Uk aaa?

Thrugelmir

tomterm8 wrote: »

This explains why Japan has been running along quite happily with 200% debt to gdp for the last decade, whereas eurozone countries are in crises with much smaller debts.

Unlike Europe including the UK. The Japanese had large levels of personal savings. So there has been money to buy Government debt. There wasn't such a reliance on international markets to provide funding.

lvader

Thrugelmir wrote: »

Unlike Europe including the UK. The Japanese had large levels of personal savings. So there has been money to buy Government debt. There wasn't such a reliance on international markets to provide funding.

Japan also has a very strong currency so can't inflate debt away.

ManAtHome

RenovationMan wrote: »

You're a bit out of date gen, people have been allowed to use Drawdown instead of buying annuities for a number of years and recently the rules on drawdown have been modified (or are about to be) to remove the upper age limit.

Meanwhile, in the real world... http://www.lovemoney.com/news/savings-investments-pensions/pensions/11409/five-crucial-pension-facts

From the article

the average size of the pension pot is just £25,000. I stress the word ‘average.’ Obviously, some pension pots are much smaller. According to Legal & General, 34% of pension pots are worth less than £10,000.

- good luck with the drawdown for the little peeps!

Same as with ZIRP+inflation - the people just about managing get the brown end of the stick whilst "merv the magnificent" (check out how the NICE decade was down to MPC, not "external factors") and his banksta/MP mates get to enhance their already platinum-plated pensions.

RenovationMan

ManAtHome wrote: »

Meanwhile, in the real world... http://www.lovemoney.com/news/savings-investments-pensions/pensions/11409/five-crucial-pension-facts

From the article
- good luck with the drawdown for the little peeps!

Same as with ZIRP+inflation - the people just about managing get the brown end of the stick whilst "merv the magnificent" (check out how the NICE decade was down to MPC, not "external factors") and his banksta/MP mates get to enhance their already platinum-plated pensions.

So you're saying I'm wrong and that all pensioners are forced to buy an annuity?

Generali

RenovationMan wrote: »

So you're saying I'm wrong and that all pensioners are forced to buy an annuity?

I might be out of date but AIUI, company pension schemes are still forced to buy bonds for retirees in defined benefit funds.

Vivatifosi will be along before too long no doubt to put us straight.

Financial repression can take many forms from fixed exchange rates through to confiscation of assets.

purch

Gilts have been bought to levels which are likely to be unsustainable in the longer term.

A sub 3 % yield across all maturities is unthinkable IMHO.

Gilts look expensive to me against Treasuries, Bunds, Equities and Current Inflation expectations.

A reverse looks on the cards in the near term, and any downgrade possibility will only accelerate the reverse.

sabretoothtigger

A reverse has been due for 3 or 4 years. There is a bias to countries which do QE, Euro seems to be suffering from lack of it at least in perception. It is quite funny that we are rated better then the Germans when they export so much and we do not.

I like that London may become a main dealer for Chinese currency, this could help reinforce this secondary reserve currency thing we have going for us.
Could it be we are Not too hot, not too cold just right, remember the goldilocks thing. That didnt work out for Brown, we got the 3 bears all right

Everyone who has lent money to the government has done so at a loss.

But relative to the money they are printing, its a profit due to rising bond prices. Something not right here


I think it was Argentina government not that long ago that mandated all pensions to buy their government bonds exclusively

John_T._Reed wrote:

In 2008, Argentina seized private pension funds because the government was having trouble raising the money it needed in the normal ways: taxing and borrowing.

Could it happen here?

No. It’s unconstitutional.

Last 12 words of the Fifth Amendment:

…nor shall private property be taken for public use without just compensation.

Can’t they get around that?

Sort of. What they do instead is financial repression.

That means they essentially outlaw all forms of savings other than putting your money into banks. For your safety.

Then they outlaw the banks putting their deposits anywhere but in U.S. government bonds. For your safety.

In the USA its already the case the biggest owner of government debt is the various welfare and pension schemes


With housing prices I think it was rental rates that showed how wrong buying was at that time. Im not sure what bonds have to be compared to show what will tip the scales. But at some point it will be much more profitable to not bother with them

worldtraveller

Fitch Ratings revised down its outlook on Britain's AAA rating to negative on Wednesday, warning the nation faced a greater than 1-in-2 chance of losing its top-notch status in the next couple of years if the government eases back on its debt-cutting measures.

Reuters

Neverland

Generali wrote: »

I've been banging on about this for ages and few people seem to believe me but the obvious (and possible only) way out of the problem is more financial repression. That is that you force people to buy bonds that may not want to do so.

This is already being done through the pensions system as you are forced to buy an annuity and your annuity provider is forced to invest in bonds. It would be possible to, for example, force banks to buy more bonds by increasing the reserve requirement (the owners of banks pay the price of this, that is to say the shareholders being you via your pension fund and nationalization). Anyone heard if banks are being required to increase reserves anywhere?

My guess is that the next step will be forcing people to invest a proportion of their pension into bonds.

The UK can simply print money to repay the debt. IIRC however, the debt agencies take financial repression through inflation into account when rating countries and ultimately of you systemically attempt to 'inflate away the debt' lenders will force you to borrow in USD or EUR.

For what its worth, I believe you

We aren't an AAA country either