'Baby-boomers own half of Britain's wealth' telegraph article today.

Kohoutek

baby_boomer wrote: »

And yet we still managed to install indoor loos, central heating, import more exotic food, transform the health of the nation and benefit from the global technological revolution notwithstanding a process you say has been underway for a century .

Aren't you forgetting the fact that every 18 months the same size chip has x2 the capacity?

You surely aren't saying no growth for ever are you? Economic life is about change and overcoming problems. We've overcome plenty in the past - two world wars, the loss of empire, 1929, the oil price rise in the 1970s etc. We're not complete numpties - in spite of our educational failings.

Well if you go from the richest country in the world to the sixth richest over a hundred years it's still pretty good for a lot of people...but the problem is how far will our economy and currency continue to fall in relation to other rich countries? The inevitable result is a decline in living standards.

I don't know what you mean by 'overcoming' world wars or the end of the British Empire - Britain emerged from those periods a poorer country relatively speaking, with far less military and geopolitical power. The Wall Street crash and oil crisis were out of our hands...

Try imagining what the eighties or early nineties would have been like without the money the government raised from North Sea oil and the massive wave of public sector privatisations...that's probably what the next decade will be like. We have virtually no oil left, no government assets left to flog, very little manufacturing. Do you realise why so many African countries are so poor...one key reason apart from corruption is because they produce virtually nothing of value to the rest of the world. What does Britain produce or could reasonably produce in the next decade the would justify your prediction of prosperity?

HAMISH_MCTAVISH

Kohoutek wrote: »

We have virtually no oil left,

Actually, thats not quite true.....

We have extracted around 60% of proven reserves in the last 40 years.

There's between 20 and 30 years left, and still the possibility of significant oil but particularly gas finds off the west coast in the Atlantic.

baby_boomer

Kohoutek wrote: »

the problem is how far will our economy and currency continue to fall in relation to other rich countries? The inevitable result is a decline in living standards.

The basis of your argument is a non-sequitor.

Kohoutek

baby_boomer wrote: »

The basis of your argument is a non-sequitor.

It's spelt non-sequitur actually. You know what I mean anyway, you're just picking apart at the syntax of my argument not the underlying facts. If you want that statement in more unambiguous English, I meant: Britain is poorer relatively speaking than a hundred years ago and given our economic feebleness, its wealth, through its share of world GDP and purchasing power of the pound, will continue to decline.

baby_boomer

Kohoutek wrote: »

'The future will always be better' is not an argument.

I'm afraid that is is my argument and you are wrong to dismiss it.

I'm not saying that growth rates will match the past, but I am saying that there is no way that the UK will not benefit from global innovation in the future. We have the rule of law and speak the international language of the financial world. And we still attract zillionaires to London who seem happy to give £10 millions to working class footballers who spend their money here.

Kohoutek wrote: »

I don't know what you mean by 'overcoming' world wars or the end of the British Empire - Britain emerged from those periods a poorer country relatively speaking, with far less military and geopolitical power. The Wall Street crash and oil crisis were out of our hands...

I mean that, whatever was thrown at us - internal or external & it was some quite serious stuff - our collective wealth continued to grow in the long term .

If want to look at history, look at the period 1000-1750 too, where China and India were much more economic productive and wealthier than the West.

That was before globalisation where innovation in one part of the world spreads to others inside a decade.

Re your point about China's low costs. It is a factor in keeping prices down, but don't be surprised if and when capital finds other low cost markets. That's how the system works.

In the meantime all developed economies will continue to benefit from the drop in production costs which will continue to come from improved science and innovation.

This will help us in our struggle against our awful deficit, the possible cost of future bank bail-outs and the tax rises / cuts in public spending which are heading our way.

I echo the points made by an earlier poster. If your diagnosis is so dire, you should surely up sticks and leave the UK. You'd be mad to stay .

And why are you so out on a limb compared to the economic experts (British & international) whose job it is to predict the UK flight path?

