to wonder why the govt are not doing anything about the spiralling cost of living?

[dirtyface]

they are making cuts left right and centre, but IMO are not looking at the bigger picture which is the REAL reason people are so skint. ie because of the cost of living ie food, gas, electric, (my particular bugbear) petrol , housing, local taxation.

this is why people are not spending money on the high street etc. its cos no bugger has got any disposable income after they have been fleeced every month paying for the essentials. i for one spend a good proportion of my earnings on petrol, so does dh and i am sure i speak for many people

obviously i am mostly talking about mr and mrs average joe on average incomes, ie, say min wage to about 30k or so. but am sure the higher earners are squeezed as well esp with them cutting off CB and tax credits etc after a certain income

whats going to happen? is it just going to keep going up and up. it scares me

disclaimer: i don't understand how any of this works so sorry if i sound thick. there is probably some clever obvious reason why "they" cant sort the cost of living out a bit

sorry, computer is playing up and posting on its own

sorry, computer is playing up and posting on its own1

sorry, computer is playing up and posting on its own.can't do capital letters. dh and myself earn 22 k between us, he works full time and

oh damn, i work 29 hours. 30 k would be wonderful. sigh

Ubik asks "How does this correlate with in the increase in executive pay though? If it's such a scramble to produce goods at a low cost the maximise profits, why does so much end up I senior management's pockets, there is now a huge gap between what a senior executive earns and that if middle management and workforce lower down the scale."

Ignoring for a moment the BBC fiasco, I think the answer to this is that there is a relatively small pool of candidates with the education, aptitude and experience to make them suitable for senior executive/management jobs and other highly paid positions and the demand for them is chasing up rates of pay.

In my company we are desperate to find someone to fill a particular vacancy (not even that senior, most people who are suitable for the role would be in their early/mid thirties) for very attractive pay (think several times UK average), but there are very few people around with the right qualifications and experience and lots of other companies are looking for the same thing. Competition amongst employers for these people is driving up salaries.

What is the actual point of Quantitative easing? Just avoiding the true problems if you ask me.

Top executive pay started rising rapidly when the financial services authorities started making all directors pay be disclosed. This was meant to make shareholders understand the pay and make it reasonable. What happened is every new boss wanted a top quartile salary and it was idfficult for companies to pay below average because that said the new boss was not good enough.
This rapidly raises averages and increases pay at speed.
The law of unintended consequences and be careful what you wish for.

Okay, I'll have a go.

If you've got £100 for the month, each of those pounds is worth a lot to you. If you buy a cup of tea, you probably want it ti cost about 30p. If you've got £10,000 for the month, each of those pounds is worth less to you. You'll pay more for your cup of tea - maybe £3.50. When people have more money, they'll pay more for things, and the price goes up. This is inflation.

If you've got £100 for the month, a debt of £10 is huge. Its about 40 cups of tea. If you've got £10,000 for the month, a debt of £10 is peanuts. It's suddenly only 3 cups of tea.

Quantitative Easing is like giving the UK as a whole more money, so that although the UK still owes the same amount of debt, that debt is worth less, but prices have gone up.

Does that help?

Hyperinflation is when prices go up so quickly that money can become worthless overnight, and people lose all faith in the financial system.

It's usually associated with the Weimar Republic, I.e. Germany after the First World War, when Germany had to pay financial reparation to other European countries. Have you seen the famous picture of the man with a wheelbarrow full of banknotes? That's the Weimar REpublic. Savings are wiped out, and people's buying habits go crazy.

However, hyperinflation has happened multiple times, e.g. In Brazil more recently. This link is to a great article / podcast about Brazilian Hyperinflation which talks about what it's like to experience at first hand:

www.npr.org/blogs/money/2010/10/04/130329523/how-fake-money-saved-brazil

When interest rates go up it means that businesses have to pay more to borrow money so the cost of goods and services can go up. The cost of mortgages also increase which means that home buyers monthly mortgage payments increase and landlords' mortgage costs increase - so wages need to rise so people can afford their mortgages / rents.

Investing in sterling also becomes attractive as it pays foreign investor a higher rate of return. That makes the £ stronger and our exports more expensive - which is not good.

