Qu'ils mangent de la brioche

There's a certain Mr Bean at the Bank of England who reputedly made a statement concerning savers who should "Stop moaning and start spending". Actually, he said

"Savers shouldn't necessarily expect to be able to live just off their income in times when interest rates are low. It may make sense for them to eat into their capital a bit."

Okay, no issue with that, that's what savings are for; a cushion against adversity and infirmity. Pensions are no bloody use after that @#!!!? @#$%$# #@@#$$$# $%#$%#$#%!! snotgobbler Brown had finished with them, having pissed the UK's hard earned up the wall. So yes, you need savings. However, said rates savers lend the banks should reflect something close to the rate of inflation, or you might as well stuff your wages in a mattress or convert it into something more solid. However, one should not trust the banks with one's savings in this format, because sooner or later, some politician or their placemen (Like Bean) will decide to do an FDR on people guilty of 'hoarding' precious metals and given fiat currency for your 'Nationalised' property.

Further on in the article we learn that UK Interest rates are being kept artificially low as a deliberate policy designed to 'persuade' savers to spend. Now hold hard a cotton picking minute there Mr Bean. You're telling us that because banks aren't lending, savers have to withdraw their liquidity and spend to create demand, so that banks can lend to businesses? Right. Ooookay. Here's a thought; if savers withdraw too much money from a bank (Called a 'run on a bank') because they aren't getting enough bang for their buck from the bankers, the banks will lose liquidity and still won't be able to invest in businesses. In the meantime, those banks that are lending are benefiting from a bigger than usual disparity in interest rates between saver and creditor. They can't lose, and in doing so, perpetuate the problem because their lending rates are too high. For Mr Bean to make such a comment looks like one of those "Let them eat cake" moments. Even if Rousseau made up the original quotation, which appeared for the first time in this work.

What needs to happen is for the banks to cut their lending rate a little, let the savers have a little better return on their investment, and maybe the current situation will ease. From what I can see, only the Banks and their friends in Politics are making money. How come Blair is so bloody rich? He didn't make that on a public salary. Heaven forfend that they should watch their hard earned slowly haemorrhage away like the rest of us. It wasn't the savers who gave money away to people who couldn't pay it back because it was 'fair'. It wasn't the savers who gambled with derivatives based on poor credit risks and needed taxpayer dollar to stop them going broke like any normal business. The Banks did it because their friends in politics used them to buy votes. Funny how quickly the Banks 'paid back' all the bailout money isn't it?

If I sound bitter, I am. We were brought to this point by bone brained political meddling with credit and investment. The politicians tried to buy the votes of the less credit worthy by forcing the banks to lend to poor risks on the basis of 'fairness' (To whom?). Pension funds were raided for the Politicians to give away, all for the sake of 'fairness'. The Banks and investment houses colluded with this practice as they were making a handsome profit. Until the inevitable bursting of the bubble, when the Bankers threatened to cut the politicians personal money supply. Not as in the Loan Shark "Give us it or we'll break yer legs." But more a; "Well you have shares in us, and if we go bust, you sink as well. How is little Tarquin doing at Winchester by the way?" fashion. Now the politicians and banks want small savers to bail them out of the mess the powers that be created by spending their resources while those guilty of creating the whole mess carry on exactly as before. Let them eat cake indeed.