Prudent savers being punished - reply from governor boe office

Thrugelmir

bigadaj wrote: »

But you seem to end up with a self perpetuating process of perverse incentives. We can't raise interest rates because the economy is too weak (it was because the pound was too strong but that excuse went after Brexit).

Like Japan we could end up in secular stagnation. Despite all the attempts to stop falling into the same trap.

Thrugelmir

HUMBUG wrote: »

Okay , you seem to know it all . Why don't you provide us with how much has been lent to the banks vs how much they have loaned out to businesses?

All here on the Bank of England website.

http://www.bankofengland.co.uk/publications/Pages/default.aspx

HUMBUG

eskbanker wrote: »

^ This. What were you hoping to achieve?

Make them think twice about the long term impact of their policy decisions. Mark Carney will be long gone before we see the true impact of the damage he and his team will have caused. Just like when he jumped ship in Canada before the **** hit the fan with regards their 'burst bubble' housing crisis . He used the same low/zero interest rate business model to create that bubble and when it burst there was a big increase in mortgage rates (while lending cooled off).

HUMBUG

Thrugelmir wrote: »

All here on the Bank of England website.

http://www.bankofengland.co.uk/publications/Pages/default.aspx

But you obviously know so why don't you just provide me with 2 figures?

jimjames

HUMBUG wrote: »

How would you feel if you were 70+ seeing all your savings going down the drain because of rigged low interest rates + high inflation?

I invest and don't expect that to change so I won't be in that situation. If you'd switched to investments in 2008/9 then you'd be sitting on a very tidy capital profit, have had a substantial income and not be complaining at all. Far too many people either don't save or keep all their money in cash because they either don't understand risks or don't want to look at investment options.

HUMBUG

jimjames wrote: »

I invest and don't expect that to change so I won't be in that situation. If you'd switched to investments in 2008/9 then you'd be sitting on a very tidy capital profit, have had a substantial income and not be complaining at all. Far too many people either don't save or keep all their money in cash because they either don't understand risks or don't want to look at investment options.

I am not 70+ , I have investments and I don't need money. I have raised this issue on behalf of vulnerable people (like my parents) who live off the interest on their savings. When you say they 'don't understand risks' what exactly are you saying? My parents understand the risks oh too well when they lost £13k overnight when their Halifax shares crashed.

JohnRo

HUMBUG wrote: »

My parents understand the risks oh too well when they lost £13k overnight when their Halifax shares crashed.

This implies, quite clearly, that they absolutely do not understand the risks, unless they're astronomically wealthy.

eskbanker

HUMBUG wrote: »

Make them think twice about the long term impact of their policy decisions.

And you feel that cutting and pasting emotive and naive claptrap from a Daily Mail-sponsored single-issue pressure group will achieve this?

Bless.

bowlhead99

HUMBUG wrote:

Thrugelmir wrote: »

HUMBUG wrote:

Okay , you seem to know it all . Why don't you provide us with how much has been lent to the banks vs how much they have loaned out to businesses?

All here on the Bank of England website.
http://www.bankofengland.co.uk/publications/Pages/default.aspx

But you obviously know so why don't you just provide me with 2 figures?

You are the one who's saying you're "guessing they have stashed it away but please feel free to correct me with the accurate figures". Why don't you read the reports on the website? You can get a spreadsheet showing a lot more than 2 figures (2 figures alone would be meaningless without context).

From the FAQ at
http://www.bankofengland.co.uk/markets/Documents/flsfaqs.pdf

A. Data
1. Where can I find the latest FLS usage and lending data?
These data can be found on the Bank’s website here
www.bankofengland.co.uk/markets/Pages/FLS/extensiondata.aspx

2. Where can I find data relating to the first part of the FLS?
These data can be found here
www.bankofengland.co.uk/markets/Pages/FLS/data.aspx

3. How do I find the more detailed spreadsheets with data in? Can I see, for example, quarterly splits of drawdowns and lending?
Scroll to the bottom of the webpage table at the links above and click on the orange link highlighted in the footnote. Note that detailed data are available for both the first part of the FLS, and for the FLS Extension.

HUMBUG wrote: »

eskbanker wrote:

What were you hoping to achieve?

Make them think twice about the long term impact of their policy decisions.

Ah, that's a great idea. They probably weren't thinking about the long term impact of their policy decisions until you suggested that they should.

Keep it up kid, you're doing God's work right there.

HUMBUG wrote: »

When you say they 'don't understand risks' what exactly are you saying?

Many people think that saving substantial amounts of cash in a bank account which is likely to pay them less than inflation in the long term is a good way to generate an income or grow their wealth, and so they are disappointed when interest rates fall and it becomes obvious that it is not a good way to generate most of your income or wealth after all.

Fortunately, a majority of people have a route to provide them with wealth in the long term and through retirement, in the form of employer or personal pensions, using equities-based and bond-based investment funds, so our country's growth situation is not so bleak as if everyone thought they should put their cash in low-return capital-guaranteed deposit accounts.

My parents understand the risks oh too well when they lost £13k overnight when their Halifax shares crashed.

Well, OK, we weren't particularly talking about your parents investments, but as they understand the risks of share based investment it would not be much of a problem for them to have lost the £13k of share value ; they should have been able to just shrug it off. They would be well aware that losing most or all of their money was something that could quite possibly happen when they decided that being an owner of a banking group was something they wanted to be, and held on to those shares. They were happy to take that risk of being an investor in that individual company.

Most of us don't feel qualified to evaluate banking and mortgage lenders' business models so don't invest in individual banking groups like your parents did. Those people who do feel they are experts in making investments in listed financial services groups, (like your parents?) or are just greedy and focus on potential profits without looking into the potential losses (like your parents?), might choose to own shares in specific banks rather than use broad-based investment funds. But most steer clear of directly owning banking shares because banking businesses are complex.

steampowered

HUMBUG wrote: »

So I guess you know how much have been loaned to the banks and how much of it has been lent to businesses? I am guessing they have stashed it away but please feel free to correct me with the accurate figures.

"Stashed away"?

Perhaps the money is hidden in bankers' mattresses? In a Canary Wharf basement perhaps?