Monday, Sep 27, 2010
"You evil savers! Spend, spend spend. Don´t worry your jobs are safe."
Daily Mail: Spend for Britain: Bank tells UK's 22million savers to boost faltering economy
Deputy Bank of England Governor Charlie Bean said it was time for the public to 'spend for Britain' to boost the faltering economy. Britain's 22million savers have been told to give up on the idea of living off their income and start 'eating into' their capital. But he added: 'We want to see households not saving more, but spending more'. He says: 'The Governor [Mervyn King] gets more letters from savers complaining when we put interest rates down than he does from borrowers when we put rates up.'
Posted by cat and canary @ 08:48 PM (2763 views) Add Comment
54 Comments
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1. Simon said...
Charlie Bean obviously has no worries about job security himself .
About time Mystic Merve and a few of his flunkies were given a reality check in the only way they will understand .
Absolutely beggars belief , are they really so self absorbed that they think anyone believes a word they say ?
2. paul said...
Well, an apology to savers first for utterly f*#king up the economy and getting the prudent to fix it might not have gone amiss.
You know, just to get them onside ...
3. yorkshireman said...
That's a good plan and of course I will support our economy by buying British goods made by British companies. Now, while I make up my mind what to buy, I think I'll have a nice cup of tea and a McVities Digestive or maybe really push the boat out and have a Jaffa Cake.
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. jack c said...
Assuming savers did pull their money out and started spending, once the savings are eroded (in the extreme case down to zero) where do we go from there? I've posted my thoughts on several occasions on this site regarding the fact that the economy is over dependent on spending in the shops and the USA is the same. UK Plc is fook*d
6. quiet guy said...
I thought this was a spoof at first but unfortunately, it's the real thing. The Deputy Bank of England Governor has admitted that the bank is deliberately rewarding debtors at the expense of savers.
Here is a quote from another source:
"Even more candidly, he [Bean] twice corrected my assertion that the impact on savers was an unfortunate side effect. Squeezing savers in order to make the spend more, is the point of policy, not a side effect."
http://blogs.channel4.com/faisal-islam-on-economics/bank-of-englands-home-truths-for-savers/13206
It's official. Savers are being deliberately screwed by our central bank.
7. general congreve said...
http://www.artrepublic.com/attachments/image/885/16885/16885.jpeg
8. cyril said...
Savers have money in the bank, and banks lend it to other people. No savings = no lending.
9. mark wadsworth said...
Sometimes I'm too angry to articulate myself, so I drew a picture of him instead:
10. general congreve said...
How do you insert a pic or photo?
11. jack c said...
85 comments on the Mail comments section and in general terms everyone thinks Bean is an irresponsible idiot !
12. Happyrenting said...
Perhaps, again, it's time to call a coordinated withdrawal of funds...?
13. easybetman said...
At least now he is being honest (better than talking about the moral hazard about inflating away debt cr**). I think that is a good start.
This was what Mr Bean said sometimes back:
"Aside from the dubious morality of redistributing wealth from savers to borrowers, we have seen from past experience that a bit of inflation has a nasty habit of turning into a lot of inflation.""
http://www.telegraph.co.uk/finance/economics/7801583/Bank-of-England-Inflation-not-the-way-out-of-debt.html
14. Crunchy said...
2. yorkshireman said..."That's a good plan and of course I will support our economy by buying British goods made by British companies. Now, while I make up my mind what to buy, I think I'll have a nice cup of tea and a McVities Digestive or maybe really push the boat out and have a Jaffa Cake."..............................
Which one would you prefer Gromit?
Good olde Britain. What a shame.
15. paul said...
Nice find easybetman.
Is this Mr Bean admitting that he and his fellow MPC members have a dubious morality?
I loved this line:
'The Governor [Mervyn King] gets more letters from savers complaining when we put interest rates down than he does from borrowers when we put rates up.'
What can this random sample mean? How should it shape future policy? Questions, question ...
These MPC members are as sharp as buttons. Chocolate ones. In summer.
16. str 2007 said...
Well I could take my money out of the bank, but what to spend it on hmmm.
Maybe I should just take it out of the bank while I think about it - slowly.
17. titaniccaptain said...
I have had enough of these c**ts telling me what to do and having power over or at least influence the decisions I have to make for my life.
Can I fight this man to the death please?.......
We seriously need a revolution in this country and we need it soon.
Wake up UK your being screwed.......no interested in revolution?....oh well back to the grindstone.
Telegraph also running this...
http://www.telegraph.co.uk/finance/personalfinance/savings/8028884/Savers-told-to-stop-moaning-and-start-spending.html
18. titaniccaptain said...
Well said STR2007
19. mark wadsworth said...
General C, don't ask me. I posted it on my blog first and then cut and pasted the html.
STR2007 - wrong! If you take your cash from the bank and e.g. tuck it under the mattress, what you are in effect doing is giving the government an interest free loan. So that's the worst of all worlds.
20. general congreve said...
Don't get mad, get even. Withdraw your cash and buy gold.
21. gone-to-colombia said...
Fukk1ng M0r0n
22. righttoleech said...
