Thursday, 29 November 2012

END OF LOAN SHARKS?

Congratulations to Stella Creasy MP for Walthamstow, London, UK, for lobbying successfully to cap loan shark prices. She has won cross-party support including the newly appointed, fast-tracked Archbishop of Canterbury, Lord Justin Welby, (once a senior financier now a saint – UK bishops are elevated to The House of Lords – “My Lord Bishop”) and some assurance from Treasury Minister Lord Sassoon, who hands the poisoned chalice to the newly minted Financial Conduct Authority – FCA; which replaces the Financial Services Authority (FSA). The FSA, originally the TSA, could not find a single fault in the City of London over 20 or 30 years of supervision, not a single naughty person was ever criticised by the FSA – which proves just how saintly are UK banks, brokers, Libor setters and credit-insurance salesmen. Private Eye Magazine dubbed them “The totally supine authority.”

THE GUARDIAN - Sharkstoppers: the consumer activists curbing the excesses of payday lenders

“The Government” fought hard to stop Ms Creasy. I assume the relevant government department is packed with anonymous, sociopathic lovers of money-lenders or close friends or relatives of money-lenders, or, packed with strange economic-philosophers who believe that loan-shark victims, paid less than a weekly Living Wage, freely choose to borrow each weekend from Pay-Day lenders at up to 4,500% - to buy food or transport to work.  Why are the supporters of cruel, villainous money practices never named? They seem to lurk in the shadows and always have many evil friends in low places.  

The rate of the CAP has not been fixed. My recommendation is a loan interest and charges CAP of 5% per annum. This is ten times the Base Rate, which most banks borrow at. Ten times means 90% profits for the lenders. Most UK home mortgages are at or below 5%. Those who might lose out include credit card lenders (16% to 32%), Business Overdraft /Loans lenders (5% to 12.5%), and a few higher priced commercial mortgages. Most Hire Purchase and Lease Purchase rates are now set by the suppliers of the goods – often at 0% and mostly below 5%.

The benefits of a 5% CAP on all loans will be:
1) Few bad-debts - in the lenders’ books; with massive savings of debt enforcement, court costs and family misery.

2) Counter-inflation - A 25% reduction in the prices of most goods, which carry financing costs at 10 to 15 points in the supply chains from mines and farms to factories to shops to consumption.

3) Price of Money – A major reduction in the ridiculously high costs of the Money-Economy, which in the UK employs as many as does the Health Service, about 1.2 million people. The whole money-system, The City and Wall Street, will eventually be operated by one large laptop computer – or maybe an IBM mainframe – releasing millions of bright people to boost the real-economy.

4) A huge reduction in the costs of most poor households and therefore less pressure on wage increases – which is also counter-inflationary.

A 5% CAP is a good thing. Sign this petition:
GLOBAL ECONOMY - BLOG ARCHIVE

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