Bank of England Deputy Governor now saying we need to spend, spend, spend.

Graham_Devon

Joeskeppi wrote: »

They either spend it or lose it for nothing eventually.

So what do you suggest they spend it on, that helps the economy grow, but doesn't mean they basically lose their cash over time?

A car? No..

Maybe a house? No..

Maybe a trip to ikea to spend their dosh on an interior makeover which lasts for 5 years and becomes worthless and tired after that?

System

Graham_Devon wrote: »

So what do you suggest they spend it on, that helps the economy grow, but doesn't mean they basically lose their cash over time?

A car? No..

Maybe a house? No..

Maybe a trip to ikea to spend their dosh on an interior makeover which lasts for 5 years and becomes worthless and tired after that?

I don't know what you wanted from these examples but all are better than getting nothing, even though they may depreciate.

ChiefGrasscutter

The fun has only just started.....
Long term low interest rates will have all sorts of knock-on effects.......
Life insurers/pension providers/endowment mortgages no longer able to payout their guaranteed bonuses to their policy holders due to low returns on investments generally being one of the more spectacular possibilities - Equitable life version 2 so to speak.

Graham_Devon

Joeskeppi wrote: »

I don't know what you wanted from these examples but all are better than getting nothing, even though they may depreciate.

But the saver isn't getting nothing are they. They are getting an interest rate, allbeit it, currently lower than inflation.

You stated, in no uncertain terms that they either spend it, or lose it eventually.

What I'm asking you, is what they can spend it on, which means they don't lose it anyway.

My question is more based on the fact that this inflation eating savings away could be a short term measure, over their saving lifetime, rather than then simply losing all their savings. So I'm asking you for a real, decent spending strategy....as savers wouldn't just go out and spend based on your over simplified black and white anecdote.

I very much doubt you have one, and that line was all you had

globalds

Graham_Devon wrote: »

But the saver isn't getting nothing are they. They are getting an interest rate, allbeit it, currently lower than inflation.

You stated, in no uncertain terms that they either spend it, or lose it eventually.

What I'm asking you, is what they can spend it on, which means they don't lose it anyway.

My question is more based on the fact that this inflation eating savings away could be a short term measure, over their saving lifetime, rather than then simply losing all their savings. So I'm asking you for a real, decent spending strategy....as savers wouldn't just go out and spend based on your over simplified black and white anecdote.

I very much doubt you have one, and that line was all you had

Till the bubble bursts

Graham_Devon

globalds wrote: »

That's nice, but aint gonna help the economy

globalds

Graham_Devon wrote: »

That's nice, but aint gonna help the economy

People don't invest or buy to help the economy.

They do it for self interest.

That is what Hamish doesn't get ..No matter how rational his spend theory is ...It still isn't rational , nor ever will be to an individual.

I spend 90% of my wealth to get the economy rolling...Even if it does work. ....The end result is that I am still poorer.

PhylPho

Great how the BoE's brilliance continues to shine -- just as it did when watching a financial hurricane and housing bubble develop but failing to recognise either.

So now it would like savers such as I to spend, spend, spend -- presumably, all the massive interest I and others have received over the past couple of years?


The BoE's present policy benefits the borrowers of this country, not the savers, and the BoE's talk now of "eating into savings" is deranged: my savings have already been into by dint of the fact that the income stream I once had from interest is now having to be substantially replaced by capital taken as income.

I can see the way Britain's great big borrowing spree has "eaten" into the hard-earned savings of so many. But the great illustrious brains behind The Bank of England cannot.

Well, no surprise there, then.

System

Graham_Devon wrote: »

But the saver isn't getting nothing are they. They are getting an interest rate, allbeit it, currently lower than inflation.

You stated, in no uncertain terms that they either spend it, or lose it eventually.

What I'm asking you, is what they can spend it on, which means they don't lose it anyway.

My question is more based on the fact that this inflation eating savings away could be a short term measure, over their saving lifetime, rather than then simply losing all their savings. So I'm asking you for a real, decent spending strategy....as savers wouldn't just go out and spend based on your over simplified black and white anecdote.

I very much doubt you have one, and that line was all you had

"But the saver isn't getting nothing are they. They are getting an interest rate, allbeit it, currently lower than inflation. "

Is that not worse than nothing?

I see what's happening, you create a definition whereby anything I could possibly spend my money on becomes worthless over a non-specified period of time, and then decide it's the same as "nothing".

Fact of the matter is, the value of peoples savings is being wittled away. How long people are prepared to watch that happen before deciding to spend it on anything they choose be it a luxury item or an alternative investment is entirely up to them.

The BoE are making it pretty clear that they are going to continue to screw them over one way or another.

System

PhylPho wrote: »

Great how the BoE's brilliance continues to shine -- just as it did when watching a financial hurricane and housing bubble develop but failing to recognise either.

<snip for readability>

Well, no surprise there, then.

So, as a saver, what do you intend to do? Keep saving? Invest it in something else inflation-proof? Spunk the lot on a Ferrari?