better the yield). And of course house prices are not going to drop because low rates are supporting the mortgage market. It's like taking candy from a baby. And the same applies to any sort of financial speculation - stocks, VC, art, shitcoins - as soon as enough people (aka the middle classes) are doing it it becomes a self perpetuating cycle (yes, a bubble).
Rates need to go back up to reasonable level in order to give the system a good cleansing and discourage so much wanton speculation. If your buisness is not sustainable in this environment then goodbye - find a new job - it's not the role of the governement to support your useless and unproductive existence. The capital markets need to be allowed to function unimpeded (but within bounds of regulation) in order for them to be efficient. Low rates have been interfering with that functioning for far too long.
Of course, there is no easy solution to all this. Too much money has accumulated in the hands of too few (good luck getting that back!) and the working classes have been screwed to the point where they are pretty much serfs once again (good luck reversing that!); but the idea that maintaining low rates and putting more money into the system can fix our problems is just crazy.
Why then did interest rates remain at about 0% since 2008 and have only moved since COVID and war started a supply crisis?
Because without QE we could have had deflation and negative interest rates during that period?
Work out your costs on 45ppm, not mpg which only looks at a small part of the cost of using / owning a car
but, further nuance, people do a variety of things in their lives.
I have a job that requires me to have a car to visit sites.
I have 2 hobbies that require a car (or, admittedly, a nearby helpful friend with a car)
Given the above, I own a car. Its a 2013. Ive had it nearly 4 years. Depreciation less than £1k per year if we neglect the post covid boom. MOT, service, maintainence £500 per year on average. Some things like tyres are proportional to milage, other things are not.
Insurance, wont change drastically with varying milage.
The cost of me embarking on an additional random journey in my car, is pretty much purely fuel cost.
but the idea that maintaining low rates and putting more money into the system can fix our problems is just crazy.
Depends entirely on where the money is spent.
Because without QE we could have had deflation and negative interest rates during that period?
But, as we now know, QE didn't increase the money supply, Think of it as Reserve Creation. it just went into the profit column of the major banks, so wasn't inflationary Printing money is inflationary, but that's not what happened.
Cars on *average* cost 45p/mile to run – whether they do 30mpg or 70mpg – when you account for all costs
Work out your costs on 45ppm, not mpg which only looks at a small part of the cost of using / owning a car
Huh, just totted it up. I always thought as I don't have a posh car, I'd be under 45p. But because I do low miles, fixed costs push me back up! In the last 3 years I've done 4500/yr, at 49ppm (that's with petrol at £1.80, which is a bit high. At £1.40 I am actually bang on 45p).
Even at 49p a mile, and even with a 30% railcard discount, once you factor in the time and cost of getting to and from the train station, with two people the car is about 25% cheaper and 50% quicker.
Thinking about some other regular journeys, if I count railcards and a car cost of 50p/m, they probably come out about even, just on the price of the rail fares. Which is quite interesting tbh. But then bus/taxi fares at each end make quite a difference.
Every now and then I run the numbers on Car Clubs, hoping our low mileage might suit them. But I can't really justify it yet. Hoping this car will last a few more years and then I'll take stock again.
Anyway. Sorry for thread hijack!
If you’re an STW regular you’ll recognise people with pretty extravagant lifestyles
You can say that again!
And QE is inflationary, which drives interest rates up…
They've been using QE since 2008 on a massive scale. How much did inflation and interest rates go up in the 14 years between then and now? The inflation we're experiencing now is not caused by QE. As with 2008 and 2020 the danger is deflation, not the opposite. Raising interest rates now in combination with no QE only increases the the likelihood of it happening and makes it worse.
And QE is inflationary, which drives interest rates up…
Nonsense - as above.
Q/E in itself is just purchasing bonds by the BoE - that is in no way inflationary. The spending that takes place before Q/E happens could be inflationary (and not through Covid) but nothing compared to the supply shocks we have had.
See Japan, or UK in the last 10 years.
but the idea that maintaining low rates and putting more money into the system can fix our problems is just crazy.
Lol - where do you think the money comes from to drive a dying private sector?
The banks didn't bail themselves out in 2008.
I'd agree cheap debt has not done us any favours overall - but it's lack of decent wages and productivity that actually drives most of our issues.
But the only way a screwed market economoy that doesn't produce much can grow is via the leverage of cheap debt. That's what's been chosen by the establishment. Of course it was going to end badly.
See 50 year mortgages for christ's sake!
Of course, there is no easy solution to all this. Too much money has accumulated in the hands of too few (good luck getting that back!) and the working classes have been screwed to the point where they are pretty much serfs once again (good luck reversing that!); but the idea that maintaining low rates and putting more money into the system can fix our problems is just crazy.
