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

shortchanged_2

HAMISH_MCTAVISH wrote: »

Spending is necessary for economic recovery. The surest way to an economic death spiral is to turn into a nation of hoarders.

]

Well lets hope all these top company execs and bankers spend their big fat bonuses to get the economy moving as I don't have a lot of cash to spend, spend, spend.

Neither will thousands of other people who are facing redundancy, tax rises and pay freezes.

PhylPho

Joeskeppi wrote: »

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?

First thing we intend to do is maintain our perennial lack of faith in the Bank of England, an institution which the prudent of this country -- and there are many -- continue to appreciate like Custer appreciated the arrival of more Indians.

Next thing is to do what so many fortunate baby-boomers like us are doing: keep enjoying retirement by heading off to the sun every winter. (No, the spend-spend-spend doesn't go to Ryanair and its Irish bank account, but it could as well do: nothing we'll be spending in the next few months will go into the UK economy.)

Of course, in strictly financial terms, it now makes excellent sense for us not to keep paying our £1,420 Council Tax every year but to run our savings down to £15,999.

I can't off the top of my head work out what an annual return of £1,420 (and rising) is on £15,999 invested. But it must be more than 2.8%???

I think we'll look into this -- surely, valid grounds for Council Tax Benefit exist if people everywhere can write on the application form that they've "eaten into their savings" because the Bank of England told 'em to do so?

brit1234

Joeskeppi wrote: »

Problem for savers is they are losing money by hoarding it due to inflation.

They either spend it or lose it for nothing eventually.

Inflation may be rissing but certain items are deflating such as house prices. So even with inflation above interest rates your housing deposit is appreciating far more.

PhylPho

amcluesent wrote: »

. . . How it ends.

Many thanks for that link: stupidly, I hadn't initially realised that it was a link. Perhaps even more stupidly, I've never heard of that website before. Haven't time tonight to even begin reading its contents but will certainly do so tomorrow. Again, many thanks, amcluescent.

pardal51

Instead of bailing out loads of banks and pumping cash into the banks, the governement could have written cheques to tax payers to spend and thus helping the economy.

These guys don't care. They are rich. No matter what happens they still live a luxury live with confort. We working people suffer the anxiety of losing a job, etc. They will never get screwed or will be worried when they retire.

WHy don't these fat-cats reduce their salaries and live a more humble life???

Easy to say spend when you don't need to worry about anything.

Sibley

He said the magic words for me. Low interest rates for the next decade. I don't really care about house prices going up or down a few per cent anymore.

Orpheo

Sibley wrote: »

He said the magic words for me. Low interest rates for the next decade. I don't really care about house prices going up or down a few per cent anymore.

Does that mean you're leaving?

Great.

Taxi's waiting.

Arcaine

If loose lending (credit creation) and excessive spending (Government and Individual) has caused the problem we are in at the moment how can the answer to do more of it? I agree the paradox of thrift means that for each £ saved then this is £1 going into the banks and not into the economy to help demand, however at some point todays savings becomes tommorows capital and demand. At what point do we stop spending now, do we keep spending money we don't have and just keep blowing the debt bubble bigger until the whole house of cards collapses or can these problems really be postponed indefinately by borrowing and spending.

chewmylegoff

graham_devon wrote: »

they still have their eggnest.

......!!!!!!?

ILW

Arcaine wrote: »

If loose lending (credit creation) and excessive spending (Government and Individual) has caused the problem we are in at the moment how can the answer to do more of it? I agree the paradox of thrift means that for each £ saved then this is £1 going into the banks and not into the economy to help demand, however at some point todays savings becomes tommorows capital and demand. At what point do we stop spending now, do we keep spending money we don't have and just keep blowing the debt bubble bigger until the whole house of cards collapses or can these problems really be postponed indefinately by borrowing and spending.

Does seem a bit odd that an organisation like the BoE are either unwilling or incapable of thinking further than 6 months to a year ahead.