Monday, January 5, 2009

Every cloud has a silver lining

There's been much doom and gloom about the global economy.

I must have contributed a fair bit myself with my regular postings on 'Bankrupt Britain.'

But Saturday's Daily Mail noted that recessions have their benefits and many people are made better off by them.

There has been the fall in interest rates which will mean lower mortgages. Thus, is you owe £100,000 or whatever, you will be heaps better off.

The slowing global economy also means food is cheaper, not rising like it was, ditto with the price of fuel, like petrol. And the growing competition for our pound or dollar will mean better deals from the supermarkets, the clothing stores, pubs, electrical stores, car yards, etc, etc.

Those who don't own their own homes should find them more affordable and hopefully achievable.

Thus, if you keep your job then you should be quids in!

Indeed, there are those who actually did better business in recessiontime. My parents used to sell things on the markets, initially clothes, later footwear, like what you see on Eastenders.

They tell me their best years were during the recession years of the 1970s and 1980s. I guess in the 1990s, Britons, even poorer Britons became rich enough to go to the malls and business then suffered.

So despite all the tales of woe, many of us should cheer up. If we keep our jobs we should be better off, something the Sunday Star-Times noted just prior to the election. And there are National's taxcuts too giving kiwis extra cash in our pockets.

Of course, there is an irony in all this. If we accept that the credit crunch was caused by too much borrowing, it seems bizarre that interest rates have tumbled greatly. Thus, the prudent ones who saved are now punished by getting 1% or less on their savings compared with say 5% a year ago, while those in debt have to repay correspondingly much less interest.

And the biggest debtors of all, typically government, get themselves into even bigger debt and try and pass it off as 'investment' as Gordon Brown was doing this morning!

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