I'm thinking of investing in a piece of remote woodland. Not because I think forestry prices are going up but because it might be a good place to dig a hole and bury my money. Even before the reduction of 1 percentage points in the Bank of England's base rate yesterday, my savings were not earning enough to outflank inflation. And of course, unlike my bank, a hole in the ground won't go bust.

I thought the whole point of the economic crisis was that it was caused by individuals and businesses borrowing too much money at too low interest rates. I thought that the banks were in trouble because they advanced vastly more loans than they had taken in deposits, and had tried to make up the difference through short-term borrowing from abroad. I thought that they needed to recapitalise by redressing this balance - restricting their lending and encouraging more depositors.

How, then, is slashing interest rates supposed to achieve this? The cut is nothing but financial hair of the dog: trying to cheer up credit-bingers by promising them another shot of even cheaper credit.

It isn't sound economics; it is just populist politics. The idea that Gordon Brown made the Bank independent is laughable: he gave it instructions last week when he said: “Inflation is on its way down, which will enable the Bank of England to make decisions on interest rates.” Actually, inflation hasn't yet fallen a jot: it is at a 17-year high.

Mr Brown, and a lot of other people who have been demanding lower interest rates, have been hiding behind the shadow of Keynes, claiming it was his prescription of low interest rates that lifted the world out of the Great Depression. But more recently the policy of slashing interest rates at any hint of economic trouble has proved disastrous. It was panic cuts in rates in 1998, in response to the collapse of the hedge fund Long Term Capital Management, which sparked the idiocy of the dotcom boom and more panic cuts after 9/11 which inflated the housing boom.

I am not even sure that yesterday's rate cut is good politics. There are an awful lot of us who didn't get carried away in the boom years, who paid off our mortgages and built up our savings. Mr Brown has little idea of how angry it makes us to witness the Bank of England trying to bail out the feckless who borrowed a million to build themselves a buy-to-let portfolio.

We are not powerless, however. If we were all to pull our savings out of the banks and bury it in the ground instead, there wouldn't be any credit for the banks to advance, no matter how low the Bank of England's base rate. Savers of the world unite - you have nothing to lose but a pitiful few pennies of interest.

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