Reply to: BoE impoverishing pensioners, pushing up inflation damaging consumer spending

[Robinho]

You can blame GVT's all you want, but greed and nothing else has put us here IMO.

No, a flawed financial system where banks can create money has put us here. If banks couldn't create money then they would have to limit the amount of loans they gave out, and as such, they would be incentivised to give out good loans which the economy can sustain.

[Scoobos]

You must spread some Reputation around before giving it to Doggy Styles again.

Totally...

Also.

I'm annoyed as I've seen my friends spend 200,000 on houses when they earn 25k a year , ring up credit card bills on balance transfers (in 1 case to 14,000) and then people like me have to pay to bail out irresponsibility.

You can blame GVT's all you want, but greed and nothing else has put us here IMO.

[Doggy Styles]

Is it the person who took the loan's fault? Or is it the bank's fault for giving them that loan? Or is it the government's fault for allowing banks to be able to create money whenever they lend, giving them almost zero incentive not to give a loan?

I wonder.

Always blaming someone else is a national past-time in Britain.

The only thing I think is wrong is if you play to one set of rules for most of your life (e.g. you work and save to support yourself when you can't work any more), then the rules change when it's too late to do anything about it (e.g. HMG decides to take your savings away).

[Robinho]

Thats not the pensioners fault, its the parents borrowing more than they could afford that has caused the financial problems. Some might argue that banks offered to loan such silly amounts, but I tend to blame the person who uses the drugs not those that sell them.

Is it the person who took the loan's fault? Or is it the bank's fault for giving them that loan? Or is it the government's fault for allowing banks to be able to create money whenever they lend, giving them almost zero incentive not to give a loan?

I wonder.

[doodab]

Thats not the pensioners fault, its the parents borrowing more than they could afford that has caused the financial problems. Some might argue that banks offered to loan such silly amounts, but I tend to blame the person who uses the drugs not those that sell them.

The trouble is that once the "borrow too much money" strategy becomes available to the general population it only takes a small proportion to go with it before not choosing it becomes highly disadvantageous and people are required to adopt it to compete with others. The choice isn't "borrow too much" or "borrow a bit less" it's "borrow enough to stay in the market" or "quit your job and move away somewhere cheaper with poorer employment prospects".

As is often the case in these matters what starts out as a desirable option for some becomes the only option for many.

[escapeUK]

+1

Most young people cannot even begin to think about buying a home.

Thats not the pensioners fault, its the parents borrowing more than they could afford that has caused the financial problems. Some might argue that banks offered to loan such silly amounts, but I tend to blame the person who uses the drugs not those that sell them.

[Lockhouse]

The current crop of pensioners are OK-ish. It's us lot - the 30's to 50's - that are going to retire with not much apart from the cash we have in our properties.

[Doggy Styles]

Ah.

The Logan's Run option.

We could do the floaty thing with wires.

[centurian]

Mmmm - and I was sure that a QE news item would be sufficient to bring AtW out of his hiding place.

[DimPrawn]

Young people are the future.

They should be the priority in this mess.

[Doggy Styles]

The vast majority are far wealthier than the younger generation who are in massive debt.

The young generation have hardly started. It takes a long time and a lot of work to become wealthy.

Are you suggesting we should take away from those who have provided for themselves and can no longer work, to subsidise those who have the advantage of youth to do it for themselves?

[DimPrawn]

+1

Most young people cannot even begin to think about buying a home.

Pensioners seem to range from seriously wealthy to having a modest amount of money. Young people seem to range from having close to nothing to huge personal debt (inc enormous mortgage debt on a tiny box).

[BrilloPad]

The vast majority are far wealthier than the younger generation who are in massive debt.

+1

Most young people cannot even begin to think about buying a home.

[DimPrawn]

How many pensioners do you believe are wealthy?

It's not that many, because as you must know, most people retire with meagre funds for their retirement, and at their age little chance to suppliment it.

On the other hand, the younger generation have many more earning years in front of them to address financial shocks.

The vast majority are far wealthier than the younger generation who are in massive debt.

[Robinho]

It's all a big horrible mess unfortunately.

To stop it happening in he future we need a nice fixed money supply, full reserve banking and privatised pensions.