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The Masked Tulip

Newsnight Did Something On Savers And Houses Last Night...

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...but I only caught a bit of it as I can no longer be bothered listening to all this BBC stuff... The little bit I heard said, more or less, that savers are screwed.

Due to inflation they are losing money year-on-year and with low interest rates they are basically paying the banks to 'look after their money'.

They should take their money out of the banking system.

But they won't. You can't blame the wolf for eating the sheep if the sheep willingly walks into the wolf's den, passes the wolf a knife and fork and then lies on its back in front of it.

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...but I only caught a bit of it as I can no longer be bothered listening to all this BBC stuff... The little bit I heard said, more or less, that savers are screwed.

Quite interesting, the three panel members from an economist, saver's champion and someone in housing agreed that stoking up an existing bubble was going to end in tears, probably after 2015 with the mother of all crashes. They thought BTL was a very risky investment at the moment but that FFL was aimed at helping rich buyers get even more BTL properties and it would not help FTBers.

House Price ramper said people were once again buying property just for the capital gains they expected over the next 2 to 3 years rather than any rental return.

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Due to inflation they are losing money year-on-year and with low interest rates they are basically paying the banks to 'look after their money'.

They should take their money out of the banking system.

But they won't. You can't blame the wolf for eating the sheep if the sheep willingly walks into the wolf's den, passes the wolf a knife and fork and then lies on its back in front of it.

It depends what the money is going to be used for. If it earmarked for the purchase of a currently depreciating asset then you're quids in. Those with reasonable amounts of cash in the bank spend very little of it on consumables.

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Quite interesting, the three panel members from an economist, saver's champion and someone in housing agreed that stoking up an existing bubble was going to end in tears, probably after 2015 with the mother of all crashes. They thought BTL was a very risky investment at the moment but that FFL was aimed at helping rich buyers get even more BTL properties and it would not help FTBers.

House Price ramper said people were once again buying property just for the capital gains they expected over the next 2 to 3 years rather than any rental return.

http://www.bbc.co.uk...ght_09_08_2013/

Warning. Telly smashing stuff.

Edited by aSecureTenant

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It depends what the money is going to be used for. If it earmarked for the purchase of a currently depreciating asset then you're quids in. Those with reasonable amounts of cash in the bank spend very little of it on consumables.

All true

Although I confess that I have spent more this year than usual on 'consummable' / discretionary items, but that is only because I have managed to negotiate deals for cash purchases that represent up to a 60% discount upon what I would have been asked to pay the last few years, and at those prices it was worth spending/having.

But, by and large, I don't spend - yet.

I do have a slight concern that having benefited from renting for over 25 years I may decide to never buy a house and instead choose to rent forever, and just use capital drawdown until death. In which case I will need to change my focus towards maintaining the value of my savings against other assets, at which I am a novice, unfortunately.

Edited by LiveinHope

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Ive heard no-one say this extending low rate plan is a good idea other than some silly bint in a house she couldnt afford in brighton grateful for a stay of execution.

I suppose we ought to be content to some extent at least that eyes are open to the downsides of this bubble stoking and it is actually being referred to as such.

But then again since when did public opinion or indeed expert opinion have any bearing on government policy, it is always driven by who has their fingers in what till.

Scum.

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...but I only caught a bit of it as I can no longer be bothered listening to all this BBC stuff... The little bit I heard said, more or less, that savers are screwed.

Maybe an older person relying on interest? But they will just have to spend some of their capital. I would rather have a couple of years living expenses in the bank at 2% than have paid double what I should for a house at 4%. The only outcome to fear then is total collapse in the belief of paper currency, which if it happened, would mean abandoning your over-mortgaged house anyway as people would start going ape-shit and stealing/occupying what they needed? From my standpoint food and rent inflation is not happening, my rent is down 50 p.m, and vegetarian meals can be prepared from scratch (even ready meals have to be discounted to shift now) very cheaply. The media wants to run this narrative because the real narrative is "Those with Jumbo mortgages and their lenders are screwed"

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I think they want the savers to stop spending......they will then save lots of money.

