Protect against UKGOV savings confiscation

innovate

bigadaj wrote: »

I'm still unsure of their government pension liabilities though these must be huge and growing with an ageing population and whilst they are better placed than the uk in general terms this could be a real problem ina. Couple of decades.

I would think their liabilities are a lot higher than the UK ones, simply because they have more people to pay to, and their state pensions are, if I understand correctly, a lot more generous than in the UK (1.5 - w times as much as UK state pensions). I don't believe the Germans substantially different in the age curve hitting the same levels as they are in the UK. Same sort of baby-boomer generation effect. Though they boomed perhaps a bit more in Germany than elsewhere? Doesn't seem to have affected the pensioners or the state in any negative way, nor does it seem to affect non-pensioners negatively.

Boring detail here if you have the time to digest: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-11-023/EN/KS-SF-11-023-EN.PDF

bigadaj

innovate wrote: »

I would think their liabilities are a lot higher than the UK ones, simply because they have more people to pay to, and their state pensions are, if I understand correctly, a lot more generous than in the UK (1.5 - w times as much as UK state pensions). I don't believe the Germans are any different in the age curve hitting the same levels as they are in the UK. Same sort of baby-boomer generation effect.

Yes, precisely, my u.nderstanding is that private pension provision is very low, and state pensions are far more generous than in the uk, I though it might well be significantly more than 150% in fact.

This could be the real test as whilst the Germans accept higher taxation to fund teh state, once the ratio of working people to pensioners drops then this will put huge pressure on their whole economic model.

lvader

innovate wrote: »

I was with you until that last paragraph.

What is it that has been haunting Germany for the last 50 years, in which they grew to the economic powerhouse of Europe, with one of the lowest debt as % of GDP of any developed western nation ( and certainly less than the UK's, even though UK could print their own money and Germany couldn't ever since they became part of the Euro)?

Germany has no NHS but people don't suffer from bad medical support because they, in the main, all pay into insurances, sort of equivalent to NI contributions and/or private health insurance that provide at least the same sort of standard health care as the NHS does. Germany has a benefit system that leaves nobody starving or dying (though if I understand correctly, they won't pay benefits to anybody for more than 12 months). Germany state pensions are way more generous than UK ones. Germany has seemingly coped miles better with immigration than the UK. Just check out how many Syrians Germany (and other countries) took in recently, compared with the UK.

Germany is more paranoid about inflation than most countries, some of the disagreements Germany had with the ECB around monetary policy was with this in mind.

jabba42

guitarman001 wrote: »

Every awful thing I could imagine this government (and last) doing, it has. The worst thing being propping up the housing market via Help To Buy, using taxpayers' money to prop up a market some taxpayers can't afford to take part in themselves. Now this:

http://www.telegraph.co.uk/finance/financialcrisis/10548104/IMF-paper-warns-of-savings-tax-and-mass-write-offs-as-Wests-debt-hits-200-year-high.html

You can have whatever opinion you want on the matter, but my opinion is that this is going to happen; savers are always the ones hit hardest. So, how to protect from the government literally just taking some of your savings from you? There are two viable options in my head (I don't count gold as one):

1 - buy a property
2 - move to another country

(1) does not appeal due to the inflated market we're in and the quality of housing you get for fractions of a million pounds.

(2) may seem a bit extreme, but I've been talking about it for ages. Move abroad, maybe go somewhere with better weather and job options, and convert all or a large part of your savings to the new currency.

Oops, of course a third option is to just stay here and convert some of your currency, but I don't have that rosy a picture of the UK in the near future so I'm still veering toward number 2. I'd say 7 out of 10 of my closest friends left within the last 4 years and they seem to be having a blast with a better lifestyle than they could afford here. All educated and in professional engineering/finance/medical jobs. I think it's time for me to sit down and look at this more seriously now - no joke.

Interested to hear your opinions on the story and solutions.

This imf paper is in general looking at the eurozone, so moving into the eu is probably giving you a bigger chance of getting a haircut. I had assets in cyprus so I know what it is like, no access to your cash, a horrible feeling. The best thing is outside the eu altogether, Dubai, Singapore, Hong Kong if you are worried.

If they do it, just wait for the denials from all the politicians and then you know it is time to move your money. I still think we need a catalyst for them to implement this in the form of a bank failure or sovereign crisis. We are in the calm before the storm now, things are looking better but the debt is still there http://www.eudebtclock.org

innovate

bigadaj wrote: »

Yes, precisely, my u.nderstanding is that private pension provision is very low, and state pensions are far more generous than in the uk, I though it might well be significantly more than 150% in fact.

This could be the real test as whilst the Germans accept higher taxation to fund teh state, once the ratio of working people to pensioners drops then this will put huge pressure on their whole economic model.

