"we Need To Get Savers To Spend!"

[R K]

Thanks Mr P!

In a report The savings ratio turns negative - is a recession around the corner? Dresdner Kleinwort economist Marchel Alexandrovich said

Er, yeah, looks like it was. That was Apr '07.

McFall really should just shut up or better still resign, or failing that get kicked out by whoever voted him in. This election is now long overdue.

[Starla]

Oil ETFs (exchange traded funds which track the price of oil).

Gold (at least 1 months gross salary).

Euros (cash or savings account in Europe. If you have a friend who lives there get them to get a gas bill in your name and opening a high interest account).

If you smoke, buy 1-2 years worth of cigarettes from Spain. There is no way Gordon is going to drop the tax rate on those. If you know someone who smokes then store a year's worth for them and sell them for a profit. Pack of Cigs in Spain is £2-£2.50

Food, buy a LOT of the cans and jars you use anyway. Always buy them 2 for the price of 1, bogof, half-price etc.

Keep at least £2000k at home in cash, well hidden.

I've just read "The Road" by Cormac McCarthy where post holocaust the most valuable commodities are shoes and tinned peaches! I'm getting those in! Seriously though - thanks for the advice. I do smoke unfortunately and I might take the more sensible route of attempting to stop - although I like the idea of hoarding, I'm off to South Africa in March, I'll stock up.

I really really am with all those who simply refuse to spend their savings/money or give one more penny than we have to to Gordon Brown.

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

Mr McFall's an ex secondary school science teacher FFS - hardly someone to take seriously...

[Guest AuntJess]

Mr McFall's an ex secondary school science teacher FFS - hardly someone to take seriously...

I have to agree with that to some degree. My science lecturer hubby was in FE/HE and when he went to a parent's evening for our son, he asked which science book he was using. This specimen looked a bit bewildered and said, "It's a green one".

I knew the authors of all the major books I used to teach with, so did my OH.

After that we were less than excited about his schooling and my husband coached him for his O and taught him for his A level.

[Angry Rob]

My response to him, for what it is worth:

I was disturbed by your comments on Newsnight (5th Feb) regarding getting savers to spend. Hearing this suggested that you do not understand the mind set of savers. I save money each month from my salary - I do this for a number of reasons: security, independence, but also so I have money to buy goods when required. Cutting the rate of interest won't change my values - if anything I will need to save more to compensate. One thing that I definitely won't being doing, and I suspect I'm not alone on this, is going out and spending my savings on unnecessary items. If anything, my ability to spend has been reduced.

My question to you is what should I buy with my savings? Savers will now be more inclined to move their money from Sterling savings into other currencies and precious metals - surely this will not help our ailing banking system.

I would also be interested to find out what your definition of a saver is - someone who doesn't spend every single penny of their earnings (and then more)? Do you not agree that a savings culture is desirable in this country and should be welcomed?

When I hear comments like this from members of the Government, a shiver runs down my spine. I regard such a comment, however innocently intended, as a thinly-veiled threat by the government to inflate away people's savings. I would regard such an action as theft by a government who regard responsible members of the public in contempt. You should be in no doubt what will happen if this is attempted - people will withdraw their savings from UK banks and purchase any tangible assets they can get their hands on (this has already begun to happen). Bubbles will form in unproductive areas of the economy, and if you think the economy is in a bad state now, it will end up in an downward spiral.

If I make a suggestion to you it would be to change your focus from trying to reinflate the burst bubble that is our economy, to looking beyond this to the recovery. What sort of country do we want this to be? Do we still want people with a dozen credit cards racking up huge debts? Do we really want everyone to have huge, unaffordable mortgages (which ironically prevents them from saving or spending in other parts of the economy)? Do we really want to have an economy that is so dependent on people filling their arms with overpriced consumer goods each Saturday?

You can only begin to solve the current situation if you seriously address the above questions. Targeting savers is not the answer.

Yours sincerely,

[game over]

'fessed up on the old plan has he? McMouth was it? Pursed lips, "Look I'm serious" intense stare?