And even if you're right then we'll have to face up to it with different policies in order to restimulate our economy and get back on track. Even the BBC will eventually accept economic truth if it hits them in the face every year for a decade . And the electorate & politicians would make the same journey.

But you're unlikely to be right. You're just having a bit of hot air fun.

jw2003

Just harking back to the first post, while it may seem that 'baby boomers' have amassed the most wealth I would like to think that in 40 years time when my mortgage has been repaid, my children will be adults, possibly with children of their own, having recently retired that I could also consider my home to be of a more significant asset than it is now, savings, no debts ie car finance etc otherwise what on earth am I working towards now. My inlaws are what you could call typical baby boomers and I hate to think that they should face any financial penalties for working hard, buying wise and saving well

Radiantsoul

Kohoutek wrote: »

Well if you go from the richest country in the world to the sixth richest over a hundred years it's still pretty good for a lot of people...but the problem is how far will our economy and currency continue to fall in relation to other rich countries? The inevitable result is a decline in living standards.

It simply isn't true.
The fact is that although our relative position might decline our absolute position can still improve. The decline of the relative UK was probably a historic certainty, we gained the first mover advantage in the agricultural and industrial revolutions. But as these spread out geographically other nations were going to catch up, especially higher populations and more resources.

The fact other nations get richer actually helps us as some of their increase productivity spills over as a benefit to us in terms of lower prices and better products. Even if the UK stagnated entirely I think our standard of living might well rise if the rest of the world continued to grow.

Kohoutek

Radiantsoul wrote: »

The fact other nations get richer actually helps us as some of their increase productivity spills over as a benefit to us in terms of lower prices and better products. Even if the UK stagnated entirely I think our standard of living might well rise if the rest of the world continued to grow.

A huge proportion of the products on which we depend to maintain our standard of living are imported. If the purchasing power of your currency declines, then imports obviously become more expensive. I think further decline in the value of the pound is a reasonable assumption given the weakness of manufacturing to provide a reason for foreigners to buy sterling, the lack of Britain's fiscal credibility and the low interest rates necessary for propping up inept financial institutions.

With the decline in the purchasing power of the pound to buy imported consumer goods and inevitable crushing increases in taxation to close to the gap in the 12% deficit and huge increase in liabilities arising from an ageing population, why is a drop in living standards from the late 2000s not likely in the next decade?

Kohoutek

baby_boomer wrote: »

I mean that, whatever was thrown at us - internal or external & it was some quite serious stuff - our collective wealth continued to grow in the long term .

Wake up. We are virtually the most indebted country in the world.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/volcker/McK%201.jpg

baby_boomer wrote: »

And why are you so out on a limb compared to the economic experts (British & international) whose job it is to predict the UK flight path?

I'm not. Just look at the outlook of experts who aren't effected by vested interests. I can't be bothered to do a google search for you, but here's one by an investment manager at a firm with assets of $1 trillion. It's been reported on the FT, Times, Telegraph etc, here's an easy accessible version:

http://www.dailymail.co.uk/news/article-1246389/Bill-Gross-UK-recession-The-British-economy-sits-bed-nitroglycerine-investors-warned.html

Radiantsoul

Kohoutek wrote: »

A huge proportion of the products on which we depend to maintain our standard of living are imported. If the purchasing power of your currency declines, then imports obviously become more expensive. I think further decline in the value of the pound is a reasonable assumption given the weakness of manufacturing to provide a reason for foreigners to buy sterling, the lack of Britain's fiscal credibility and the low interest rates necessary for propping up inept financial institutions.

With the decline in the purchasing power of the pound to buy imported consumer goods and inevitable crushing increases in taxation to close to the gap in the 12% deficit and huge increase in liabilities arising from an ageing population, why is a drop in living standards from the late 2000s not likely in the next decade?

I think a drop is plausible as the saving gap is closed. The UK does need to save more and so consumption must fall.
But what I don't think is likely is the idea that other nations getting richer can make us poorer. If we become less competitive our prices and wages will fall, however this ought to be offset by lower prices on goods we buy. If the world GDP increases then all parties ought to gain from it, although how that is split will be hard to tell.