Jump to content
House Price Crash Forum
Sign in to follow this  
aa3

Why We Must Steal The Savers/bondholders Money

Recommended Posts

First you have to understand that money serves a dual purpose in our society. It is a store of value and a medium of exchange.

Take two communities, in both the elderly people have very large savings accounts. In community A the elderly people are freely spending down their savings. And since there is a finite amount of labour available in their area, they are bidding against each other for that labour. Hence the price of the labour is rising.

This both creates opportunity and some real money for the working population, and makes it easier for them to pay the heavy taxes to pay for the pensions and benefits of the elderly people. This is the virtuous economy we have to get to.

In community B, the elderly also have very large savings accounts. But they are deciding to hold on to them, roll over their bonds, cut back on their expenses.. never dip into their 'capital'. Obviously there is little work to go around for the working age people, and since there is a surplus of labour, the price of labour moves towards the national minimum wage. (a sad partial solution to a collective action problem).

Its getting harder to pay for pensions and benefits because little economic activity is happening in community B. Both the elderly spending directly, and then teh workers inability to spend money they don't have.

Community B must either force the very rich to spend their money, or print money and effectively spend it for them. It must do this until the society reaches full employment and the value of labour starts rising. The inflaiton number required to achieve this doesn't really matter, whether its 3% or 30%. That is why I agree with Mervyn King that we can't raise interest rates until unemployment comes down. Even if we get hyperinflation. Yes hyperinflation is scary.. but the community B economy is dead in the water soon enough, so its not a viable option.

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

Share this post


Link to post
Share on other sites

Zimbabwe unemployment rate 2000 - 50%

Zimbabwe unemployment rate 2009 - 80%

Worked wonders didn't it?

Besides we wouldn;t be in this situation now if the bankrupt of england had made disastrous policy moves over the last decade, they screwed up and are still meddling, they will create a worse mess.

Share this post


Link to post
Share on other sites

The trouble with inflating wealth away is the rich will buy commodities, land, PM's or other physical asset to protect themselves against it. The non-rich population suffer rising prices static wages and no increase in employment.

A wealth tax as exists in France is a better solution, especially where the proceeds are used to put the unemployed into low to median wage (artificially created if necesary) jobs.

Share this post


Link to post
Share on other sites

First you have to understand that money serves a dual purpose in our society. It is a store of value and a medium of exchange.

Take two communities, in both the elderly people have very large savings accounts. In community A the elderly people are freely spending down their savings. And since there is a finite amount of labour available in their area, they are bidding against each other for that labour. Hence the price of the labour is rising.

This both creates opportunity and some real money for the working population, and makes it easier for them to pay the heavy taxes to pay for the pensions and benefits of the elderly people. This is the virtuous economy we have to get to.

In community B, the elderly also have very large savings accounts. But they are deciding to hold on to them, roll over their bonds, cut back on their expenses.. never dip into their 'capital'. Obviously there is little work to go around for the working age people, and since there is a surplus of labour, the price of labour moves towards the national minimum wage. (a sad partial solution to a collective action problem).

Its getting harder to pay for pensions and benefits because little economic activity is happening in community B. Both the elderly spending directly, and then teh workers inability to spend money they don't have.

Community B must either force the very rich to spend their money, or print money and effectively spend it for them. It must do this until the society reaches full employment and the value of labour starts rising. The inflaiton number required to achieve this doesn't really matter, whether its 3% or 30%. That is why I agree with Mervyn King that we can't raise interest rates until unemployment comes down. Even if we get hyperinflation. Yes hyperinflation is scary.. but the community B economy is dead in the water soon enough, so its not a viable option.

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

I cannot believe that anyone can come up with such nonsense.

Paper isn't wealth, you need to focus on the real wealth (land, buildings, infrastructure, ...), not on the paper!

The ultra rich elite doesn't give a damn about paper, in fact it's them running our paper money into the ground to impoverish anyone but them.

Share this post


Link to post
Share on other sites

I cannot believe that anyone can come up with such nonsense.

Friend of mind is just preparing his car for sale, family currently have two cars, the most expensive/costliest one goes. I'm sure this will be great for the economy and create loads more jobs.

Mervyn Kunt has no such financial constraints yet somehow cannot afford a senior citizens railcard himself - I suspect his knowledge of the deliterious effects of his reign as king of the bankrupt of england is near zero.

Housing transactions are going to fall again - people can increasingly no longer afford the moving/stamp duty costs - less churn, less work done on fixing up and renovations. Householders already complaining at high materials costs will not have the work done at all unless emergency repair work.

Bring on hyperinflation - another 20%/30% on fixed costs will expose the whole charade that the bankrupt of england are playing.

Share this post


Link to post
Share on other sites

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

Which completely destroys any incentive to save which stores up even bigger problems in the future...