Was that the big plan that you promised McFall? The plan for savers?

Thoroughly ashamed of yourself? You should be.

Advising people to spend their financial security, their nest egg, their rainy day funds?

You disgust me.

We're not spending a penny unless we have to - go put that in your bagpipe and blow it.

He was the tosser that called Dr David Kelly, "chaff".

[Guest AuntJess]

My response to him, for what it is worth:

I was disturbed by your comments on Newsnight (5th Feb) regarding getting savers to spend. Hearing this suggested that you do not understand the mind set of savers. I save money each month from my salary - I do this for a number of reasons: security, independence, but also so I have money to buy goods when required. Cutting the rate of interest won't change my values - if anything I will need to save more to compensate. One thing that I definitely won't being doing, and I suspect I'm not alone on this, is going out and spending my savings on unnecessary items. If anything, my ability to spend has been reduced.

My question to you is what should I buy with my savings? Savers will now be more inclined to move their money from Sterling savings into other currencies and precious metals - surely this will not help our ailing banking system.

I would also be interested to find out what your definition of a saver is - someone who doesn't spend every single penny of their earnings (and then more)? Do you not agree that a savings culture is desirable in this country and should be welcomed?

When I hear comments like this from members of the Government, a shiver runs down my spine. I regard such a comment, however innocently intended, as a thinly-veiled threat by the government to inflate away people's savings. I would regard such an action as theft by a government who regard responsible members of the public in contempt. You should be in no doubt what will happen if this is attempted - people will withdraw their savings from UK banks and purchase any tangible assets they can get their hands on (this has already begun to happen). Bubbles will form in unproductive areas of the economy, and if you think the economy is in a bad state now, it will end up in an downward spiral.

If I make a suggestion to you it would be to change your focus from trying to reinflate the burst bubble that is our economy, to looking beyond this to the recovery. What sort of country do we want this to be? Do we still want people with a dozen credit cards racking up huge debts? Do we really want everyone to have huge, unaffordable mortgages (which ironically prevents them from saving or spending in other parts of the economy)? Do we really want to have an economy that is so dependent on people filling their arms with overpriced consumer goods each Saturday?

You can only begin to solve the current situation if you seriously address the above questions. Targeting savers is not the answer.

Yours sincerely,

Excellent! you hit the right note and are remarkably restrained, in light of the outrageous nature of this comment.

[payback period]

We need to bring back an internet version of Swap Shop. Minus cheggers of course. Get a barter system working.

it's called ebay

[Authoritarian]

I think that Mcfall may have a point......

Albeit a warped one.

What he's saying is that the government need to find artificial ways to stimulate demand otherwise those in debt are going to lose their jobs, leading to more liquid housing market as repossessions soar with quicker price discovery and the corresponding financial chaos that this would entail.

They're going about it completely the wrong way though. Instead of scaring people into spending their savings before the printing press takes it away from them they need to look for ways to lower costs (particularly housing) and boost personal wealth by for example abolishing tax on savings. These sorts measures would have effect of naturally increasing demand without downsides of other solutions such as QE.

We have a choice. Either we do want an economy where people are encouraged to work and are rewarded for their efforts or we can have one that perpetually encourages property speculation at the expense of everything else. We can't have both.

Edited February 7, 2009 by chefdave

[Errol]

I won't be spending at all (at least not on anything except gold, silver and food). Wages will have to go up by a significant amount before I start spending on frivolities again.

[SarahBell]

If part way through the boom someone had said "We need spenders to stop spending" would that have helped?

[Guest sillybear2]

If part way through the boom someone had said "We need spenders to stop spending" would that have helped?

No, that would screw up it's tax receipts.

It's akin to Cadbury wanting the entire population to consume 5kg of chocolate on a daily basis, if you point out that the majority of their customers would be dead in 5 years time they would say "so what, next quarter is going to be f***g awesome!". Same applies to the government with general elections, anything that is beyond May next year just doesn't feature in their thinking.

