Monday, January 12, 2009

Punishing savers is no way to help the economy

Punishing savers is no way to help the economy

"I have nothing but sympathy for people facing repossession. But I also have sympathy for people who sensibly didn’t buy and are now being penalised for it."

Posted by damien @ 12:50 PM (1174 views)
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4 thoughts on “Punishing savers is no way to help the economy

  • stillthinking says:

    In other words, propping up house prices artificially is leading us into deflation as the desire to borrow collapses. Also sound money! Wow. What a crazy idea!

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  • The psychology is “oh look they have agressively cut rates – why? Must be some teriible sh1t round the corner, people are already starting to lose their jobs and are being repossesed. Best we batten down the hatches in case we are next”.

    Or as John Septek says “the natural desire is to have a larger-than-usual pool of liquid assets that can be drawn on in case of emergencies. But this is just sensible. If you are in danger of losing your job, you should have an emergency stash to tide you over.”

    What happens if a major player fails? Do they get continually bailed out or their savers or the underlying assets which have been used as collateral. So far we have spent money on the bailing out… i am interested what happens next…..We will have to wait and see.

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  • japanese uncle says:

    These hopelessly superficial minds like Anatole Kaletsky and David Smith may better change to the Sun or the Daily Mirror, as their knowledge of ‘GCSE Economics’ is just fine in the tabloids, or they can think about applying to the situation as Crash G’s butlers at Downing 10, as the job of pouring wine for those in power profoundly fits them. Anyway to any reasonably minded audience, MoneyWeek can be a much more profitable sources of information than the Times. Incidentally the Daily Telegraph is doing remarkably well in this financial crisis, whereas the Guardian must bitterly regret its support to the economic non-policy of the Neu(rotic)Labor(atory) under the Silky, undisputed heir to Thacherism, and the champion of fraudulent ‘s investment banking dynasties, of which he is now a member.

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  • I like this bit:

    “The people who refused to buy houses in recent years and saved their money instead, are the smart money, like it or not. Those are the people who had the foresight to look beyond the latest trumped-up house price data and realise that the situation was unsustainable.”

    He’s talking about us. Vindication at last, as real house prices have already fallen to 2003 levels and show no sign of stopping.

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