The government now keeps encouraging people to save, but even with <20% inflation there is little incentive to do so. Save £1 get 80p back...

If you plan to hyperinflate regularly why even bother to save in the first place? It would be receive wages instantly buy gold.

Share this post


Link to post
Share on other sites

Mervyn Kunt has no such financial constraints yet somehow cannot afford a senior citizens railcard himself - I suspect his knowledge of the deliterious effects of his reign as king of the bankrupt of england is near zero.

Mervyn and his ilk know exactly what they are doing, they are just pretending to be thick to avoid being lynched for their evil plans.

Share this post


Link to post
Share on other sites

A much better solution is to convert all pensions from pension pots into pay-as-you-go. The effect of these massive pools of savings failing to be recycled back into the economy and used to seek yield to pay for a burgeoning ageing population is one of the factors yet to gain much prominence to explain the fall in yields and the rise in asset prices over the last 30 years.

These savings pools dwarf by far the much maligned sovereign wealth fund / trading surplus countries.

My solution would be to simply eradicate the entire missold pension industry with its unkeepable promises. Replace with a much better basic state pension which can be augmented by ISAs. The tax benefits for those who are able to save so much of their annual wage does not encourage 'balanced trading' between individuals in the community and has the effect of reducing the better off's tax bill to virtually nothing in many cases which is regressive.

That sounds like a sensible solution, therefore it's entirely out-of-place on HPC.co.uk.

Share this post


Link to post
Share on other sites

First you have to understand that money serves a dual purpose in our society. It is a store of value and a medium of exchange.

Take two communities, in both the elderly people have very large savings accounts. In community A the elderly people are freely spending down their savings. And since there is a finite amount of labour available in their area, they are bidding against each other for that labour. Hence the price of the labour is rising.

This both creates opportunity and some real money for the working population, and makes it easier for them to pay the heavy taxes to pay for the pensions and benefits of the elderly people. This is the virtuous economy we have to get to.

In community B, the elderly also have very large savings accounts. But they are deciding to hold on to them, roll over their bonds, cut back on their expenses.. never dip into their 'capital'. Obviously there is little work to go around for the working age people, and since there is a surplus of labour, the price of labour moves towards the national minimum wage. (a sad partial solution to a collective action problem).

Its getting harder to pay for pensions and benefits because little economic activity is happening in community B. Both the elderly spending directly, and then teh workers inability to spend money they don't have.

Community B must either force the very rich to spend their money, or print money and effectively spend it for them. It must do this until the society reaches full employment and the value of labour starts rising. The inflaiton number required to achieve this doesn't really matter, whether its 3% or 30%. That is why I agree with Mervyn King that we can't raise interest rates until unemployment comes down. Even if we get hyperinflation. Yes hyperinflation is scary.. but the community B economy is dead in the water soon enough, so its not a viable option.

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

Absolutely retarded in so many ways, the others have already ripped your argument to shreds and I'm sure more will follow. All I will add though is that not only is there nothing really the government can do to rectify the situation, because the money they don't have, has been well and truly spent already, but they have no desire whatsoever to make it any better, only an overwhelming desire to make it much much worse by ACTIVELY doing the things that will ensure the wealth keeps getting transferred into the hands of the rich at the expense of everything else.

Share this post


Link to post
Share on other sites

First you have to understand that money serves a dual purpose in our society. It is a store of value and a medium of exchange.

Take two communities, in both the elderly people have very large savings accounts. In community A the elderly people are freely spending down their savings. And since there is a finite amount of labour available in their area, they are bidding against each other for that labour. Hence the price of the labour is rising.

This both creates opportunity and some real money for the working population, and makes it easier for them to pay the heavy taxes to pay for the pensions and benefits of the elderly people. This is the virtuous economy we have to get to.

In community B, the elderly also have very large savings accounts. But they are deciding to hold on to them, roll over their bonds, cut back on their expenses.. never dip into their 'capital'. Obviously there is little work to go around for the working age people, and since there is a surplus of labour, the price of labour moves towards the national minimum wage. (a sad partial solution to a collective action problem).

Its getting harder to pay for pensions and benefits because little economic activity is happening in community B. Both the elderly spending directly, and then teh workers inability to spend money they don't have.

Community B must either force the very rich to spend their money, or print money and effectively spend it for them. It must do this until the society reaches full employment and the value of labour starts rising. The inflaiton number required to achieve this doesn't really matter, whether its 3% or 30%. That is why I agree with Mervyn King that we can't raise interest rates until unemployment comes down. Even if we get hyperinflation. Yes hyperinflation is scary.. but the community B economy is dead in the water soon enough, so its not a viable option.

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

Capital flight (both internal and external, call's Bullsh¡t on your little scheme)

AA3, you're an American Aren't you? You live in America, do you not?.

