Savings Rates Need To Go To 6.17% To Stay Ahead Of Inflation

[Realistbear]

http://uk.finance.yahoo.com/news/Millions-savers-need-6pc-beat-tele-1157485272.html?x=0

Myra "Marge" Butterworth, 12:40, Tuesday 18 January 2011

Millions of savers need accounts paying at least 6 per cent interest to achieve a real rate of return on their investments after inflation rose again, figures show.

The rising cost of living means higher rate taxpayers need a rate of 6.17 per cent to avoid losing money on their savings once inflation and tax is taken into account, while basic rate taxpayers need 4.625 per cent.

The impoverishment of a generation, first through HPI debt and now through inflation generally. As people become poorer they will spend less and as they spend less jobs will be less and as jobs get less the economy grows less and it all comes crashing down.

[guitarman001]

RB, I thought you were in the deflation camp?

[exiges]

I'm glad I've got some RPI + 1% tax free with NS&I, that works out to an equivalent rate of 9.8% for a 40% tax payer.

[guitarman001]

I'm glad I've got some RPI + 1% tax free with NS&I, that works out to an equivalent rate of 9.8% for a 40% tax payer.

I've got some, too... £11k bought June 2010 for 3 years. Calc shows now worth £11.25k (?). I'm a lower rate payer.

[Realistbear]

RB, I thought you were in the deflation camp?

Like I said in the OP--as the nation gets poorer people will have less to spend and the less they spend the less businesses will make and the less jobs there will and the less the economy makes. When the consumers stop spending it all comes crashing down. Japan had severe inflation and eye-watering HPI almost as bad as ours before their day of reckoning and years and years of deflation. We are in that phase of blowing up before the implosion follows.

Also, we are the only major Western nation to have serious inflation. The US are at 1.1% IIRC and the EZ are marginally above 2%.

The inflation we have now is as a result of the global commodity bubble--huge and ongoing but it will all end in tears as the cycle has its way of corrrecting things naturally.

[Scott Sando]

http://uk.finance.yahoo.com/news/Millions-savers-need-6pc-beat-tele-1157485272.html?x=0

Myra "Marge" Butterworth, 12:40, Tuesday 18 January 2011

Millions of savers need accounts paying at least 6 per cent interest to achieve a real rate of return on their investments after inflation rose again, figures show.

The rising cost of living means higher rate taxpayers need a rate of 6.17 per cent to avoid losing money on their savings once inflation and tax is taken into account, while basic rate taxpayers need 4.625 per cent.

The impoverishment of a generation, first through HPI debt and now through inflation generally. As people become poorer they will spend less and as they spend less jobs will be less and as jobs get less the economy grows less and it all comes crashing down.

They should have bought gold.

[Lagarde's Drift]

Er, inflation is 15-20%, so savings would need to be above that, minus tax to keep up. :angry:

[Bruce Banner]

Er, inflation is 15-20%, so savings would need to be above that, minus tax to keep up. :angry:

How did you arrive at 15-20%?

[ccc]

If your savings are going to be used to buy a house in the UK ? Then they only have to stay ahead of about minus 5-10% to stay ahead of inflation.

All relative.

[Lagarde's Drift]

How did you arrive at 15-20%?

More or less the same way as the official figures are calculated. I made it up.

[Guest_FaFa!_*]

How did you arrive at 15-20%?

You don't know the Beans n'Guns Fantasyland Index?

[888]

They should have bought gold.

So Pimco should transfer all their clients assets into Gold holding? Na.

[Snafu]

I'm so glad I haven't got any savings..or..errrr.

[General Congreve]

They should have bought gold.

Yep.

[Realistbear]

Yep.

Inflation is, funnily enough, gold's nemesis and has kept it 50% below its 1980 peak. Without inflation gold would be worth double what it was in 1980 but with inflation it is worth less than half its previous peak.

Gold is not an inflation hedge any more than anything else is. If you want secure inflation protection you have to look to the world of art and the likes of Gibson Les Paul's.