Maybe the "working classes" should pay more attention to who they vote for then...
And car vs public transport - I choose who is in the car with me.
Rates need to go back up to reasonable level in order to give the system a good cleansing
Thereby punishing those in debt and rewarding savers who have accumulated lots of cash. Is that what you mean by 'cleansing'?
it’s not the role of the governement to support your useless and unproductive existence.
Nonsense. If the govt took that attitude in 2008 and 2020 the economy would have collapsed. We're in a similar situation now. Do you want the economy to collapse? How would you benefit from that?
Of course, there is no easy solution to all this. Too much money has accumulated in the hands of too few (good luck getting that back!) and the working classes have been screwed to the point where they are pretty much serfs once again (good luck reversing that!);
Of course there's an easy solution. That's what fiscal policy is for. Tax the people/corporations with too much money, and redistribute it to the working class via higher wages and investment in public services and infrastructure. That's what happened for decades before Thatcher started to dismantle it. It needs to happen again, and can be easily achieved by a political party willing to put it to the voters.
too much money has accumulated in the hands of too few (good luck getting that back!) and the working classes have been screwed to the point where they are pretty much serfs once again (good luck reversing that!);
Of course capitalism concentrates wealth. No good for the larger society.
it’s not the role of the governement to support your useless and unproductive existence
Economy start with your government and the central bank. So it is - or it's a problem for everyone.
People have this idea that there's money swilling around from the private sector alone! The private sector can't create money in the same way the BoE can - it can only make loans and pay them back.
And car vs public transport – I choose who is in the car with me.
It wouldn't be a cost of living thread without a few "efff society, I'm alright" answers
IMO, a more diversified economy in the UK would make it less vulnerable to external shocks like the Ukraine war. BoJo should have been honest about the cost of supporting Ukraine - Putin is taking action directly against the UK here.
We need more support for Agriculture and industry eg 80,000 preferential visas for farm labourers and better access to export markets.
All the talk of low taxation / small state sounds great, but has long-term consequences. Leaving it to the market means under-investment in large projects (eg power stations), which only government can/will do.
Surely it's cheaper to pay for that now (through higher tax/more borrowing), rather than in 20 years time, when we have to.
On another note, it's not really the fault of 'Politicians'. We vote them in and out.
Near to me, a small incinerator project, run by a local firm was objected to by residents.
This would have produced low cost power for the nearby industrial estate, burning waste (mainly timber - there are lots of wood factories around). Every wind turbine development meets the same fate. So who's fault is it?
And QE is inflationary, which drives interest rates up…
The usual weapon of choice to maintain an inflation target is the bank rate. In 2008 it was lowered to 0.5% and still wasn't achieving its aim and couldn't really be cut further, so QE was deployed for the first time
QE lowers interest rates on loans which boosts spending, but it also increases property and share values. This helps people who own property and shares, but others are priced out of property and shares, so we're back to the argument that we could be increasing taxes in a targetted way so that debt can be reduced without punishing, for example, pension funds
We haven't sold any Government bonds yet but some have matured so that the overall QE total is reduced, but not by much
Even the deeply insecure who have the need to spout the I'm alright Jack and we are sorted willy wave blah blah can get caught out in a recession. Capitalism has a way of biting all sorts of people on the bum.
Back in the early 60s in south Brum not many people had cars but on th ebank holiday there were hordes of people walking over the Licky hills and enjoying a picnik having caught the bus to Longbridge or Rubery.
Was that before or after Beeching?
Was that before public transport was more expensive per mile than driving?
Was that before public transport services were cut to only the most profitable times or routes?
Must be great living in France. Again, your experience of current public transport in another country bears no relevance to someone living in the UK.
That’s if they aren’t plain hostile and take offence when their absolute right to pollute as much as they want at minimal cost is questionned.
That's really not why we take offence to your posts.
Again, your experience of current public transport in another country bears no relevance to someone living in the UK.
I suspect I've used more UK busses than you, Squirrelking, even in the last ten years. When did you last take a National Express or even local bus? The services to Longbridge and Rubery still run.
Public transport my anoos.
Apart from being eye-wateringly expensive and unreliable and having to mix with, well the public. It takes all the spontaneity out of life. Say if I just needed to nip to the local shops for some milk:
I could, go online to find the bus timetables. Then get utterly confused as there are different companies doing the same route. Then, after selling all my possessions in order to pay the kingly price to board said bus, it would take me into the city centre, where I would have to change and get another bus (should it turn up) back to my general area, as near to the local shops as it goes which is still further away than my house to the shop. And then and only then, soaking piss wet through from the rain and having been assaulted by a spice fiend and having contracted both Covid and Monkeypox can I buy my milk.
