Interest Rates, Banks, Property and the Economy

Not only is it freezing outside and snowing, the economy is in a severe winter as well.

March 5th 09 Update: Interest rates reduced to 0.5% and Quantitative Easing measures to boost economy to be 'tried' by pumping £75 Bn into the economy!!

- Interest rates at historic lows of 1%.
- Banks still not increasing credit supply.
- Property bargains to be had and investors are buying.
- Is the economy in a recession and can you still make money?

Here is a quick (ish) run down on the Interest Rates, banks, property and the economy.
It started as an interest rate update and a few hours later it turned into so much more. If you don't have time to read it all, skip to the section that is relevant to you.

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Interest Rates

Falling rates, going down, down and down...
Interest rates are now down to an historic low of just 1%

8 October 2008: 4.5%
6 November 2008: 3.0%
4 December 2008: 2.0%
8 January 2009: 1.5%
5 February 2009: 1.0%


Source: http://newsimg.bbc.co.uk/media/images/45448000/gif/_45448232_boe_466.gif


It's not really good news for savers or the economy, as there is a huge reduction in the credit supply available for spending.
The pound won't like another cut either as it is already weak against the other major currencies.

I won't even go into inflation as the government is not entirely sure how it is measured either and how to fudge it to fit the figures that they want. (RPI, CPI and RPIX)
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Banks



Source: http://newsimg.bbc.co.uk/media/images/45447000/gif/_45447761_key_rates_5feb_gr466.gif

Libor is what banks charge when the lend to each other and it still looks like there are still trust issues between the banks.


Small businesses are being allowed to go out of business but large companies and banks are being bailed out by governments. The money is going into the banking system but not coming out the other end.
Giving the banks money that isn't passed onto their customers leaves tax payers looking like idiots.

Bailing out companies and banks that should have been allowed to go bust is not a very smart and ethical move, the mistakes shouldn't be covered up and the entire market allowed to correct to what is an acceptable level.
Putting bans on selling bank and other related stocks short is ludicrous. The whole point of an open market is to allow buyers and sellers to help it find it's price.
This leaves the stocks overpriced (if you can't sell short and only allowed to buy, it is artificial inflation of the value!)

Quantitative Easing and pumping more money supply into the economy surely can't fix the problem can it, how much longer before it all goes bang!?
Check out this brilliant article on The End of Money. The idea isn't as far fetched as it may first appear. The End Of Money by Chris Martenson

Whereas the banks have been bailed out for their criminal behaviour, they are now treating companies and individuals like criminals. Pot calling the kettle black!?

If you are having a tough time financially then stop waiting and go get good debt advice now.
Check out this article and the below links for more info:
http://bobby-gill.blogspot.com/2008/08/maxed-out-how-much-have-you-borrowed.html
www.thedebtsurvivor.com
www.ideservedebtfreedom.com
(Mention Bobby Gill's Blog when you contact any recommended parties to make sure they look after you)

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Property

What do interest rate cuts mean to homeowners and investors?
If you can raise the deposit of 25% or negotiate a discounted deal with a seller, then rates are so low that it is a good time to take out some long term borrowing.

Already own property and on a variable rate? Great, if it is discounted rate you will be below 1% already saving you hundreds of pounds a month.
This is a good opportunity not to go out spending but either stockpiling some cash or paying off the capital on your mortgage, better still pay off other high interest debts like credit cards and loans. The extra money is a bonus and it is up to you to either invest (reduce debt) and save it - or splash out on doodads and toys. Make the smart decision now and you'll be glad you did.

Currently cash is king and those with liquidity and able to structure smart deals will be stocking up on property.

James Caan is still buying. I was lucky enough to see him speak at a presentation in London, at the Wealth Intelligence Academy last weekend.
His views were the interest rates are likely to go down virtually to zero and that there are plenty of great deals out there. For example he recently purchased a £10m property, being offered at £7 for just £4.1m because that was all it was worth to him. Nearly 60% BMV (below market value) is a great deal and this is proof that such deals are just waiting to be done.