[interestrateripoff]

Luckily all this inflation is down to "one off factors" which keep repeating YoY.

But soon it will be all fixed...

[Lagarde's Drift]

Gold is not an inflation hedge any more than anything else is. If you want secure inflation protection you have to look to the world of art and the likes of Gibson Les Paul's.

SHORT Les Paul Futures!!

In all seriousness I think the art / antiques / cool cars / wine market is really only for those who live and breathe it. Anyone else is just gonna lose.

[punter]

The inflation we have now is as a result of the global commodity bubble--huge and ongoing but it will all end in tears as the cycle has its way of corrrecting things naturally.

The inflation we have now is due to money printing by the Bankrupt of England, not the commodity prices which reflect true value in any currency and have for hundreds and thousands of years

[punter]

Inflation is, funnily enough, gold's nemesis and has kept it 50% below its 1980 peak. Without inflation gold would be worth double what it was in 1980 but with inflation it is worth less than half its previous peak.

Gold is not an inflation hedge any more than anything else is. If you want secure inflation protection you have to look to the world of art and the likes of Gibson Les Paul's.

That just means gold (and silver, oil or whatever) have more room to increase and they will.

Art is risky as an investment, commodities aren't nearly as such because we KNOW they're going to increase in value - well those of us who don't think they're in a bubble- to reflect the destruction of the nation and the global fiat currencies

Edited January 18, 2011 by punter

[Guest spp]

Inflation is, funnily enough, gold's nemesis and has kept it 50% below its 1980 peak. Without inflation gold would be worth double what it was in 1980 but with inflation it is worth less than half its previous peak.

Gold is not an inflation hedge any more than anything else is. If you want secure inflation protection you have to look to the world of art and the likes of Gibson Les Paul's.

Still clinging on to that 1 year RB??... Muppet!

So Gold is obviously still undervalued.

You still fail to admit you are wrong about all this Inflation. And don't give us that U.S baloney...See Shadow stats!

edit: Print or collapse. Currencies have been destroyed since the bailouts 2 years ago (v G/S). Cash was king....when it was backed by Gold/Silver! You were warned by many.

Edited January 18, 2011 by spp

[Kazuya]

Getting old now

[davidg]

> the EZ are marginally above 2%.

with 1% interest rates, which Trichet says he will put up due to inflation worries. My Livret A (french savings account) has just gone up to 2% to match inflation (I'm getting 5% in another account tax free as the govt fixed the rate 10 years ago when interest rates were much higher). The Swiss only pay me 0.65% on CHF though.

['Bart']

Millions of savers need accounts paying at least 6 per cent interest to achieve a real rate of return on their investments

Gold up over 30% in 2010, silver up over 80%.

Hey RB, dont'cha wish your investments were hot like mine?

http://www.youtube.com/watch?v=dLA4BW1b89w

[Frank Hovis]

SHORT Les Paul Futures!!

In all seriousness I think the art / antiques / cool cars / wine market is really only for those who live and breathe it. Anyone else is just gonna lose.

If you're into alternative investments and a bit of TV history:

Paul Daniels auctions wig

[Realistbear]

That just means gold (and silver, oil or whatever) have more room to increase and they will.

Art is risky as an investment, commodities aren't nearly as such because we KNOW they're going to increase in value - well those of us who don't think they're in a bubble- to reflect the destruction of the nation and the global fiat currencies

Over the last 31 years fine art has risen thousands of percent whereas gold has halved in value IA. In 1980 you could buy a '57 or '59 Les Paul for around $3000. Peter Green's LP sold recently for $200,000.

Everything is speculative and subject to wild swings as the pendulum swings from buy too sell.

Everything has room to increase and equally everything has room to decrease. Houses, for example.

Stay nimble and don't try to time the top is the best advice. Also, avoid emotional plays and get out when the herd are all buying---as Warren Buffett would put it. There is no such thing as a sure bet and commodities can only rise as much as people can afford to pay--the cause of all crashes is affordability.