Move over, Rowan Atkinson, the B of E has a clown that puts your routine to shame….AND.. he’s got your name.
Charles Bean, deputy-governor of the Bank of England thinks pensioners should shut up about interest rates and just spend their retirement capital.
“Older households could afford to suffer because they had benefited from previous property price rises,” he said.
Yep. Your house value is higher than it was ten years, so why on earth do you need any interest for lending us your money?
Keen thinking yet again from the bandit class that sold Britain’s gold at the bottom of a 20 year bear and then hocked it into debt bondage to the banking mafia.
Let’s see. Even if house prices have fallen 25-35% from their peaks, property taxes haven’t fallen with them, have they? And consumer prices haven’t gone back to where they were when pensioners were working, have they? In fact, in terms of gold price, savings are now worth about a fifth or sixth of what they were just ten years ago.
The typical UK savings rate has fallen nearly 3%, for a loss of 18 billion pounds a year, but that doesn’t matter says genius Bean, because housing values have gone up.
Bean:
“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.”
He added: “Very often older households have actually benefited from the fact that they’ve seen capital gains on their houses.”
Of course, what this financial huckster isn’t saying is that older people still have to pay upkeep and maintenance costs (that have risen), still have to pay inflated property taxes (which don’t match the deflation in prices), and now also have to deal with higher food and other consumer prices, higher medical costs, higher gas prices, and higher travel costs from their eroded savings.
And there’s no easy out from all this. They can’t sell their houses and downsize easily, because the housing market is in shambles and bank credit is tight. Even if they do sell, they have to deal with the transaction costs and taxes involved for the house they’re selling and commissions and purchase costs for the one they’re buying.
Meanwhile, if pensioners do cut into their savings, their future income stream is going to be in trouble.
And what do they do if there’s an emergency?