Household budgets are deteriorating at a faster rate than during the height of the recession in early 2009, according to The Telegraph, 22 August 2011
Almost 40pc of households saw their finances deteriorate between July and August, compared to just under 6pc that reported an improvement as Britons were hit by rising prices and a squeeze on take-home pay.
The latest Markit household finance index also found consumers suffered the fastest fall in their available cash since the monthly survey began in February 2009.
Income from employment fell for the eleventh month running – August saw the steepest decline in take-home pay for nine months – while spending power continued to besqueezed by rising prices.
Markit said these factors contributed to the sharpest reduction in savings since March 2009. Debt levels increased for the fifth consecutive month, and at the fastest pace since November 2010.
Considering the advance in technology, shouldn’t we rather enjoy greater and greater wealth every year? Or have more spare time? Isn’t it illogical that we are getting poorer and poorer?
So, who or what is eating our available cash?
- our own debts – mortgages, loans, overdrafts
- growing prices – for servicing the debts of the companies (Uncontrolled creation of money by profit-seeking banks is the main cause of inflation.)
- taxes – for servicing the national debt
Since all money is created as debt, in order to have a money supply in the economy, individuals and companies must share the debt.
Even if you personally don’t have any debts, there are debts that you have to service anyway, even if you didn’t sign any loan contract.
Don’t forget that all this debt is completely unnecessary. There is no need for all money to be created as debt; for house prices to be as out-of-reach as they are now, and for the public and the government to be in as much debt as they are. All these problems are consequences of fractional reserve banking.
The money that was created by banks as debt could just as easily have been created debt-free by the state and spent into the economy. If this money had been created without the corresponding debt, then we wouldn’t be in the pit of debt that we are in now, with declining standards of living and a futile struggle to pay off unpayable debts.
The authorities are trying to patch up a system that is fundamentally broken. If we let them continue, then we will all end up even deeper in debt, and problems like poverty, extreme inequality and economic chaos will get worse and worse. We need a solution to the crisis that doesn’t involve passing the costs back on to ordinary people.