Reply to: Savers lose out on £44.5bn as Bank Rate stays at 0.5pc

[AtW]

Was that taught in your GNVQ too?

Nope - in Soviet school equivalent was after 8 years in school after which the unfortunate person would have to learn some practical skills on using some outdated hardware captured in Germany in the 40s, luckily for me I had good grades so I moved over to the next level: graduation with distionction (silver medal).

HTH

[Freamon]

I've tried to be short in my response, for your benefit I'll expand on my original thinking:

Not sure I can compete with that level of intellect. Was that taught in your GNVQ too?

[AtW]

Erm, actually I made the distinction between saving and investment several posts ago, to which your only response was:

I've tried to be short in my response, for your benefit I'll expand on my original thinking:

[Freamon]

Saving is not the same as investment.

Very few people from abroad save their money in UK, even though some of the most richest of them invest into UK football clubs, overpriced mansions etc.

Think about a building society - it was meant to be funded by local people using their savings, can it be in the spirit of that mandate to raise lots of money on international markets using some tulipy rating agency high rate as excuse to raise money?

Saving money isn't the same as investing money - I guess this vital distionction wasn't taught in your Oxbridge school?

Erm, actually I made the distinction between saving and investment several posts ago, to which your only response was:

[AtW]

Savings can come from anywhere in the world.

Saving is not the same as investment.

Very few people from abroad save their money in UK, even though some of the most richest of them invest into UK football clubs, overpriced mansions etc.

Think about a building society - it was meant to be funded by local people using their savings, can it be in the spirit of that mandate to raise lots of money on international markets using some tulipy rating agency high rate as excuse to raise money?

Saving money isn't the same as investing money - I guess this vital distionction wasn't taught in your Oxbridge school?

[Freamon]

Oh yes there is!

The whole point is that distinction - savings come from local people or companies, debt can be raised from international markets. This is the root of the problem - some tulipy building society in the middle of nowhere suddenly can think of itself as a global player where as in the first place their mission was to invest locally using local resources.

If that was enforced through regulation then savings would be encouraged and debt would be the last resort.

Savings can come from anywhere in the world.

What you describe as debt is quite often investments bought by pension funds using money that people have saved into their pensions.

It really is all the same thing.

You can say that the types of investments sold by banks should have been better regulated, but that's a different issue.

[AtW]

Did they not teach you this in your finance BTEC or GNVQ or whatever qualification you did?

My two degrees come from an ex-Soviet Uni and a UK ex-Poly.

HTH

[AtW]

For the purposes of this discussion there is no distinction

Oh yes there is!

The whole point is that distinction - savings come from local people or companies, debt can be raised from international markets. This is the root of the problem - some tulipy building society in the middle of nowhere suddenly can think of itself as a global player where as in the first place their mission was to invest locally using local resources.

If that was enforced through regulation then savings would be encouraged and debt would be the last resort.

[Freamon]

I actually do understand, it is you who confuses savings with debt that some unnamed banks loaded themselves up using foreign markets.

If a bank receives someone's savings into a savings account then this is a debt the bank owes to the saver.

If a bank receives someone's savings (from abroad possibly) by virtue of selling them an RMBS or other bond, this is a debt the bank owes to the saver.

For the purposes of this discussion there is no distinction, a bank still cannot lend out more than it has received in savings (either into savings accounts or by selling bonds of any kind).

Did they not teach you this in your finance BTEC or GNVQ or whatever qualification you did?

[gingerjedi]

Now that you've mentioned it - NO!

If things get so bad that I cant feed and house my family what do you think your money will be worth?

[AtW]

Yes, but clearly you don't understand

I actually do understand, it is you who confuses savings with debt that some unnamed banks loaded themselves up using foreign markets.

[Freamon]

Do you know the difference between "savings" in bank balance and "loaned" money?

Yes, but clearly you don't understand, so I'll have to explain in very simple terms.

Person A deposits £100 in savings in Bank X.
Bank X can now lend Person B £90 and has to keep the remaining £10 in reserve.

Person B goes to a shop and spends the £90, shopkeeper deposits the £90 in Bank Y.
Bank Y can now lend Person C £81 and has to keep the remaining £9 in reserve.

And so on.

At no stage is any bank able to lend out any more than it has received in savings..

Simple enough for you?

[AtW]

You have cash in a bank account and you can sleep at night?

Now that you've mentioned it - NO!

[gingerjedi]

You have no cash in your bank account yet you can sleep well at night?

You have cash in a bank account and you can sleep at night?

[AtW]

Ignorance is bliss, in your case.

Do you know the difference between "savings" in bank balance and "loaned" money?