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Tuesday, 28 September 2010

Money For Nothing


What is the free press there for? To challenge, to illuminate, to educate, all three? If so, please will someone tell the Daily Mail. In the Science and Tech section of today's paper is this headline: "Astronomers spot "potentially hazardous" asteroid just one month before it is due to pass close to Earth"

Suffice to say that the poor maligned asteroid is no where near us; "potentially hazardous" seems to mean before the universe ends. Even if the Mail is way off in terms of scientific accuracy, it's spot on scaring the shite out of its gullible readers. Read their money page and it's full of people complaining that this nice man in Nigeria promised to send them a billion pounds of stolen government funds if only they'd hand over their bank details.

 Besides the sheer nonsense of the Mail paying anyone for this story; I just get so upset that a paper that causes Ministers to shit in their pants has so little respect for people's intelligence that they can print such a story.

Many of The Mail's readers are like me, retired. Many of us have a valuable home - thanks to the past property booms and have some savings which, until recently, provided, or supplemented, a pension. It is therefore not surprising that the Daily Telegraph's report of comments by the Bank of England's  Charles Bean that savers should stop moaning and start spending has attracted over 800, mostly critical, comments. 

Many point out that it was the loose monetary policies of the past that got us into our present position. So to tell the consumer to carry on spending  was seen by many as encouraging a drug addict to keep injecting.

It's confusing: not that long ago we were told that we weren't saving enough and that the problem was that the Far Eastern economies were saving too much and lending it to us in the West at too low rates. We spent, got indebted and bang - we were on the edge of financial melt down. Now we're being told something different. 

Well then was then and now is now. Circumstances change and so you change your analysis. Now the economy needs inflating -  if the banks aren't lending the savers should be spending.


What Mr Bean - suitable name or what? -went onto say was "Very often older households have actually benefited from the fact that they've seen capital gains on their houses." I'm afraid that rather too defensive Mr Bean. I'm sure the moment you said that you regretted it. Having a home worth £500,000 is of little use if you can't sell it. So you've made £400,000 capital gain in the 40 years you've owned it; but unless you can liquidate that asset it doesn't help meeting day to day living expenses.

One solution is to take out a loan on your property, which gives you a lump sum to live on. You won't pay interest on that loan during your life time; it'll be accrued and charged against the sale value of your house when you die. Which is a bit of an irony since much of the damaging credit growth that did for us was based on equity withdrawal. But different circumstances...

Finally, I don't know how I feel about the Labour Party leadership election. Other than why, oh why did Ed the Red have to bring up his family's history: Jews fleeing persecution? What was the point?

2 comments:

Selina Kingston said...

I was so keen for Ed to win and now....I'm not so sure. He doesn't look or sound like a future prime minister !

Barry Coidan said...

Give him 5 years - he'll be out of short trousers by then.