Wednesday, March 19, 2008

Credit cards

I received a strange communication from my credit card company yesterday.
In brief, it said it had removed my ability to draw cash against my card limit.
As I have never done this, I was somewhat bemused, but then, having thought about it, I realised that, quite apart from all the cancelled, reduced limits and so on that are being forced through ( with, naturally, lots of overlimit charges and penal interest rates) taking out the cashing element helps reduce the Banks potential liabilities. If you have to take cash out of your bank account, you reduce the amount you are drawing on your card.
As far as I am concerned, Bernanke has played this absolutely right so far. I suspect he was arguing for more cuts long before they ever got delivered ( he does, after all, go with the concensus, rather than telling the meeting what he intends to do). But now everyone can see the oncoming express train, he is moving very fast and very big - very necessary.
Our own guardians of the purse have displayed a breathtaking lack of concern. When John Moulton says the question he is being asked most by everyone he deals with is " Where dare I put my cash" ( the answer of course is Northern Rock) something must have gone wrong somewhere.
Before this is over I fully expect at least one more disaster in the UK, which, hopefully, will finally jolt the powers that be into letting go a bit. £5billion by the BofE needs to be contrasted with ( at a guess) very close to $1trillion in the States and about Eur 1.5trillion from the ECB.
And you can forget about inflation. As the wheels silt up and grind to a halt, the only thing going up will be our Government's desperation to get its hands on our money.

1 comment:

Winchester whisperer said...

Yes Darling has unfortunately started the nationalisation trend.