Paul3446

Maybe it's because he's telling porkies again!

Basically, someone will ask to see proof of his winnings and then we'll spend about a week listening to him say he doesn't need to prove anything to us, blah blah blah.....

EddScott

11. Buy HBOS shares

pslewis

One is the Banking Code - NOT the Government.

The other is the Government - NOT a Bank.

Both different.

I agree that 8% is unusual, but I have won a couple of £100's each month, for months now and a £500 + £100 a while back.

pslewis

You said the same about the Currys claim - I owned you then and I own you now

By the way, did you have the ***** to apologise over your wild claims?? Thought not

j4ckos mate

if its is crashing no signs at work we are hammered

pslewis

Drunk on the job?

fast bloke

There is one way through this. Rock bottom interest rates to promote growth, and let inflation do what it wants. In the medium to long term, the economy itself will control inflation, as the 3 million unemployed people won't be able to borrow and spend, while those who will benefit most will be those who have large but manageable borrowing. The only people who will be worse off than the unemployed will be people with no debt and large liquid assets. High inflation will erode the large debts at the same rate that it will erode the liquid assets

Say I have 500k debt and you have 500k savings, with average salary of 25k. They both equate to 20 years average salary. With a 'real' inflation rate (not CPI or RPI or RPIX) of 10% (think petrol, oil, gas and beer) over 5 years, the average salary will be 41k. I will have paid a nominal amount of interest and you will have earned a nominal amount of interest, but my debt will now be 12 years average salary and you savings will be similar. In the unlikely event that the cycle continues for more than 5 years, after 10 years, the average salary will be 65k.... your savings will have gone in purchasing terms from 1.3 million to 500k, while my debt repayment terms will have gone from 500k to 150k. I hope you can understand this, but if you can't, it might be a good time to consider stopping giving financial advice based on what you read in the Daily Mail

Deep Singh

Pete95 should not be banned for his comments unless he is rude or offensive, and I've never known him to be either.

Its no point saying the Dow or the FTsE have had a bounce so all is well! Look at the volatilty, look at the lack of confidence in paper money and the banking system. This is unprecedented in the last 30 yrs, we are on the brink (and I say brink) of financial meltdown, we might pull back.

The recession is here. All the numbers of employment etc have a lag and so don't reflect what is happening NOW.

The fact that most here don't accept that the recession is here is not suprising, most people don't know whats going on until its too late.

shamrock

I wish I had your luck

lozgti

I just feel like there is no room for manoeuvre and I would say I am in a good financial position.I find that worrying

Those who are fairly debt ridden with cards/loans/car loans/remortgages must be a high proportion of this country and with banks now reigning it all in,what do they do and where do they turn?

Times are changing dramatically and rapidly.All it is is putting off what perhaps should have happened some years ago.Somehow they have kept a lid on it until now

And then there are those that choose not to see what is happening...

PaulC72

Well said that man.

Deep Singh

FB, I 've read about this before, ie Govts inflating their way out of debt problems. But you have assumed that wages will go up exactly in line with 'real inflation'. Isn't that a bit far fetched?

If what you're saying does come to pass whats the best advice for the guy with the £500k of savings?

If you are correct that what would be the best course of action

TopBanana

The people with savings are paying to reduce the size of others' debts. The only thing you can do is try to buy real assets that aren't part of the bubble, or gold which people flock to when they lose faith in their own currencies. Gold has just undergone a serious correction so might be a good time to get in.

john banks

I'm mainly in cash, but the returns are negligible or even negative depending on your view on inflation.

I'm still up £4k on gold over the last two months, but this latest correction has been brutal. The gains now don't quite make up for the losses I've taken on shares.

The point about wage inflation is important if we are going to inflate out of debt.

I still believe gold has some way to go simply because of all the cash chasing bad debts and negative interest rates. I still believe Japan may be a recovery play. I really can't see what else to invest in, so I keep 10% in each of Gold and Japan, and 2% in each of BP and FTSE-100 that I didn't sell in time before it all slid into the abyss.

Does anyone share the concern I have that by propping up the system with liquidity we'll not allow to fail what has to fail so we can recover? Should we just protect depositors and let the market destroy what it has to destroy? Even as a shareholder in some of the companies that would fail I think this would be preferable.

pslewis

I've been watching the South Coast Property Market for 24 months now. I fancy a place down on the coast as a bolt-hole.

Today I have had an e-mail about a 3 Bed Property new to the market at £159,995 close to the seafront (but not with views).

That would have been unheard of just 12 months ago, for 12 months prices have held pretty much and none have sold as far as I can see ....... now people who need to sell are marketing at vastly reduced prices.

Saw a 1 Bed on the market today too, there was a cot in the only bedroom - this couple need to sell, clearly ........

It's starting to look very much like 1989 all over again - only this time I'm ready and waiting.

Deep Singh

FB and TB please comment on my alternative view!

If during those 5 years prop/equities show growth Mr Money can put his £500k there and enjoy a return that Mr Debt can't

If during those 5 years prop/equity fall in value, then at some point Mr Money can buy MORE of them for his £500k, so his buying power for investment purposes is enhanced not eroded.

Either way Mr Money comes out on top, doesn't he?

JB, I've been thinking about you when the POG fell! If it continues to fall, along with equities then where will you hide? You are then reliant on major falls in property prices. Problem is it will be the kind of property that you are after that will fall the least ie desirable family home. But fall it will imho so you will probably still do well.

The goldbugs (including your good self ) were being very smug when gold went $1000+, nice to see some of that wiped away

Deep Singh

Where you looking Pete, I've always fancied something around there aswell. We could spend summers together

pslewis

Be good to spend summers with you, I doubt you could keep up with me - mind you!