Richard Branson says fortunes are to be made in a downturn. Assets can now be bought cheaply and the recession will provide "massive" opportunities for entrepreneurs.
Source: http://news.bbc.co.uk/1/hi/business/davos/7860333.stm

Usually big deals are immediately bought up by large firms and pension funds. They are not buying anymore and more likely to be off-loading their property at the moment to stock up on cash. What a great time to buy.

The current climate is only a problem for flippers and property traders, not property investors.
Investors know property always has been about the medium to long term.

Finance is a little harder to raise but deals are still there to be had. With less competition, as average investors are scared by the news, could there be a better time to buy!?

As a contrarian, like Robert Kiyosaki, my view is that it's now the best time to buy as people are desperate to sell and panicking.


It may be winter but Spring will be here soon. Look after you cash flow short to medium term and reap the rewards later.
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The Economy

Are YOU in a Recession or making money?

The UK economy (GDP) has shrunk for the second successive quarter meaning that the country is now technically in recession. I won't even look at inflation as the government fudges that each time to suit and has various methods of measuring one thing (RPI, CPI, RPIX), roll a dice and pick a figure!

McDonalds are one of the biggest winners at the moment:
Source: http://timesbusiness.typepad.com/money_weblog/2008/10/the-10-biggest.html

People are still going to take holidays, so tourism locally will increase as people will not go abroad. With a better exchange rate it will also attract international travellers visiting the UK.

Food companies are still doing pretty well and other companies that provide basic necessities, like utilities. People want to reduce their bills and increase their income so companies like this will expand in this climate.

Drop me an email to find out more on how to save money on your utilities and earn an extra income too. Utility Warehouse can save you money on your bills and household shopping!
Take a quick look at this French & Saunders video, reminds me of the PC / Mac adverts lol...
www.lowermycosts.co.uk


There is still money to be made and it is only an economic slump if you aren't prepared to look for the opportunities.
Bob Proctor says that their may be a recession on but he is refusing to participate in it. What decision are you making?

Surround yourself with people moving forward, not those sat watching TV, drinking beer waiting for things to change for them. Take a look at these Mastermind groups being set-up around the UK and get yourself a peer group that supports you.
http://bobby-gill.blogspot.com/2009/01/think-and-grow-rich-mastermind-groups.html

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None of the views or news above is good or bad. It just depends which end of the shotgun you are looking at!

And on that happy note, make sure you're on the right side ;-)


Bobby

P.S. Remember it's all just a game and you can win if you want to!

Maxed Out - How much have you borrowed?

Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders

I recently watched an interesting movie called Maxed Out by author and director James Scurlock. It was filmed in America in 2006 and it nicely leads into the current credit crunch (now so widespread it is in the dictionary)

The film reveals how banks are lending more and more money to people and actually hope that they can't repay their debts, so they have to pay late charges and more interest. Banks will turn up in universities and offer banking services and credit cards to students willing to give them their details in exchange for a t-shirt or a back pack. Applications are sent in the post to children, the infirm and those that are dead or already bankrupt, so much for up to date and correct credit files (or spying records).

Get the book from Amazon: Maxed Out: Hard Times, Easy Credit



http://www.youtube.com/watch?v=YiOVNWoWTAU

When asked about not lending to the vulnerable and those at the lower end of the economy, therefore reducing the amount of defaulted payments, the answer was simple: That is where the majority of the money is made. The banks and credit card companies prey on the weak and those with little financial knowledge.

If you can't pay or default, the creditors sell the debt to third party companies (like the mafia used to do) and they will then hound you with calls, letters and threats to get the money out of you. Even as far as contacting neighbours and family to shame it out of you by causing embarrassment.

Is your credit file incorrect? They don't care. You want to pay off your debt? They'd rather you didn't. Want to borrow more? Of course.

The US government has been unable to pay the interest on it's loans of around $9 trillion (the US National Debt clock), so it borrows it from the Social Security 'trust' and the amount keeps increasing every year. The UK national debt is estimated at around £1000 billion, how much of the interest is paid by your pension money? The winners in this game? The BANKS!