An increase in interest rates is not all doom and gloom though. If you are a saver you will receive increased amounts of interest on your savings so you could spend more if you wanted to. That can also fuel inflation.

www.mumsnet.com/Talk/in_the_news/1847908-So-how-many-Mumsnetters-Arent-working-enough

The UK and Europe are yesterday's man as far as global economics now
we have to fight for our right or get bypassed

There is no money in government to do what needs to be done
because even the awful tax avoidance is minimal compared with the amounts that Gordon Brown borrowed from our children on PFI.

No money to do what needs to be done?

There seems to be enough to take us to war in Syria (there must be or Cameron wouldnt have tried it) and theres the £34 million thats been spent trying to get Universal Credit off the ground.

AND the money spent on that massive library which opened in Birmingham last week (ironically while lots of local libraries are being closed)

£34 million is nothing at all

you need to think in the tens of billions to

• remove renewable fuel feed in tariffs
• reduce petrol duty
• reduce prescription charges

"take us to war in Syria" - uh no, that was voted down.

it is well worth trying out the Treasury tax simulators : revealing

I KNOW that was voted down hence what i put in brackets (there must be or Cameron wouldnt have tried it)

I think British Gas made £60 milion profit last year from 12 million customers, that's £5 per customer.

We need to build houses.

Lots of them

We need to make sure big companies pay fair taxation in the uk.
how can local coffee shops compete with costa etc when the latter pays no tax?
ditto amazon and book shops
And the super rich need to pay tax too or not live in the uk

Grendelsmum has explained how counterfeiting quantitive easing reduces your level of debt really well, thanks GM!

Regarding the 'its the bankers fault' and 'Thatcher destroyed industry' tribalistic arguments - [Blackadder groan] - Oh, God.

This crisis started in 1971 when THE GOLD STANDARD was dropped. AT THIS MOMENT the rules of money changed.
Money stopped becoming an instrument of value, and instead became an instrument of debt. When you get this, you get the financial crisis.

Remember who the bankers were lending to: they were lending to governments like Gordon Brown who opened the taps on unreformed public spending (Tony Blair tried to talk about reform, and got shafted by his own Chancellor. How that clown has got away with and the public has not noticed what he did is nothing short of Derren Brown hypnotic) and the governments of the EU who kept breaking their own rules to let countries that did not qualify, in. This is why it is way bigger and beyond Cameron etc.

Wellwobbly, Grendelsmum

I thought Brown tried to reform the banking system, he was shafted by Blair et al.

And as far as I remember, Brown's intention was to use QE once or twice to bide some time while they dealt with the banks. Cameron is using it randomly as a cure all, like using antibiotics for a cold.

If we continue to blame the recession on public spending we are never going to deal with the other causes and it will continue to get worse.

www.bbc.co.uk/blogs/thereporters/robertpeston/2009/02/browns_cautious_bank_reforms.html

Gordon Brown knew that we needed global banking reform.

Noobie, Brown is a control freak. So what he did was 'make the BoE independent' (yea, right), and implement a tripartite regulatory system. Stuffed mainly with HIS cronies.

It was disastrous. The one mandarin who stood up and made a speech warning about the level of debt, he sacked.

The point I made was government debt, ie the vast and fantastic scale of it.

Please try not to bring in other emotive issues, like 'blame' and 'public spending', that just muddies the waters.

PS - 2009!

The joys of hindsight, eh? Far, far too late. Read one of the comments:

I find it appalling the man who for years has said that British banking benefited from the light touch of regulation is still making decisions in this country....

It is after all the light touch that has caused all this recession and if we dont stop him shortly we will have a full grown depression on our hands....

All the correspondents are letting him away far too easily.

Ww there is a huge amount written about 2007 and the FSA and making theBOE independent, but Brown always intended his strategy to work alongside international reform. He desperately wanted to restrict the banks when Thatcher ended restrictions on investment banks with the Financial Services Act in 1986. They call it 'The big bang' for a reason. The FSA was an attempt to bring some order but things were too complex already. It all started in 1986, following America's lead.

The banks are still nowhere near under control,