Mr Bean..........apt
23. hpwatcher said...
Gold is the only protection against these irresponsible idiots.
24. maihem said...
I rather think he is on side. This was satire, more subtle than bird and fortune have done, but the same joke. I think he's trying to make people really sour so they push back.
25. Alan Lubin said...
it makes me want to withdraw all my savings and spend it on foreign currencies. oh hang on. i already did.
26. Burnes said...
Mr Bean, I am desparetely trying to save money for my future as I cannot rely on interest rate returns to grow my savings. I am also desperately trying to save money to afford a house, the price of which is propped up by your low interest rates.
When will the penny drop with these guys?
27. Materialistic Weasle said...
I chuckled when I read over the weekend that the MPC take thier credibility very seriously - then they roll this lunatic out, class !!!
I bet Mr Bean is eating his toast and scrolling through the comments under his piece thinking 'Hmmmmmm thats not the way I saw it going in my head'
28. Davidg said...
So Mr Bean is asking for a run on the bank Weimar style?
29. happy mondays said...
@13. titaniccaptain said..Yes!
Rerum Mutatio unfortunately over many centuries we have been beaten down with a shi**y stick to keep us in our place!
30. Simon said...
Yorkshireman @2
Read an article in the Independent online by David Prosser where he argued that we shouldn't be concerned about companies like United Biscuits being sold to overseas companies . Mind you , at the end of the article he also claimed Ed Balls had a credible plan for reducing the deficit .
Can these people not see that we are dieing by a thousand cuts ?
31. Crunchy said...
13. titaniccaptain,
They have a revolution, it's called the NWO. Your beginning to taste it now.
A world revolution we need, but with so many non tin foil hat wearers out there, is it going to happen?
Will we interveen with the second coming and the divine end of evil doing?
Prepare yourself for this end and a new beginning will start tommorrow. God is our revolutionist, the almighty and all knowing.
32. Simon said...
maihem said... @20
I hope you are right that this was satire designed to precipitate a reaction .
Has the population been Brown beaten into submission ?
33. jack c said...
@mark wadsworth (Monday, September 27, 2010 10:49PM)
"If you take your cash from the bank and e.g. tuck it under the mattress, what you are in effect doing is giving the government an interest free loan. So that's the worst of all worlds"
Please expand on this - I'm initially with str2007 on this.
34. alan_540 said...
@4 quiet guy, yes I thought this was probably a spoof as well. We all suspect that one of the desired results of such low interest rates for savings is to stimulate spending but I can't believe this joker is articulating it. Spend for England you selfish savers! I for one will make a conscious effort to cut my spending further in order to make up for low interest rates. Scr£w you Mr. Bean. In his grand plan, what happens when the savings run out? Sell our kids to stimulate the economy? Re-mortgage to spend more? Ah, yes they tried that already.
35. When said...
This talk is outrageous and an insult to all those out there who have been prudent.
I would gladly participate in an organised deposit of a bank and withdraw the lot as a collective on a specific time/day to send a message that savers are not your puppets.
36. sureseam said...
King comes across as a weary manager dealing with circumstance in a wry manner.
Bean comes across as a cynical, manipulative force for an evil expedited on many of the weaker in society.
Put the two together and in a few years we will have large swathes of the population with no savings left and a nice fresh shiny Labour government to help spend money the nation doesn't have, on a scale we can't imagine.
Bean needs deporting to Gruinard for a few years.
37. inbreda said...
gordon or gold, or
bean or gold, or
mervyn or gold
There is no way I am giving the government an interest free loan by putting my money under the mattress. There is no way I am leaving it with the banks. There is no way I am going to borrow to buy an over inflated house.
I will buy gold. I will spread bet that commodities rise in value. And I will buy some lottery tickets.
Austerity measures are properly announced in a month aren't they? That is when the protests will start. I guess riots in about 6 months from now.
38. jack c said...
alan_540 - picking up on your last post, what these jokers appear (and I use the word appear purposely) not to understand is that in times of economic uncertainty people have a much higher propensity to save - forget low interest rates/returns, people will seek to build additional capital to act as a cushion against job loss/loss of bonus/overtime etc. The idea that you can have an economy relying on roughly 70% spending in the shops was and is folly - all part of Gordon's mirage economy where the sh*t is now starting to hit the fan.
39. str 2007 said...
MW
I think I know what you mean, but would like it expanding a little for my tiny mind.
Surely if I remove my money from banks it stops them using it as part of their foundation for lending.
A self fulfilling prophecy so to speak, but it's the little control I perhaps have.
Inbreda
You may be right, but there is a saying about eggs and baskets - be careful, you can never be quite sure what they'll do next.
40. mark wadsworth said...
Jack C, STR2007, remember that coins and notes are nothing more or less than non-interest paying bearer securities issued by the government. From the point of view of the government, whether you (as an individual) hold gilts, have a deposit with NS&I or have cash under the mattress is all much the same thing, only they have to pay you a bit of interest on the first two; and you can't spend the first two in a shop (you have to swap them back into coins and notes first).
