Brown bets the house…. But there is a better way!
Howard Lake | 8 October 2008 | Blogs
Well not his house, but maybe yours and mine. The only good news I can see is that interest rates are falling by 0.5% – not enough but on their way.
Why is this such good news? My simple take is to blame Ben Benanke of the Federal Reserve for the whole fiasco. Sub-prime mortgages were quite repayable when originally sold as they were based on historically low interest rates, but Ben put them up three times in quick succession; so making it impossible to buyers to pay back their loans and they defaulted en masse.
The reason there was no quick correction was because the current system of financial over-sight is welded to not increasing inflation; which requires interest rates to rise at times to choke off demand. Once you weld part of the financial systems checks and balances chaos ensues.
So today’s orchestrated fall in rates, if pursued further over the next few days, will allow some sub-prime payments to flow again and steadily reduce the poison in the system; which fat cat bailouts don’t achieve.
Lastly does anyone else feel the fundraising proposition “only £2 a month” reminds them of sub-prime mortgages? With the lottery offering lower jackpots due to punters feeling the pinch, maybe some charities investment may not pay-off at upgrading time?
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About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.