Just like sending thousands of fit young men ‘over the top’ to march slowly towards the enemy trenches and lay their lives down for the good of the nation, we now see that savers are expected to lay down their hard earned savings to rescue a failed economic system.
After decades of being told to save and prepare for their retirement so as not to be a burden on others they suddenly find that it is the state that is the burden on them and their savings.
Mr Charles Bean, the Bank of England (BoE) deputy governor, has now come clean and said that the recent low returns for savers is part of a strategy. A strategy presumably put in place to force savers to dip into their savings and spend.
He went on to say that 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”.
Sense for who Mr Bean? Certainly not the savers!
The argument goes that the country needs savers to spend some of their capital in order to encourage economic activity so that savings rates can return to normal.
But what of all those people well past retirement who are just about surviving having saved what they could all their lives? When rates return to ‘normal’ they won’t have enough savings left to keep going.
A lot of older people only have money tied up in the bricks and mortar they live in. And the gains were accidental. But also consider this, their position would be the same if house prices had halved. That is a roof over their head and a small income.
Will we just end up with more people reliant on the state after they’ve been forced to sell their houses in a sinking market just to keep food on the table possibly in a rented house, the rent coming of course from ever depleting savings? Or maybe more equity release loans (if you can get one) to batter any hope of passing on an inheritance.
The message is clear, do not save. Because if you do the state will engineer a way to take it away from you, if they get there before the bankers do that is.
How can you encourage the young of today to save when they can see for themselves what happens when you do? Better to live today and worry about tomorrow when it comes.
The real problem is what do we do when the savers have empty pockets too?