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Moaning About Bad Returns On Your Savings? Stop Complaining – It's Your Fault That Interest Rates Are So Low

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Do savers really believe a 10 per cent fall in the value of their house is a price worth paying for a couple of extra percentage points of interest on their current accounts?

Yes

Savers complain about low returns on cash, yet fail to appreciate the benefit to the rest of their savings portfolios from monetary stimulus.

Ah yes, the rest of my savings portfolio...

http://www.independent.co.uk/voices/interest-rates-low-return-on-savings-stop-complaining-its-your-fault-a7193986.html

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pension pots have been greatly boosted by the Bank’s low interest rates and monetary stimulus since 2009.

Oh yes then give the figures and don't forget the deficits and funds like BHS etc.

One suspects that on average that (the greatly boosted bit) just isn't true. That is if accurate figures are used - one suspects that most independent journalists wouldn't know an accurate figure if it was staring them in the face, like the rest of the MSM.

Even during boom times pension"pot" returns were often abysmal once you took into account all the pension fund fraud, thievery and executive bonus grabbing and plush office expenditure so widespread and prevalent. Especially in the years in the run up to the economic collapse, a collapse which damaged many pensions. Any decent improvement would be immediately thieved. That and government filching like under Brown.

Also not everybody just started their pension "pot" after the economic collapse.

"the rest of their savings portfolios" - farce, delusion and outright spin for the average person

Edited by billybong

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Perhaps the biggest misconception about savings is that low returns on cash deposits are somehow all the fault of the Bank of England. This shows a glaring ignorance of the bigger economic picture.

:lol::lol::lol:

The BoE and the other central banks etc are such innocent bystanders in it all.

Ben Chu for governor.

Edited by billybong

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It's not helping FTBers saving for that massive deposit is it?

Londoners face 46-year wait to save a deposit as England and Wales average home price hits £300,000

Buy your first house at the age of 67!

Source :- http://www.standard.co.uk/news/london/londoners-face-46year-wait-to-save-a-deposit-as-england-and-wales-average-home-price-hits-300000-a3207991.html

Love the comments.

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Its the Independent?

Im not sure whats gone on there over the years but every single article is a joke.

And I mean that. Its just idiots with a newspaper.

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Its the Independent?

Im not sure whats gone on there over the years but every single article is a joke.

And I mean that. Its just idiots with a newspaper.

+1

The gender-bothering moonbat propensities of the Guardian married to the Establishment-coddling sycophancies of the Daily Mail. Truly the worst of the worst.

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"To put it simply, the world has more savings than it is able to digest. It is this global 'savings glut’ that has driven down long-term interest rates, making baseline returns so low everywhere."

That bit is true.Most has gone into government debt ($ mostly) and high dividend shares (utility/consumer staples etc)

The point they miss is that once everyone is in the same trade (deflation) the falls tend to be huge.Inflation will be back soon,as will higher interest rates,probably after a boom in commods and emerging markets.They have been in bull markets since Feb,just nobody seems to notice.

Id think overvalued property is a terrible investment,and the falls will be huge i expect.These sort of articles show the crowd all expect one thing,always the right time to do the opposite.

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Deficits running wild, cut backs in every sector, reduced portions instead of increased prices.

All that wealth is clearly there for someones benefit at the behest of savers....just cant actually see it...yes, there is more money, but there is less that it can buy.

The article ( unread) sounds like a money printers sales blurb.

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When/if out of control inflation hits......interest rates will have to rise.

Inflation = lots of money pushed into the system, created to kill debt but also increases prices......up to the people whether they choose to buy it. ;)

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Deficits running wild, cut backs in every sector, reduced portions instead of increased prices.

All that wealth is clearly there for someones benefit at the behest of savers....just cant actually see it...yes, there is more money, but there is less that it can buy.

The article ( unread) sounds like a money printers sales blurb.

Its mostly all sat in $s doing nothing.It can only be a matter of time before some starts to look for better returns.A trickle,then a flood.There are countries and assets sat at multi decade bottoms.The silver miners and gold miners have gone up 200%+ in a few months,in the past energy and commods have always followed,then emerging markets.

Its pretty certain interest rates will follow in a year or so when inflation comes back hard.I just dont think going with the deflation idea forever at this stage is wise at all.That article is saying it is deflation forever.With Fiat,hmm.

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Its mostly all sat in $s doing nothing.It can only be a matter of time before some starts to look for better returns.A trickle,then a flood.There are countries and assets sat at multi decade bottoms.The silver miners and gold miners have gone up 200%+ in a few months,in the past energy and commods have always followed,then emerging markets.

Its pretty certain interest rates will follow in a year or so when inflation comes back hard.I just dont think going with the deflation idea forever at this stage is wise at all.That article is saying it is deflation forever.With Fiat,hmm.