Why do you spend so much time on here advocating massive state financial stimulus programs that never work, for a country you don't live in?

Share this post


Link to post
Share on other sites

I cannot believe that anyone can come up with such nonsense.

Paper isn't wealth, you need to focus on the real wealth (land, buildings, infrastructure, ...), not on the paper!

The ultra rich elite doesn't give a damn about paper, in fact it's them running our paper money into the ground to impoverish anyone but them.

+1

People need to remember that money is, at best, only a very flawed analogue to things of genuine wealth. And when you've got access to all the real weatlh and resources, and it's all sitting idle whilst people start suffering because the bits of paper (or bits in a computer) are in the wrong places that's just complete and utter stupidity - but stupidity that a few people do very nicely out of, thank you very much.

Share this post


Link to post
Share on other sites

Community B must either force the very rich to spend their money, or print money and effectively spend it for them. It must do this until the society reaches full employment and the value of labour starts rising. The inflaiton number required to achieve this doesn't really matter, whether its 3% or 30%. That is why I agree with Mervyn King that we can't raise interest rates until unemployment comes down. Even if we get hyperinflation. Yes hyperinflation is scary.. but the community B economy is dead in the water soon enough, so its not a viable option.

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

Have you consider allowing productive part of community B (e.g. reducing paper work and taxes) to offer the holder of saving something interesting at an attractive price to tempt

them into spending for them self or children/grandchildren (if you look carefully, there are shockingly many IHT rules to prevent such capital transfer)

If you want an inflationary monetary policy then please tell me who normally gets the money first (and convert them if needed)?

In the 1997 asian financial crisis, IMF bailed out gets into the hands of the bankers and the cronies and those gets converted immediately

into other hard currencies/something else while the peasants are the one who suffer the consequences of such inflationary policies.

Hyperinflation is not just scary, it is disastrous.

Edited by easybetman

Share this post


Link to post
Share on other sites

IR's should rise to control inflation. Whether that burys the housing market, the banks and bankrupts the debt dummies is neither here nor there imo.

The job in hand should be to control inflation and stop this stupid pretence from going on any longer. :rolleyes:

Share this post


Link to post
Share on other sites

The trouble with inflating wealth away is the rich will buy commodities, land, PM's or other physical asset to protect themselves against it. The non-rich population suffer rising prices static wages and no increase in employment.

A wealth tax as exists in France is a better solution, especially where the proceeds are used to put the unemployed into low to median wage (artificially created if necesary) jobs.

That'll be the wealth tax that is being abandoned by the current French govt?

And the proceeds were rarely used to alleviate unemployment. In the last 10yrs, French politicians have given twice as much per year back to the richest 1% of taxpayers (15B euros/yr) as they have spent on funding the national minimum unemployment benefit, called the RSA (8B euros/yr).

It's all about priorities, n'est-ce pas :rolleyes:

Share this post


Link to post
Share on other sites

Not a good solution at all from a moral hazard standpoint.

A much better solution is to convert all pensions from pension pots into pay-as-you-go. The effect of these massive pools of savings failing to be recycled back into the economy and used to seek yield to pay for a burgeoning ageing population is one of the factors yet to gain much prominence to explain the fall in yields and the rise in asset prices over the last 30 years.

These savings pools dwarf by far the much maligned sovereign wealth fund / trading surplus countries.

My solution would be to simply eradicate the entire missold pension industry with its unkeepable promises. Replace with a much better basic state pension which can be augmented by ISAs. The tax benefits for those who are able to save so much of their annual wage does not encourage 'balanced trading' between individuals in the community and has the effect of reducing the better off's tax bill to virtually nothing in many cases which is regressive.

Its sort of funny that the growing savings pools to pay for all the pensions isn't understood to be driving down yields. To their logical conclusion where real yields are negative.

(actually the real logical conclusion was the bankruptcy of some or all of the banks and the wipeout of the junior creditors, aka the savers.) But the government intervened to stop that. So imo even if 50% of their savings are inflated away in real terms, they are getting an incredible bailout, compared to the free market solution of the financial institutions going through bankruptcy court.

I also agree that pensions for this reason need to be pay as you go.

Finally good point about the tax incentives to save up even more money. When those laws were put in place Britain needed savings to rebuild capital after the war. And the big public infrastructure push, like we see in the developing world today. But like so many things in our society the current inheritors of the institutions have no concept of why things were set up the way they were. Seeing things in simplistic notions, like encouraging savings is good. But not asking why is it good.

The boomers were the first generation where the elites weren't avid readers. Instead watching television. So without an inability to understand why the system was designed the way it was.. when the game makes a fundamental change, they have no ability to respond to the change.

