Savings ... something of the past?

lippy1923

No we are not the same person. I am a homeowner of a semi detached house, not a renter of a bungalow. I am only 26 so bungalows are defiantly not on my list of homes yet :rotfl:

I can still manage with stairs

cells

savings are not something of the past, expecting a positive return for doing nowt probably is

wotsthat

Lily-Rose wrote: »

We pay our own rent in full by the way, and don't have any benefits whatsoever. Also, we live in a H.A. bungalow that is owned by a non profit organisation so it is not subsided in any way.:

If you are with the Wales and West HA then you most definitely are being subbed by the taxpayer - https://issuu.com/wwhpublicrelations/docs/wwh_annual_report_2014

All HA's are non-profit by the way.

I just wish you'd said thank you for the sub instead of biting the hand that feeds you. Rude.

mwpt

cells wrote: »

savings are not something of the past, expecting a positive return for doing nowt probably is

You're not doing nowt, you are labouring and producing to earn that money. That money comes at a price, or it used to. You then lend the money to a bank with the understanding that they may lend it out or engage in other regulated activities, for profit, and you expect a yield in return.

But at some point, governments via their puppet central banks, decided money shouldn't be so hard to come by through expecting people to actually labour and produce, so they started having the central banks offer to create money on the cheap via QE, FLS and so forth, and give this to the private banks.

So, savers have to accept a lower yield on their savings because of central bank activities, or just chase the easy money to be made by following the resulting asset bubbles.

And we wonder why productivity is down.

cells

mwpt wrote: »

You're not doing nowt, you are labouring and producing to earn that money. That money comes at a price, or it used to. You then lend the money to a bank with the understanding that they may lend it out or engage in other regulated activities, for profit, and you expect a yield in return.

But at some point, governments via their puppet central banks, decided money shouldn't be so hard to come by through expecting people to actually labour and produce, so they started having the central banks offer to create money on the cheap via QE, FLS and so forth, and give this to the private banks.

So, savers have to accept a lower yield on their savings because of central bank activities, or just chase the easy money to be made by following the resulting asset bubbles.

And we wonder why productivity is down.

you miss the point

you can save to consume in the future.

but you can not expect a positive real return on those savings in the long run.

It is just simple mathematics. Even at 1% real return each year, a single dollar exceeds the worlds GDP in a fairly short timeframe

So lend and apple get an apple back. Not lend an apple and get the world back

cash deposit savers need to accept that the future for cash savings is 0% real returns and likely a small negative number.

mwpt

cells wrote: »

you miss the point

you can save to consume in the future.

but you can not expect a positive real return on those savings in the long run.

It is just simple mathematics. Even at 1% real return each year, a single dollar exceeds the worlds GDP in a fairly short timeframe

So lend and apple get an apple back. Not lend an apple and get the world back

cash deposit savers need to accept that the future for cash savings is 0% real returns and likely a small negative number.

I like your confidence in your theory. I accept the general long term principle but dispute that you can summarise and conclude the entire short term economy in a paragraph. You are omitting too much.

cells

mwpt wrote: »

I like your confidence in your theory. I accept the general long term principle but dispute that you can summarise and conclude the entire short term economy in a paragraph. You are omitting too much.

It wasn't a statement about the short term economy it was a statement about the returns you should expect in the mid to long run in cash savings or their equivalents eg government paper.

CLAPTON

cells wrote: »

you miss the point

you can save to consume in the future.

but you can not expect a positive real return on those savings in the long run.

It is just simple mathematics. Even at 1% real return each year, a single dollar exceeds the worlds GDP in a fairly short timeframe

So lend and apple get an apple back. Not lend an apple and get the world back

cash deposit savers need to accept that the future for cash savings is 0% real returns and likely a small negative number.

it would seem to me that a single dollar, growing at 1% per annum will be worth about 2.7 dollars in a 100 years

one would assume that the world will easily match that in terms of real growth in 100 years

mwpt

cells wrote: »

It wasn't a statement about the short term economy it was a statement about the returns you should expect in the mid to long run in cash savings or their equivalents eg government paper.

So my turn, you are missing the point. In a pure mathematical sense, you are correct that it is a zero sum game and we can't expect everyone to have positive real returns. But pure mathematics works on infinite series and so forth. The short term could be the next 100 or 200 years, or however long it takes. I don't think you can take your theory and apply it as gospel for any amount of time within our lives.

cells

CLAPTON wrote: »

it would seem to me that a single dollar, growing at 1% per annum will be worth about 2.7 dollars in a 100 years

one would assume that the world will easily match that in terms of real growth in 100 years

Well a dollar at 1% a year real return becomes worth an order of magnitude more than the entire worlds GDP in just 3500 years. Now 3500 years night sounds a long time but some trees are older and in sure we would both hope the human racebhas a lot more than 3500 years on this rock