Or, I could jump in the motor and be back making a cup of tea on ten minutes.
When did you last take a National Express or even local bus?
I don't use buses because they don't go where I need them to at the speed I need them to, they're just a slower service that follows the same routes as the trains. The only exception was when Megabus ran overnight services many moons ago that were cheap and convenient for my needs. If I use public transport I'd use the train but they're still unreliable at best, if it's not engineering works it's weather, if it's not that then it's strikes.
But that's my point in a nutshell. Public transport has absolutely no incentive to use it outside of cities. That needs to change. Why does it cost me the same or less as a single ticket on the train to drive somewhere? That's before anyone joins me on my journey which significantly increases the cost per person on public transport and reduces by car.
I know from experience of travelling in Europe that the UK isn't remotely comparable.
Or, I could jump in the motor and be back making a cup of tea on ten minutes.
Or walk. Or take a bike. Imagine…
take a bike
I’d have to unlock it out of the shed then lock it outside the shop. And even though the shop is only 5 minutes away it’s downhill so I’d have to pedal back up. I don’t want to go for a bike ride I want to buy some milk.
Walk
Hahaha. Oh wait, you’re serious. Actually, I did saunter down to the shops occasionally during the heatwave.
You'd drive 5 minutes for milk?
I always wondered if my neighbours were the only wierdos that drove to the village shop and back.
Is this breaking into the posh folk with cars debate, honestly, buses aren't that great any more, the one round our place does a massive circular to pick all the folk up, so if you want to get it for the 1 mile into town, it can take 30 minutes for the journey!
Using public transport often sounds great, but it's not exactly easy to support normal life activities over a car, or walking everywhere.
If the govt doesn’t do anything about energy prices there won’t be any public transport.
whatever happens to interest rates, inflation and CoL won't be by any form of informed design.
You’d drive 5 minutes for milk?
I always wondered if my neighbours were the only wierdos that drove to the village shop and back.
You wouldn't fancy walking the mile from my house to the Co-op in the dark - it is downhill though...
It's not the 90's. Nobody walks anymore. Except on a treadmill in the gym.
You wouldn’t fancy walking the mile from my house to the Co-op in the dark – it is downhill though…
a hill? a mile? dark? **** that, fire up the quattro...
You wouldn’t fancy walking the mile from my house to the Co-op in the dark
Yeah I used to live on a v steep hill that had the Co-Op at the bottom, tree cover, 40MPH limit (ignored; natch) and no footpath for good stretches of it. Only 1/2 mile, but took the car every time.
You wouldn’t fancy walking the mile from my house to the Co-op in the dark – it is downhill though…
Only 1/2 mile, but took the car every time.
I sometimes forget that outside the big cities* they've yet to develop portable electrical lights that enable you to get around safely at night.
Seriously, do some of you people just never leave your houses without getting in the car? How close is too close to justify the car?
*this is sarcasm, apart from university I've never lived in a city and definitely have a torch.
Not a question of close but a question of safe. There are plenty of fast rural roads with no pavements round here you just wouldn't walk along at night and some during the day too
I sometimes forget that outside the big cities they’ve yet to develop portable electrical lights.
Personally I just didn't want "hit by a car while shopping for milk" on my headstone. I think people who live in big cities forget that just beyond the suburbs, everything you take for granted pretty much stops; be that public transport, shops, street lights, pavements. Go out far enough and, like me, access to your house in often an unpaved road that delivery vehicles won't use.
I've moved to Manchester and the fact that I can walk to a Tesco filling station that's open 24hrs still feels weird. Tomorrow I'm off to ride the escalators at the Trafford Centre.
edit: saw your comment. sure, I had a torch, and obviously didn't always get in the car, but living where I did, (a hill that rose 250m in 1/4 mile) it was easier to wait 'til I needed a weeks worth, and go once, y'know?
That said I bike into town (6 miles) or to the garage (1 mile) when required
a hill that rose 250m in 1/4 mile
Thats as lovely a mix of units as bicycle tyres.
But thats a 250m rise in 400m length. I'm not sure my car will get up that.
But thats a 250m rise in 400m length. I’m not sure my car will get up that.
Clearly what was needed was public transport, such as a funicular to allow residents to get their milk without using their car!
But thats a 250m rise in 400m length. I’m not sure my car will get up that.
A 1 in 1.6 hill , it's all becoming a bit
I walk to the shops almost all the time but I agree there are roads where it's just not safe to walk. The lane between Pontprennau and Lisvane in Cardiff is a good example. Only just wide enough for two cars, which means they drive like it is, at 20-30mph, and this leaves no room at all for pedestrians. The only reason I ride it is that I can keep my speed up through the pinch points but I wouldn't take my kids on it unless during a national lockdown.
