Wealth Crash

[newbie]

It looks like you can be too successful in hoarding wealth...

http://ftalphaville.ft.com/blog/2011/08/18/656736/the-high-powered-money-problem/

If savings — a.k.a. collateral — are to be eroded, the man or institution that stands strongest in the end, is the one who has managed to insure as much of that capital and principal as possible. The assumption being that further down the line how much you earn will become more important than how much you manage to accumulate or hoard.

And that’s a problem for anyone reaching the end of their natural working life.

Thus, what we may have is a financial crisis coupled — or at least partly exaggerated — by a demographic crisis. Too many savers are now ready to cash-in on accumulated wealth. Wealth they expect to be there, even though on a wider economic scale it’s never been replaced by the indebted younger generation.

Savings, collateral and hoarded wealth will all naturally suffer as a result. The last category mostly dependent on how legislation plays out (what degree gold and land rights are maintained and respected, for example).

Or what you could say is that savings and collateral may become inferior goods versus high incomes. (The high income being the most preferable good of all.)

And that’s a whole new bunch of nonmonetary economic effects to consider.

[Wurzel Of Highbridge]

The best investment you can make is investing in yourself.

Get a good education, you do not need to go to university to study these days. Everything can be found on books and the internet. Find a good study guide or a course prospectus and do the work.

There are many fields including Engineering, Building, Manufacturing that require skills and experience not paper.

[VeryMeanReversion]

It looks like you can be too successful in hoarding wealth...

http://ftalphaville.ft.com/blog/2011/08/18/656736/the-high-powered-money-problem/

Very interesting stuff.

My view has been gradually changing to see that money is just a belief system and doesn't really mean anything other than being a taxpaying token. I've insured my wealth by buying a small house with land. I think UK land rights should survive just about anything.

[VeryMeanReversion]

The best investment you can make is investing in yourself.

Get a good education, you do not need to go to university to study these days. Everything can be found on books and the internet. Find a good study guide or a course prospectus and do the work.

There are many fields including Engineering, Building, Manufacturing that require skills and experience not paper.

The best investment has been to lie and load up on as much debt as possible during the boom and then get out before its too late.

[erranta]

The best investment has been to lie and load up on as much debt as possible during the boom and then get out before its too late.

We should be disgusted with our Govts and leaders for propping up the very wealthy thru not letting their wealth collapse along with their bent, bankrupt, banks

(and mass over-lent mortgage/houseprice defaults)

[newbie]

The FT post makes an interesting point: if a small group hoards nearly all the wealth, it can end up destroying it.

[wonderpup]

The FT post makes an interesting point: if a small group hoards nearly all the wealth, it can end up destroying it.

That's not the funny part- the funny part is when they realise that they have organized the world to maximize this process of wealth extraction but have no idea how to make it stop.

The one real downside to suborning the power structure is that you become the power structure- and then discover that 'you' consist of a disorganised rabble of oligarchs who know all there is to know about looting the system and jack shite about how to make that system work.

So now it's headless chicken time.

[South Lorne]

We should be disgusted with our Govts and leaders for propping up the very wealthy thru not letting their wealth collapse along with their bent, bankrupt, banks

(and mass over-lent mortgage/houseprice defaults)

...the Government who did that have gone ..Gordo and chums....the present gang have promised not to save any Bank in trouble or... in other words ....will not spend the tax payers money saving any such Bank.....

[interestrateripoff]

Sounds more like a ponzi scheme, ponzi only works up until the point where everyone needs paying. Once that moment hits it's game over.

[South Lorne]

Sounds more like a ponzi scheme, ponzi only works up until the point where everyone needs paying. Once that moment hits it's game over.

...like a rumoured Bank run...?...

[wonderpup]

...the Government who did that have gone ..Gordo and chums....the present gang have promised not to save any Bank in trouble or... in other words ....will not spend the tax payers money saving any such Bank.....

I didn't see Dave on his feet demanding 'Gordo and chums' let RBS go down- too busy sucking off his banking mates I expect. It's laughable to suggest that the son of a merchant banker is going to let any banker suffer if there is even a drop of taxpayer cash available to prevent it.

For all his rhetoric on the evils of welfare dependency I feel sure an exception would be made for the banksters.

The only critique I ever saw Dave utter on the subject of bank regulation was to complain that Brown had not deregulated enough!

[South Lorne]

...the son of a merchant banker ....

...stockbroker...as was the grandfather and the great grandfather worked for HSBC ...

[Lone_Twin]

...stockbroker...as was the grandfather and the great grandfather worked for HSBC ...

Never let facts get in the way of a foamy mouthed rant.

[billybong]

Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy.

"Uncertainty" - to say the very least

Typified by incompetent governments and financial institutions investing huge sums in maintaining and investing in the last huge investment bubble past its sell by date e.g. housing.

Typified by incompetent governments and financial institutions keeping investing bigger and bigger sums in supporting the failed economies of countries economies past their sell by date.

Typified by incompetent governments and financial institutions keeping investing bigger and bigger sums in supporting their pet political projects past their sell by date.

Etc.

Edited August 19, 2011 by billybong

[wonderpup]

...stockbroker...as was the grandfather and the great grandfather worked for HSBC ...

Can you quote single instance where Cameron even suggested that deregulating the bankers was a bad idea? It's pointless to pretend the tories would have done anything to restrain the banking gravy train- they would have been up front shovelling more coal into the engine.