The counter argument to that is Japan with its 20+ years of stagnation and deflation - that's not to say I disagree with your argument but given the amount of money so far printed I find it both strange and worrying that the inflation I would expect just isn't appearing anywhere..

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The Yen carry trade / 'Mrs Watanabe' savings glut from the '90s falling IRs in Japan is potentially a major contributor to Western HPI beginning last decade.

The article does seem to place the cart before the horse, but Boomers who bought a house last century have seen a massive increase in their wealth (on paper anyway), so why are they whingeing about other returns being lower.

A reader's letter in a local rag from a Boomer bemoaned the fact that they had to pay double digit interest rates to borrow money and now they've paid off the house and have excess cash face ultra-low IRs on any savings. I can see the point, but as has been shown on this site, a high capital loan at low IRs ultimately costs much more in total than a smaller capital loan at high IRs.

Edited by rantnrave

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The counter argument to that is Japan with its 20+ years of stagnation and deflation - that's not to say I disagree with your argument but given the amount of money so far printed I find it both strange and worrying that the inflation I would expect just isn't appearing anywhere..

....Whats worrying is that it has appeared and you dont see it.

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....Whats worrying is that it has appeared and you dont see it.

Where? If you mean house prices they haven't changed in 12 years around my neck of the woods and are starting to fall again...

Food costs about the same it always has and petrol is cheaper than its been for a few years,,,

Edited by eek

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Where? If you mean house prices they haven't changed in 12 years around my neck of the woods and are starting to fall again...

Food costs about the same it always has and petrol is cheaper than its been for a few years,,,

No, just London/SE prices and the areas that have seen massive rises off the back of it.

This is like targeted inflation that has benefited the rich london types.

And we're all paying for it.

If you take average house prices excluding London SE very little inflation

If you take average house prices including London SE we're now see 10% yoy inflation.

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No, just London/SE prices and the areas that have seen massive rises off the back of it.

This is like targeted inflation that has benefited the rich london types.

And we're all paying for it.

If you take average house prices excluding London SE very little inflation

If you take average house prices including London SE we're now see 10% yoy inflation.

That's not inflation in the traditional sense. That just a bubble in a particular asset class - which will correct itself. When this last occurred the rise moved across the country through 2003-5. That's definitely not the case this time around the 3% stamp duty change has stopped it in its tracks...

Edited by eek

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Where? If you mean house prices they haven't changed in 12 years around my neck of the woods and are starting to fall again...

Food costs about the same it always has and petrol is cheaper than its been for a few years,,,

Agree a lot of the North of England is technically still in a housing recession having not regained peak values from as long ago as 2004.

I guess low interest rates are there to save overstretched debt ratios in places like Cambridge, Hackney and Manchester at a cost to wealthy unmortgaged boomers in places like Surrey and the Derbyshire Dales (wealthiest by household savings in north).

Of course, the real losers are those saving for a house or refuse to buy at the crazy prices in the south especially.

http://money.aol.co.uk/2014/09/06/brits-leave-saving-until-they-are-over-50/

Edited by crashmonitor

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No, just London/SE prices and the areas that have seen massive rises off the back of it.

This is like targeted inflation that has benefited the rich london types.

And we're all paying for it.

If you take average house prices excluding London SE very little inflation

If you take average house prices including London SE we're now see 10% yoy inflation.

True,an amount has gone into western housing (in the UK mostly just the south),but its nothing compared to how much has gone into the $ and US assets.Japan is a good example as mentioned,but the US trounces it.The key for me is if people start to invest into assets at multi decade bottoms and pull out of the $.If the $ index falls back instead of rising to 100 again inflation expectations will shoot up.

I wouldnt go all in on inflation,and balance is needed,but i admit iv been picking up commods,commod miners,gold miners,silver miners,and energy/commod driven markets like Columbia/Norway/shipping ETFs since March.The article seems to be towing the line 99% of people think,its deflation forever because its different this time.Its that group think that makes everyone jump aboard property and consumer staple 3% yield shares.

People in cash who want a house,or who dont like investing should stick it out,and ignore the premise of the article.Its designed to say,if you havent jumpred into housing and dividend paying consumer staple stocks do it because interest rates are never going up.

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People in cash who want a house,or who dont like investing should stick it out,and ignore the premise of the article.Its designed to say,if you havent jumpred into housing and dividend paying consumer staple stocks do it because interest rates are never going up.

Meanwhile the Establishment doing its damdest to abolish normal economic cycles and ensure zirp forever. Interest rates should impact the population equally whichever way they go, but the dice are definitely being loaded to the asset owning indebted half.

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Of course journalists like Ben Chu should take a huge dollop of blame for interest rates being so low seeing as they accept everything the central bankers have to say on the subject without argument.

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