Punish savers and make them spend money - The Times

dad-of-4

Geenie wrote: »

Because in the words of Yazz in 1988, singing about eviction from her home and wondering wher her next meal was coming from......"The only way is up, baby" after a down turn.

Can you deny she wasn't right, as house prices did rise!

well you live and learn, i always thought it was about drugs, and acid house parties.

skap7309

TBH regardless of what the government do i still intend to reach my target deposit. The less interest i earn on my savings - the longer i need to save - the longer before i spend my hard earned money. In my case it is backfiring?

carolt

It's by Kaletsky - the man's an idiot.

On the eve of the US election, he predicted Obama would win. I was terrified - if Kaletsky predicted it, it was, by definition, bound not to happen.

Mercifully, that was one prediction even he managed not to mess up.... :rolleyes:

dopester

Zero rates don't bother me much.

The slashing of interest rates to try and maintain high house prices is going to bring about other consequences too, which may take some time to work through. These consequences will thwart government in trying to maintain the house price super-bubble, and will surely affect other things like lowering rents further.

Quantitative easing* and shifting things around on balance sheets can't stop the deflation. (*Unless done to fully destructive ends)

When the central bank has lowered nominal interest rates all the way to zero, it can no longer further stimulate demand by lowering interest rates. This is the famous liquidity trap. When deflation takes hold, it requires "special arrangements" to "lend" money at a zero nominal rate of interest (which could still be a very high real rate of interest, due to the negative inflation rate) in order to (artificially) increase the money supply.

http://en.wikipedia.org/wiki/Deflation

There is a mounting anger in EU circles over the slide in sterling, seen by some as a deliberate 'beggar-thy-neighbour' policy evoking the Great Depression. "The 30pc fall in the pound is the biggest devaluation by any country in the single market since it was created in 1957," said one ex-commissioner. "There is going to be a serious political reaction to this in coming weeks."

But there is also a misunderstanding in Brussels, Paris, and Berlin over British motives - just as there was during the ERM crisis in 1992. The Bank of England's main concern has been to cut interest rates to head off a housing collapse and to ease credit strains. While it views the pound's fall as an added bonus in battling slump, this is a secondary effect.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4161945/ECB-deems-Britain-unworthy-of-euro.html

abaxas

What gets me is that he's paid money to be a troll.

!!!!!!

carolt

abaxas wrote: »

What gets me is that he's paid money to be a troll.

!!!!!!

Nice work if you can get it.

Rose_Crow

rodent wrote: »

If Deposits get taxed then there will a cash run on ALL savings institutions and a lot of recorded parcels leaving the UK.

Gold will become extremely popular as will fine art etc.

Get serious.

Anone who has any decent amount of savings is by definition financially aware and will seek new safer homes for their cash ...they will NOT be duped into spending it on CRAP that they neither want NOR need

What a pile of utter TOSH.

The Rodent

I agree Rodent, took the words right out of my mouth

barrooo

As soon as I hear the word economist, I find its generally safe to assume they're talking bo**ox.

A few months ago on Question Time, I think it was Hazel Blears(:mad: ), was quoting a 'nobel prize winning economist' about his thoughts on the economy, and even in this short space of time was proved wrong.

Its all right that they sit in the hallowed halls of acadaemia, making models and predictions but I would trust any of them with my money:D

margaretclare

I've read the whole article and, whether written by an 'expert' or not, I completely disagree with almost every word of it.

To take just one snippet out of the whole - tax bank deposits? The money people have (misguidedly!) put into bank savings accounts has already been taxed when it was earned. People are not as stupid as people like this author, and politicians, make them out to be.

I could go on, but why bother.

Addiscomber

So, those of us that have managed to put a few £££s aside out of taxed income are supposed to be taxed again in an attempt to force us to spend our money??

What nonsense. If we all took our money out to spend the banks/building societies (even if they could actually pay us all in the runs on them) would have even less to lend than they do now - they can hardly turn to the frozen money markets can they, or the situation wouldn't be as grim as it is, would it?

Another vote for a home safe here.