You might be right, but my money is on German efficiency on this. They will know exactly what their liabilities are, and they wouldn't have bailed out half of Southern Europe to the tune of several billions if they were about to run out of money. They also not happily stay as a member of the EU with totally open EU borders if they were heading for a pensions disasters. My humble opinions only.

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

Scarpacci

innovate wrote: »

I would think their liabilities are a lot higher than the UK ones, simply because they have more people to pay to, and their state pensions are, if I understand correctly, a lot more generous than in the UK (1.5 - w times as much as UK state pensions). I don't believe the Germans substantially different in the age curve hitting the same levels as they are in the UK. Same sort of baby-boomer generation effect. Though they boomed perhaps a bit more in Germany than elsewhere? Doesn't seem to have affected the pensioners or the state in any negative way, nor does it seem to affect non-pensioners negatively.

Boring detail here if you have the time to digest: http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-11-023/EN/KS-SF-11-023-EN.PDF

To add to the detail, I do think Germany is in a worse place than the UK. How much of a problem that will pose I don't know, but the UK is bucking the trend of much of Europe.

These figures from the CIA World Factbook shed some light on the demographic differences between the UK & Germany. Population growth in Germany is -0.19%, while it's +0.55% here. The birth rate
in Germany is 8.37/1,000 people, compared to 12.26 here. The death rate is 11.17/1,000 people, compared to the UK's 9.33. The elderly dependency ratio is 31.1% in Germany and 26.9% here. Germany's dependency ratio overall, including youth and elderly dependency, is perhaps better than ours at 52% to our 54%, but of course ours is higher because of all the youths currently dependent on their parents (27.1% to Germany's 19.9%) who will be there to support the elderly in a few years. The median age in Germany is currently 45.7 to the UK's 40.3. Demographically Germany is certainly in a worse place than the UK, although their responsible fiscal attitudes may well make this less of an issue.

https://www.cia.gov/library/publications/the-world-factbook/geos/gm.html
https://www.cia.gov/library/publications/the-world-factbook/geos/uk.html

bigadaj

innovate wrote: »

You might be right, but my money is on German efficiency on this. They will know exactly what their liabilities are, and they wouldn't have bailed out half of Southern Europe to the tune of several billions if they were about to run out of money. They also not happily stay as a member of the EU with totally open EU borders if they were heading for a pensions disasters. My humble opinions only.

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

Maybe but a few billion is peanuts in this context, and what they have contributed hasn't got anywhere near solving the structural problems in the pigs.

I think this is the case where there will be a tipping point, similar to many countries, just look at France currently and the differenct econmic circumstance between older and younger people.

In terms of eu membership then they are the major donor and so can't be kicked out. They will also negotiate any amendments to be in their favour as they will actually have the economic moral high ground. It's still far more likely for the weaker nations to ditch the eu, and for example the Greeks to go back to teh drachma. They are still ina. Complete mess, look at Argentina in comparison they managed to default and be a credible nation agin in a far shorter time period.

The Germans could be ina difficult spot, they can't borrow excessively as that is not only against their nature but would be hypocritical when views against the Mediterranean countries. Increases in taxation will only go so far so a shrinking tax base will probably means cuts inspending, with massive complaints from the older generation, similar to the baby boomer generation in the uk as well as elsewhere, but to a far higher level. They feel they paid in over decades so if they don't get the payout things will get interesting.

Glen_Clark

People underestimated the resolve of politicians to keep the EEC together so they can stay on the gravy train. But they have only kicked the can down the road. The fundamental problems of the EEC are getting worse. Not as bad as Britain though. The Euro is still 33% higher against the pound than it was when the Euro was introduced.

innovate

I reckon the one major things that will continue to cause Germany a headache is that they are the only Euro country that is financially capable of bailing out any of the others, and the bailout requirements don't seem to be contained as yet.

Other than that, I can't see Germany anything but remaining the strongest country in Western Europe for a very long time to come. The UK would need decades to catch up on manufacturing and general SMEs, which Germany has been developing and growing since the 1960s. France, the only other major potential economic power in Europe, is sort of dead in the water because they can't decide whether they want to be a socialist/communist society or a western economy. Italy will continue to have a literally monthly government crisis for a few more decades after Berlusconi has finally vanished from the scene, Spain will need at least 20 years to get back on their feet, and the rest of the EU or non-EU countries will do between abysmal and ok but none of them is large enough to make any substantial difference in economic terms. Importantly, none of them, include the biggies, will be able to escape the global economic shifts, in which predominately China will become the world's most powerful and wealthy economy.

lvader

The higher Euro value is a handicap rather than a benefit, the pound is still around it's 30 year average against the USD so about where it should be.