[mew too]

I haven't read all this thread being 10 pages and all, so sorry if this just reiterates many comments, but the answer is quite simple really, house prices need to drop to save the economy, then people will be able to comfortably afford a house and lending and spending will resume again. That really is it, it's not rocket science, sure a few people who bought at the top will go down, but they will anyway as they are over-leveraged as prices should NEVER have been so high. We need a short sharp correction to flush out the debt and then the economy can mend, why should this generation sell their futures away to debt when past generations never had to. I say first time buyers should say no to buying a house until we see with our own eyes that house prices are actually being priced in line with the market (ie 2004 prices) and then offer lower if they really need to buy one. The market needs to take its medicine now!

I find the greed factor on house prices quite disgusting really, basically what the government is condoning cannot possibly work as the over-leveraged will remain over-leveraged and the danger is luring more into the debt trap and pro-longing this debacle, and telling savers to spend their hard-earned and join the skint bandwagon, yeah that's really good advise, thanks! Developers should lower their prices accordingly to sell their houses, instead they are becoming 'short term landlords until prices pick up' or the propertys sit empty when familys could be living in them and benefiting ! Greed is good right? I can totally see why we are busting as a nation with this attitude.

We have our money in various banks and that is where it stays, yes it's earning between 2 and 4% but at least its earning and not dropping in value. It's a trap, savers should see through it, save more and spend only on essentials. Buying a house here and now is absolute financial folly imho.

FTB'S AND SAVERS UNITE, SAY NO TO SPENDING, DON'T GET LURED INTO THE DEBT TRAP AND CONTINUE TO SAVE SAVE SAVE. Then we'll win, it has become a war now!

[Elizabeth]

This is why we need to return to the 3Rs. The last R, for the literate was rithmatic.

Saving should be a principle everywhere, not just in private but in public.

Nobody in this entire country can count. Nobody watches how numbers actually work. I see it every day at work. I am the only person doing my job that knows how to count and reguarly offsets proposals against the agreed budget. Everyone else follows the leader and just throws up their hand and goes 'crisis, feck me, we need more money' and the board that oversees our work goes. 'Oh OK.' so long as my the ex-manager is wearing her little red tartan skirt. Hence we are massively overrun now, except my area which is expected to pay for the shortfall.

• NOBODY CARES ABOUT THE BOTTOM LINE .... UNLESS ITS TO PILLAGE SOMEONE ELSES (PARASITIC BRITAIN)
  
• NOBODY CAN COUNT
  

[Guest sillybear2]

• NOBODY CARES ABOUT THE BOTTOM LINE .... UNLESS ITS TO PILLAGE SOMEONE ELSES (PARASITIC BRITAIN)

• NOBODY CAN COUNT

Everyone should remember these three points!

[puppee]

That Scottish Labour MP who they dig out for monetary talk was just on Newsnight saying the above! Disgusting! That is obviously their plan in reducing IRs but I could not believe I was hearing him say it out loud.

The other guest in the studio quite rightly said that the wrong people are being punished and that the reckless spenders caused the problem not the savers.

i will spend my savings when i can get a house for what they were in the year 2000 and not before a******e

[Y-QUERK]

OK I shall spend.

Now will someone produce goods or services worth spending on please? Becasue at the moment most of what I see is pointless tat not worth wasting money on, and shit services not worth paying for.

[spring]

Tough shit. My savings are under attack.

I will be cutting my spending even more to compensate.

Ass.

Exactly the way I feel....I'll have to save even more to top up the pathetic interest.

[Authoritarian]

Everyone should remember these three points!

[hazymemory]

Exactly the way I feel....I'll have to save even more to top up the pathetic interest.

Yep, me as well.

It will get saved until I can think of somewhere safer to move it to. Spending is the last option.

[Guest AuntJess]

I think that booms and busts are engineered by ruthless tycoons, lurking in the shadows: who have a finger in every pie and can reach into the heart of government.

Thery cream off their millions while lots of us little worker ants, scurry round and pay through the nose, to keep these parasites.

[1929crash]

This is why we need to return to the 3Rs. The last R, for the literate was rithmatic.

PEDANT ALERT!

Strictly speaking it's 'rithmetic.