Mandelsons plans to privatise Royal Mail have been in the press a lot this week. What I have found so interesting about it, is that even though the plan is so unpopular and has the potential for Labour to loose a lot of votes (maybe even an election), they have not backed down on the idea. Gordon Brown has openly backed it, even after the large out cry from the unions and their threat to hold back funding for Labour.

So, why go ahead with the idea? Well we all know the Royal Mail pension pot is in a lot of trouble and the group is haemorrhaging cash. Talk to postal workers and they will tell you that the communications watch dog will not allow Royal Mail to increase the cost of a basic postage stamp. Royal Mail mainly makes a loss on the mail service to the general public which needs to be shored up by the money it makes from businesses, for example the delivery of your BT phone bill, Gas bill,bank statements etc. Currently Royal Mail is finding it very hard to be competitive in this market because companies such as TNT (you've seen their postage stamps on your mail) are offering more competitive rates to win these business contracts.

You may be asking,how does TNT deliver my mail to me? The answer to that question is they don't! All TNT do is collect the mail from large companies sending out their bills and statements, and sort the mail. They then get their lorries to deliver this sorted mail to the various Royal Mail sorting offices, ready for Royal Mail postman to deliver it to your door. In this market Royal Mail as I am told, is not allowed to undercut these private companies. They rely on Royal Mail which has the delivery network to deliver this post. Without Royal Mail it would not be very cost effective for companies such as TNT or Business Post to try and employ their own postmen, its just far to expensive. The money Royal Mail would have made by trying to be competitive and cutting their rates for sorted mail to companies is not allowed by the competition watch dogs. The money Royal Mail needs to cover the cost of the public service is then reduced. So the government is left having to pump more money into the postal service. But wait a minute, the government as been pumping a lot of money into the banking industry lately so there can't be that much left to spend on much else could there?

Would privatising Royal Mail make the government some money to help them fill the depleted coffers caused by bailing out the banks? I know its a drop in the ocean but I can't help but feel this wont be the last attempt by the government to raise some cash by selling off the family silver. Maybe they will attempt to privatise Network Rail again?

That certainly got your attention didn't it? If that got your attention I am pretty sure you would shell out 50p for a newspaper at the train station on your way home with the same headline, wouldn't you? I know I have. What I am trying to get at is that a lot of our recession fears and woe's can be linked directly to such headlines. While I am not saying that newspapers are responsible for the state of our economy or the current banking crisis they are pretty good at making things sound a lot worse than they actually are and over cooking the issue. Well if you think about it if you had the chance to sell more of your product with some catchy lines wouldn't you?

I wonder if the newspapers started saying "All is great!" or "Economy saved" if it would have a positive effect physiologically on the economy? What may also be interesting is all of the potentially damming things the government and other organisations may have slipped out while everyone's attention was averted elsewhere.. could there be anything worse than a credit crunch?

There is an interesting article on the BBC web site on how Internet bank Egg is writing to 7% of their credit card customers to inform them that they are withdrawing their credit cards. Egg believes these customers pose an unacceptably "high risk". However the interactivity of the BBC's web site appears to have revealed the truth on the matter, when customers left comments behind on the BBC's web site.

It appears Egg are ditching customers who pay their debts off in full each month, basically customers Egg isn't making any money off in interest charges. If you think about it, it kind of makes sense credit card companies don't like people who pay any debts off their card each month. These customers don't use their credit card as a credit card they are using it more as a debit card but with the safety a credit card gives you when purchasing goods. If this is the case I will be expecting a letter from Egg pretty soon telling me that they will be withdrawing my card.

What I find interesting is there are people credit card companies are targeting (their ideal customer) who ring up debt and don't pay it off, or only pays off small amounts each month. However there is also a smaller group of more frugally minded people who use credit cards to their advantage and quite legally, who are not profitable to credit card companies. These are people who will:

• Put all of their work expenses on 0% interest free credit cards and when they claim the money back from their work, place it in a high interest savings account. They then pay off the card completely at the end of the 0% interest free period and keep onto the interest they have owned.
• Use credit cards purely to earn air miles and pay off the balance in full each month.
• Use credit cards to earn Nectar points and pay off the balance in full each month.
• Jump from card to card as the 0% interest free period runs out. These people are better known as "rate tarts". Some are incredibly well disciplined in how they switch from card to card and actually make a bit of interest out of the credit they owe in the process.

Its starting to make me wonder if these happy days for the credit savvy consumer are coming to an end as the banks start to feel the crunch?