Saturday, 29 November 2008

WTF is going on update :

Actually just realised that if the shares that the Govt are selling on behalf of the bank that has been bailed out wouldnt be a bad deal if you got the equivelant tax relief that was the cost of shares otherwise you would be effectivly buying tax and you would be paying even more tax.

Offering tax relief on the cost of the shares would be a good idea unless the revenue that the Govt received from the sale of shares was offset against the cost of bailing out the bank that has been charged to the taxpayer.So therefore the Govt has provided a bridging loan to keep the bank afloat before it is re-privatised/floated on the stock exchange.That is sound economic sense and i could live with that.

The secret to surviving all this and using the system to your own advantage or making the banks just that little bit more desperate for your business is for *everyone* that being private individuals is to not borrow ANY money for at least 6 months maybe 9 months and by that time the banks will be desperate for your business and they will drastically reduce their interest rates which may mean the whole situation gets worse.

The way i see it is that in future banks will have to scale themselves down [turnover] and expect to lend out less money and make a smaller amount of money based on sensible lending policy.

Everyone is going to have to get used to making less money and perhaps in my lifetime there may be a situation where an economy doesnt have to grow year in year out and instead remains more or less static.Whats wrong with this ?theres plenty of companies whose turnover remains steady and who dont constantly feel that they should expand and grow.I think small is beautiful.Bigger is not better.

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