Do you believe that you should pay back money that you borrowed, then good on you. Did you know that banks want you to stay in debt and end up taking around 2 times interest on the amount you borrowed? So for every pound of principal it is an additional two pounds of interest and charges. Whilst people are worried about what they are going to do, where does this all lead?

To an ever growing amount of debt, people struggling to make payments day to day, poor health and even to suicide! Just remember you are not the only one or alone, there is always a way out. If you are struggling, then seek help now! You can contact Denis or Morris at Just Debt on 01423-541317 for a free consultation to discuss your debt and finances and they will help you find a solution.

After all it is 'just debt' and living your life is so much more important than worrying about things that might never happen! Remember, you don't actually ever own or lose any thing. We are just custodians at the moment, till it is our time to leave them for future generations - take the time to look after your health, your family and those you care about. It's not all about the money!

You can buy the DVD from www.politicaldvds.co.uk for a couple of pounds.

"There's a lot of shame and a lot of guilt attached to the issue of money mismanagement...Everybody feels like the other couple has a perfect marriage and a perfect everything...Turns out, I've met Ken and Barbie and they're broke." -Dave Ramsey

"The size of our problem out there is very large. I regret to say that the word billion does not encompass the nature of the problem." -Alan Greenspan

"Maxed Out does for credit card companies what Super Size Me did for fast food."

Life Shift with Dave Rogers, XL Manchester

On July the 12th I went to a XL coaching in Manchester with Dave Rogers.

"A truly extraordinary weekend full of so many personal (and life-changing) insights. And just as importantly, you'll be working with and interacting with your fellow Life Members from around the globe, developing brand-new working relationships that have the potential to change your business and personal success."

It was a great weekend where I got to meet virtually all the people that I needed to, to help solve all my current challenges. Syncronicity or coincidence? Who knows... it is the end results that are important. With so much going on how can I put it all into one post. Like everything in life, you have to be there to experience it.

I got the chance to meet some great people who I look forward to seeing again soon. To name a few, they were Dave Rogers who was brilliant and his presentation skills dynamic.

Michelle Clarke runs the Manchester group of XL and organises the local events. She also does a good karaoke once she gets going :-)

Denis Noble, who works with Just Debt, if you need help with your finances, loans, credit cards, just give him a call for a free consultation on 01423 541317.

Michael Bradford of The Intuitive Advantage. He uses intuition to help you overcome challenges in your business and personal life.

Naomi Johnson is the Dream Architect, she can help you build a foundation to your dreams and help put a plan in place to ensure they become a reality. What a great idea!

Justin gave me a tough time on making decisions, pushing the comfort factor and going for it. After all everything great is on the other side!

Colin Fu is The Mac Daddy! He is also going to be taking over and partnering on the Network Billionaire site. This was one of the opportunities I offered to people at the event.

Another opportunity I offered was Free NLP coaching to get some testimonials to build my business and no-one accepted. This was a tough crowd. They all insisted on giving me something or bartering (trading) services. A win-win situation! It's about time I put value on as not many regular people appreciate something that's free any way.

Now this is what happens when you surround yourself with a quality peer group. Find out more about XL here.

Did I have a Life Shift? Yes... you're reading about it now!

Dave Rogers is coming to London on September 6th-7th

"Dave Rogers an internationally renowned author and speaker in the field of entrepreneur coaching, personal and professional self development and peak performance. Dave is also the author of "Awesome Impact Coach" and co-author of "The 6 Dimensions of Top Achievers".

He has created several audio programs and videos, and has appeared on radio, television, and stage throughout Asia Pacific.

Since 2001, Dave has conducted more than 125 coaching programs to more than 20,000 entrepreneurs in Hong Kong, Malaysia, Indonesia, Japan, Singapore, New Zealand, Australia, India and China.

Dave has personally coached a wide range people; coaches, from multi-millionaire entrepreneurs to the retrenched, from bankers and top executives to medical professionals and international renowned artists, athletes, singers and dancers. Dave is also the Chief Coach with XL Results Foundation as well as incoming President of the Asia Professional Speakers"