Devildog

Edit for accuracy, FB.

its looking likely that there will be an increase in bankruptcies for individuals, together with an increase in corporate failures (both are pretty certain due to unsustainable levels of borrowing - particularly as far as individuals are concerned) but much of what you read and hear in the media is pure speculation and sensasionalism.

But don't expect catastrophic failure. Less flood gates opening , more steady flow from the overflow pipe.

The real danger here is that the media actually create a bigger problem than that which exists by poor reporting

pslewis

"The middle classes have become the latest victims of the spiralling debt crisis because of “super-inflationary” rises in the cost of living, a leading debt group said yesterday.

The Consumer Credit Counselling Service said that while steep rises in energy and mortgage costs had hit the oldest and poorest hardest, the increases had been so dramatic that even the professional classes were struggling. Experts said that the figures marked a more serious era in the country’s battle with debt because they showed that the problem had extended from borrowers with credit cards and personal loans to all households, irrespective of how much they had borrowed or what they earned.

The gloomy assessment comes as Gordon Brown gave warning that the year ahead was going to be tough and people “are already feeling the pinch with their shopping and fuel bills”.

Writing in The Sun, the Prime Minister nevertheless said that people “know that the Labour Government has got the economy through tough times in the past. And we have taken the tough decisions which will see us through again.” He said that Labour had worked hard to build a record of stability over the past ten years. “And my guarantee to the British people is that we will hold on to that stability in these latest tough times.” "

MikeCardiff

iTrader: (2)

Sounds a bit over the top from the CCC - living costs havent gone up THAT much - OK people may not have as much expendable income as before, but unless they were spending every penny they earned on essentials then it isnt going to have a drastic effect.

Unless their definition of 'the professional classes struggling' means having to wait until next year to buy a new X5 rather than this year, which is hardly living on the breadline. Having your living costs go up for someone who earns £50K a year is nowhere near as bad as for someone on £12K.

Simple situation as I see it is the only people who are going to really struggle from increasing costs are those that borrowed too much in the first place, often for stuff they didnt really need.

When I was younger, and earning next to nothing ( I earned just enough to pay my rent and bills, with nothing left over each month ) I didnt go out and get a credit card to buy a new TV, or car, or pay for a holiday abroad.

john banks

Deep, there was some overdue smugness to be wiped off the face of the gold bugs (me included). When it was in the mainstream media I did start to worry, and was glad I hadn't extended my position. Overall, my purchasing power for a house hasn't changed substantially through investment gains over the last year as losses on stocks have offset much of any gains after inflation. However, the purchasing power has increased due to new savings. Whilst everything else has been hammered, UK housing hasn't really moved much yet. I suppose if I had to own gold or a house from here on, I would still choose gold, but I'm not putting everything into it - I never do.

I've had bad timing with investing, starting as I did in 2001, although the vast majority of spare cash went into clearing the last mortgage.

Deep Singh

Gold will be interesting to watch over the year. I'll be honest I was about to pile in just before this correction! When it hit $1000 I thought it might power on to the inflation adjusted high of before ie circa $2000

BTW, what do you think of Mr Money vs Mr Debt in the high inflation scenario above. Do you agree with FB and TB that Mr Debt will benefit at the expense of Mr Money?

john banks

Until the recent commodities correction (and probably since) I think that things are highly inflationary. However, I'm mainly holding cash (I'm cautious, it is a house purchase fund) which would thrive in a deflationary environment.

BoE has a mandate to control CPI, yet Mervyn expects to write letter(s) this year to the badger. Trouble is, like government borrowing they keep targeting into the future and overshooting. Also CPI doesn't reflect our real living costs.

I wouldn't need to bother with anything other than holding cash (which was my original intention along with whatever shares I already owned) if I believed in our currency to hold its value and not be eroded through inflation. Presently I think things are in favour of Mr Debt, but his situation is rapidly worsening. Where are his wage rises going to come from?

If commodities are wobbling, shares are collapsing, RPI linked savings certificates are already full up and houses look set to collapse next then it really is difficult! There is no UK asset class I can think of that hasn't been overbought through money supply increases (inflation). At least by not owning property I can move quickly as the situation changes and try to shift my allocation. I suspect despite the recent commodity wobble I'm still underweight on gold due to my concerns over inflation, but my cash is unlikely to lose 10% of its value in a few days LOL.

Some people have the worry that we will go Japanese (horrible deflationary bust) because the banks are being bailed out.

fast bloke

You are completely correct about the scenario being far fetched. It would be unusual for an ecomony to only go in one direction for 5 or 10 years, so this is extreme. The point was to make the Petes understand that there is more to an economy than they read from the Daily Mail. There are millions of other factors to take in, including pound cost averaging which you describe. If I had 500k of savings I wouldn't be too worried. As it is, I have a 'good supply' of affordable debt, so I am not worrying too much anyway. It will be difficult to beat inflation over the next couple of years, but losing a couple of percent to inflation in what could be a fairly traumatic economic wobble won't be as much as many people will suffer.

If you had 500k that you could have a blast with, you could do worse than get into American property in another few months

Deep Singh

JB, I don't think the RPI certs are sold out because I've just applied for some and the paperwork to be signed has arrived.


still can't figure what to do with this years equities ISA, maybe just put cash into a wrapper Isa awaiting a buying oppo on some ETFs later in the year when things become a bit more clear?

john banks

Each person can only buy a 3 and 5 year certificate for each issue though. There isn't a release date yet for the next issue.

SunnySideUp

Good grief ..... 1 year on and events have proved the above

Leslie

Yes but how long ago was I telling you what was going to happen when you were praising the way the economy was being run by your heroes?

Les

kingofturds

iTrader: (1)

This has been been evident for 4 or 5 years now, it seems only the bankers and Labour politicians failed to see it coming.