Edited by aa3

Share this post


Link to post
Share on other sites

I know there will be people on this forumw ho take offense to this idea, and think that TPTB are devauling their measely £30,000 in savings. But realize we are talking about people with millions of pounds in bonds as the main target. These money hoarders also have an easy way out.. simply spend the money and buy something, including equity investments. If enough of them did that, the problem would self correct.

Not at all. I think it is an excellent plan. The global transfer of wealth from those that hold it in paper to those that hold it in hard assets and real money is a once in a lifetime opportunity, and one that has come just at the right time in life for me too, as I will be young enough and free enough to thoroughly enjoy my new found wealth.

THANK YOU MERV, THANK YOU GORDON, THANK YOU BENNY AND THE INKJETS, THANK YOU GREECE, THANK YOU BANKS, THERE ARE REALLY TOO MANY TO MENTION, BUT I THANK THE WHOLE STUPID AND/OR CRIMINAL LOT OF YOU. BLESS YOU!!! :)

Share this post


Link to post
Share on other sites

The trouble with inflating wealth away is the rich will buy commodities, land, PM's or other physical asset to protect themselves against it. The non-rich population suffer rising prices static wages and no increase in employment.

A wealth tax as exists in France is a better solution, especially where the proceeds are used to put the unemployed into low to median wage (artificially created if necesary) jobs.

Thats not a problem its a feature. Say the rich figured out that the government was willing to inflate away a substantial part of their money. And they rushed to buy property to protect themselves. This is going to drive prices, way, way up. If all the super rich were to successfully get all their money into property, they would have to outbid each other for the current available supply. Meaning prices would go to the moon.

So that is bad for poor renters right.. Not really. Whoever the rich buy the house from at moon prices is going to have huge cash to spend in the economy. Which most people will blow through it quite quickly. That creates opportunity.

Remember whoever gets the cash for the land is then stuck with a bunch of cash that is declining in value. At some point buying land is no longer the best path. There is only one final way out, spend the cash improving the land, or building capital.

Share this post


Link to post
Share on other sites

Not at all. I think it is an excellent plan. The global transfer of wealth from those that hold it in paper to those that hold it in hard assets and real money is a once in a lifetime opportunity, and one that has come just at the right time in life for me too, as I will be young enough and free enough to thoroughly enjoy my new found wealth.

THANK YOU MERV, THANK YOU GORDON, THANK YOU BENNY AND THE INKJETS, THANK YOU GREECE, THANK YOU BANKS, THERE ARE REALLY TOO MANY TO MENTION, BUT I THANK THE WHOLE STUPID AND/OR CRIMINAL LOT OF YOU. BLESS YOU!!! :)

If you see where things must go, and jumped first.. you deserve to be made wealthy. If you are part of the herd and try to make a stampede for the exits when the rest of the herd does.. you are going to be trampled.

Share this post


Link to post
Share on other sites

Way too much thought going on here.

The rich and powerful will do whatever keeps them rich and powerful.

Only armed revolution will change this.

Let the proles revolt if they want. I recommend not getting mad and putting yourself in the way of a police baton, but getting even by buying some gold.

Share this post


Link to post
Share on other sites

If you see where things must go, and jumped first.. you deserve to be made wealthy. If you are part of the herd and try to make a stampede for the exits when the rest of the herd does.. you are going to be trampled.

Of course, you are outlining the general tenets of sound investing.

I jumped in pretty early and have a significant equity buffer against any stampede. Not that we have a herd to stampede yet, or the necessary changes in fundamental conditions to precipitate a stampede.

Even on here, where the level of economic literacy is higher than in the general population, there is only a lukewarm appreciation of gold at best and still much forthright to investing in gold opposition, despite mounting evidence to the contrary. So in general we are pretty much as far away from a stampeding herd as we were a couple of years ago.

Share this post


Link to post
Share on other sites

Even on here, where the level of economic literacy is higher than in the general population, there is only a lukewarm appreciation of gold at best and still much forthright to investing in gold opposition, despite mounting evidence to the contrary. So in general we are pretty much as far away from a stampeding herd as we were a couple of years ago.

The funny thing I have heard though even back in 2003-2006 was that Gold is too expensive! If it was expensive at 1/3 of the price it is now, then it looks like even fewer will buy due to the fall in paper vs the yellow stuff.

Share this post


Link to post
Share on other sites

The funny thing I have heard though even back in 2003-2006 was that Gold is too expensive! If it was expensive at 1/3 of the price it is now, then it looks like even fewer will buy due to the fall in paper vs the yellow stuff.

Very true. There's a lot of 'rabbit in headlights' type attitude going on. I feel a poem coming on...

WAKE UP! WAKE UP! FLUFFY FRIENDS

AS MERV'S TRUCK SWERVES AROUND THE BEND

LOADED WITH ITS INFLATIONARY DIRGE

JUST JUMP FOR THE SAFETY OF THE GILDED VERGE!!!

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.