Credit Crunch bites the Indebted

I must be one of the few people enjoying the headlines generated by the "credit crunch".

For too many years, too many people have been adopting a buy now pay later mentality. Swapping leisure time and consumer goods in the present for a life of indebtedness to repay it all back. The problem has been aggravated by the hidden tax levied by governments - inflation, which reduces the value of these debts over time.

Well, to try and keep the Inflation Nation on the rails, the government keeps dropping interest rates, even though common sense of rising commodity prices and increased money supply indicate it should be doing the opposite, if it really wanted a well-managed, sound currency of lasting value.

Funny thing is, despite official government lower interest rates, free market rates are having to apply to the money banks are lending each other through LIBOR. Could this be the beginning of the irrelevance of government rate-setting?