Savers spending their savings and borrowing to buy a BTL won't make them any better off. ;)

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I think they want the savers to stop spending......they will then save lots of money.

Savers spending their savings and borrowing to buy a BTL won't make them any better off. ;)

Indeed. Makes one wonder on which pole a swing in saver attitudes would be most likely to bring about the (proper) end game...

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Holding cash is for losers? Suggests to me that the institutional crooks have got a lot of shares they want to offload before Benny tapers...

When a City 'expert' says 'invest' it generally means he/she expects the market to fall, wants to sell out of a position and get short.

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Holding cash is for losers? Suggests to me that the institutional crooks have got a lot of shares they want to offload before Benny tapers...

When a City 'expert' says 'invest' it generally means he/she expects the market to fall, wants to sell out of a position and get short.

Exactly.

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Holding cash is for losers? Suggests to me that the institutional crooks have got a lot of shares they want to offload before Benny tapers...

When a City 'expert' says 'invest' it generally means he/she expects the market to fall, wants to sell out of a position and get short.

Sounds about right, they will need someone to sell to? Problem is I think Joe Shitbox is all out of buying tokens :lol:

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Quite interesting, the three panel members from an economist, saver's champion and someone in housing agreed that stoking up an existing bubble was going to end in tears, probably after 2015 with the mother of all crashes. They thought BTL was a very risky investment at the moment but that FFL was aimed at helping rich buyers get even more BTL properties and it would not help FTBers.

House Price ramper said people were once again buying property just for the capital gains they expected over the next 2 to 3 years rather than any rental return.

Great stuff, the UK sheeple need it rammed into their heads that their little ex-council box is worth 20 - 30k if they are lucky, and some more banks and VI`s need to go bust.

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It would be interesting if a movement could form to give savers a voice. They could dictate to the banks a higher interest rate is needed, or all the money could be pulled and collapse them. Move money around, those that don't play ball don't get the cash.

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I gave up after 10 years this year and bought a house, the government schemes and realization that rates aren't going up whatever happens was the last straw for me.

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It would be interesting if a movement could form to give savers a voice. They could dictate to the banks a higher interest rate is needed, or all the money could be pulled and collapse them. Move money around, those that don't play ball don't get the cash.

It would be like the miners going on strike the day after Thatcher discovered she had the magical power to make infinite quantities of mined coal appear just by clicking her fingers.

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I gave up after 10 years this year and bought a house, the government schemes and realization that rates aren't going up whatever happens was the last straw for me.

Same here. Sold in 2006 and can get back into the UK market at 2006 rates but won't be able to after next year. H2B will push prices up by 20%.

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The greatest cost is never mentioned. Its not simply a straight transaction from Saver to borrower, its the dilution and theft of every pound earnt as well. Before QE, oil dropped to $33 a barrel. Now its over $100. You could buy twice the stock market then you could now. Obviously, these are liquid markets with high turnover, so deflation was immediate. But after a few months, similar falls in food and other living costs would have been recorded.

So people have lower mortgage costs. Every other living cost has vastly risen from where it would otherwise be.

Most people dont have much savings, so its pointless to use that as a popular argument against 'stimulus'. However most are paid in pounds. If they realized just how much cheap mortgages really cost them, they'd be out on the streets. Its not just accumulated savings that are stolen. Its part of every new pound earnt.

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I gave up after 10 years this year and bought a house, the government schemes and realization that rates aren't going up whatever happens was the last straw for me.

Nothing wrong with buying to live in.....the highly indebted can always walk away.......BTL is investing capital at high risk for income and growth, that is a completely different kettle of fish. ;)

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Nothing wrong with buying to live in.....the highly indebted can always walk away.......BTL is investing capital at high risk for income and growth, that is a completely different kettle of fish. ;)

It is a risk but so is being over exposed in sterling cash in the current environment. 50% in property/50% in cash seems a better bet and I've had enough of trying to chase decent interest rates every year just to stand still.

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It is a risk but so is being over exposed in sterling cash in the current environment. 50% in property/50% in cash seems a better bet and I've had enough of trying to chase decent interest rates every year just to stand still.

Because there are no other assets mind you

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