Nowadays, we can regard the government and the big banks are all part of one large system. These two chains are ultimately very similar in effect
Borrower owes money to bank + bank owes money to you.
Borrower owes money to bank + bank owes money to government + government owes money to you (whether that debt is officially recorded as a gilt or NS&I deposit or coins and notes).
Remember that on the Bank of England's balance sheet, coins and notes are a financial liability, and you have a corresponding financial asset.
41. techieman said...
Really i dont understand all the vitriol on this site about this remark. He really is only vocalising what the BoE are trying to do, and have been for quite some time. Of course they are trying to stimulate demand - why does anyone think its been called a "stimulus". Of course they are trying to support increasing (or at least maintaining or if you like rolling over) debt. rather than deleveraging.
This actually sounds like a panic move. They are just trying to push a little harder on that string.
42. Downwhen?? said...
Now I know were the Rohan Atkinson's character Mr Bean was taken from......from a right Charlie!!!!
43. Rob Mk said...
I'll spend all my savings then need a loan for further spending at what rate?
Slavery?
Oh I want to help those that borrowed everything. I nearly hid my money and run up massive debts in the bet that the governement would bail me out a few years ago. Would have have worked it seems.
Mr Bean, how about Blackadder?
Underpants on head
Pencils in nose
'Wibble'
Absolute lunacy, he should be...........
Can't Merv kick his ass?
44. jack c said...
mark wadsworth - thanks for the expansion of your point which now makes more sense to me.
techieman - I suspect that it is perceived as a panic move and they are pushing on a string - hence 30 posts so far. They also appear to be using the same formula that got us into this mess (see my Ros Altmann post)
45. cat and canary said...
"This actually sounds like a panic move. They are just trying to push a little harder on that string."
... agree on that.
Unfortunately for Mr. Bean, self preservation has already set in people's minds. Wonder if Mr Bean will be spending everything he owns and risking his family's future, to support the Great British economy?
46. Slartibartfast said...
It's an understandably emotional issue. In macro-economic terms he is is correct. He shouldn't have said it though.
It's a complicated moral issue. Don't shoot me, I'm only trying to expand the thought processes.
There are only so many goods and services in the economy. At an aggregate level there is only so much 'economic rent' savers can extract from the economy. If the economy is growing the interest should not even keep up with inflation. Savers should at best only expect to store past work effort and should not expect a return from future economic growth (un-related to past work effort). If the economy shrinks what can you expect? If savers extract more 'economic rent' the economy spirals down.
If savers use their cash to facilitate growth through capital investment, there are well defined risks and rewards. The rewards can be above and below inflation. If the Bank sticks the money in bonds what should you expect? It's not a productive investment. It's Government spending that pays the interest.
Governments can facilitate the desire to save. But do they have a real moral obligation to protect the relative purchasing parity of savings?
47. str 2007 said...
Thanks MW
Techieman
As MoneyWeek have pointed out today, it's not so much what they are doing as opposed to admitting it.
We all kind of knew they were screwing savers, but now they're admitting it. And also suggesting they don't really give a stuff about inflation, which until now they were pretending they did.
As moneyweek point out, they could have just had a Gerald Ratner moment.
48. hpwatcher said...
We all kind of knew they were screwing savers, but now they're admitting it. And also suggesting they don't really give a stuff about inflation, which until now they were pretending they did.
Absolutely. Next they will be telling us that inflation is all part of the plan.
49. mark wadsworth said...
Cat & Canary 31: "Wonder if Mr Bean will be spending everything he owns and risking his family's future, to support the Great British economy?"
Genius. Shall we write and ask him? Ask him how many houses he owns?
50. techieman said...
STR - "As moneyweek point out, they could have just had a Gerald Ratner moment." Good one!
Maybe i am giving people more credit than they deserve. This is all sounding more and more like the real "minsky moment" rather than a "ratner moment" to me - http://en.wikipedia.org/wiki/Minsky_moment.
Of course the plan was always to reflate, and then get the people (in the widest sense) to take up the baton. However all this suggests that they haven't and probably [that's the interesting and debatable part] wont.
51. techieman said...
"more credit than they deserve" whoops! no pun intended!!
52. jack c said...
Blimey we are into the afternoon session and no quarrels yet between HPW & TM - me handbag sales have stalled (LOL)
On a more serious note hope your shoulder is better?
53. techieman said...
jack - yes thanks much better, am sling less now. Tennis / and boxing a few months off though.
I only bring things to hpw's attention when he makes a daft comment on something that he hasnt looked at or read, gets the wrong end of the stick, proceeds to have an unwarranted attack on the poster and then refuses to accept he has got it wrong and apologise, then wants the final word on any subject, and then tries to suppress legitimate debate because it doesnt concur with his opinion (or as he would say facts) by saying stuff like dont post (unless you agree with me). i.e. his usual MO.
"rant" over :).
He hasnt done that today..... perhaps he has learnt his lesson ....... am i tempting fate?
54. Hal said...
I'm thinking that given the continued rise of gold which looking at the spot price right now with the app http://www.learcapital.com/exactprice ($1,308.30 at the moment) I'm thinking maybe those savers should exchange that funny money for some golden money.