Monday, 02 May 2011
Douglas Carswell MP
The House of Commons
London
SW1A 0AA
Dear Sir
Financial Services (Regulation of Deposits and Lending) Bill 2010-11
Congratulations on your speech introducing the above Bill, which I have just seen on YouTube. May I offer some counter-arguments so that you can rebut them when others raise them?
• Were your Bill to become law, the banks might simply offer no interest on “storage bank accounts” and a sufficient differential on “investment accounts” to draw money away from the former, even from cautious savers (but still not enough in the latter case to match inflation). In fact something like this is already happening with people investing in stocks who shouldn’t.
• British business might be at a disadvantage if we have this rule but other countries don’t. Look what the US has already bought from us with “candyfloss money” – the old Cadbury Quakers must be spinning in their graves.
• Savings need to be safe in terms not only of the return of capital, but the return of its real value. NS&I Index-Linked Savings Certificates fitted that bill, and were withdrawn in 2010 for the first time in 35 years. This is an indication of the Government’s priorities, surely. But even when available, money had to be locked up in those Certificates for years. And when first introduced, they were only available to pensioners.
• If you really want sound money for the protection of ordinary savers, then we should have index-linked (and linked to a properly fair index of consumer price inflation), instant-access (or short-notice access) cash ISAs, so that deferred consumption is at least not penalised, if not positively rewarded.
Very best wishes to you and for your Bill,
Rolf Norfolk
INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Monday, May 02, 2011
Sir Fred Goodwin
Owing to a "super-injunction" still in force, I am unable to say any more than that Sir Fred Goodwin is a *anker and has been a prominent *anker for years.
Sunday, May 01, 2011
In the news: Gerry Adams and Libya
In the Daily Mail, Petronella Wyatt recalls how, aged 12, she was threatened by the IRA on account of her father's journalism; she describes Gerry Adams' smile as reminding her of "the glint of coffin handles".
Elsewhere in the news: one of Colonel Gaddafi's sons (and three grandchildren) reportedly killed by a missile on account of Western interests' quarrel with his father. This is not authorised by UN Resolution 1973 and the assassination of political leaders is against inernational law; when the inevitable reaction occurs, the Libyan ambassador is ordered to leave the UK.
It is said that at the Battle of Waterloo, Napoleon rode momentarily within range of a British musket, but Wellington forbade the shot.
Elsewhere in the news: one of Colonel Gaddafi's sons (and three grandchildren) reportedly killed by a missile on account of Western interests' quarrel with his father. This is not authorised by UN Resolution 1973 and the assassination of political leaders is against inernational law; when the inevitable reaction occurs, the Libyan ambassador is ordered to leave the UK.
It is said that at the Battle of Waterloo, Napoleon rode momentarily within range of a British musket, but Wellington forbade the shot.
In praise of rotten boroughs
Democracy is inconvenient and there are moves to tidy it away, one of them being to reduce the number of MPs from 650 t0 585, with the following result (using size of electorate as at 1 December 2010):
Imagine that the constituency in which you live is a vast coach, and the MP your driver. What chance is there that you will go to the destination of your choice? Especially when the front rows are filled with lobbyists, Whips and others with much louder voices than yours.
Whereas in the General Election of 1831, 152 out of 406 MPs were chosen by fewer than 100 voters. Gatton (Surrey) and Old Sarum (Wiltshire) each had only 7 electors and each sent 2 members to the House of Commons. At least you'd have got a drink out of them once every few years.
AV means the driver might just hear a little chorus from the back, above the commercial and cliquey hubbub roaring just behind him.
Imagine that the constituency in which you live is a vast coach, and the MP your driver. What chance is there that you will go to the destination of your choice? Especially when the front rows are filled with lobbyists, Whips and others with much louder voices than yours.
Whereas in the General Election of 1831, 152 out of 406 MPs were chosen by fewer than 100 voters. Gatton (Surrey) and Old Sarum (Wiltshire) each had only 7 electors and each sent 2 members to the House of Commons. At least you'd have got a drink out of them once every few years.
AV means the driver might just hear a little chorus from the back, above the commercial and cliquey hubbub roaring just behind him.
Tuesday, April 26, 2011
Andrew Marr comes clean
About time. I touched on this in 2008 and discussed his inconsistency in 2009. Yes, our interest is prurient - "we know-what-you've-been dooo-ing" - but he suddenly refused to be paid in his own coin. Now he should be in a stronger position to deal with oblique threats from deranged Campbell types.
Why didn't Ian Hislop blow the gaffe before? For all his moral judginess, Hislop was reportedly chosen as a safe pair of hands by those who had got to the age where they needed Private Eye to be their pension fund. In his heyday, Ingrams would have gone for the story and blow the consequences. By the way, how many people were interviewed for the PE editorship when Ingrams stood down? Can't wait for an in-depth on that story.
Still, prudence is the better part of valour. The former editor of Spiked magazine met with a fatal accident in Cyprus shortly after an edition of his publication that included explosive allegations about a then Tory cabinet minister's private activities in a North African hotel.
Mind how you go.
Why didn't Ian Hislop blow the gaffe before? For all his moral judginess, Hislop was reportedly chosen as a safe pair of hands by those who had got to the age where they needed Private Eye to be their pension fund. In his heyday, Ingrams would have gone for the story and blow the consequences. By the way, how many people were interviewed for the PE editorship when Ingrams stood down? Can't wait for an in-depth on that story.
Still, prudence is the better part of valour. The former editor of Spiked magazine met with a fatal accident in Cyprus shortly after an edition of his publication that included explosive allegations about a then Tory cabinet minister's private activities in a North African hotel.
Mind how you go.
Banks still under pressure?
The banks are supposed to get lending again, and simultaneously rebuild their cash reserves. But Bank of England statistics show that reserves are actually falling, instead.
Figures for last month show that year-on-year, notes and coins in circulation increased by nearly 4%, but reserves held in bank accounts dropped by over 11%.
I reproduce the BoE's table below (interesting that they present it in a bashful pale grey on white - the visual equivalent of the civil servant's polite, embarrassed cough?) - click to enlarge.
Figures for last month show that year-on-year, notes and coins in circulation increased by nearly 4%, but reserves held in bank accounts dropped by over 11%.
I reproduce the BoE's table below (interesting that they present it in a bashful pale grey on white - the visual equivalent of the civil servant's polite, embarrassed cough?) - click to enlarge.
INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Monday, April 25, 2011
In a nutshell
You can get a headache thinking about inflation and deflation - but either way you stand to end up broke. Either you'll be rolling in worthless money or you won't have any money.
James Kunstler
James Kunstler
New site launch: Orphans of Liberty
A new site is starting today, run by a (mostly) right of centre blogging collective. Give it a go: Orphans of Liberty.
Sunday, April 24, 2011
Will the government really help us against inflation?
Inflation-proof, government-backed savings will soon be back on sale - or will they?
On 19 July 2010, National Savings & Investments (NS&I) abruptly withdrew Index-Linked Savings Certificates from general offer to the public - for the first time ever. These plans were launched in 1975 and were originally available only to pensioners, at a time of high inflation (24.2% for that year).
Yet last July, inflation was only running at 3.1%, so why stop the offer at that time? The Bank of England base rate was at an historic low of 0.5%, therefore inflation was comparatively 6 times higher; but the difference in numerical terms was only 2.6%. In 1975, the BoE rate varied from 9.75% to 12%, with RPI running at more than double that and the rate difference was over 12%.
One reason for the NS&I hiatus will have been the emergency general review of Government borrowing requirements following the General Election. But another may be the kitten-weak condition of the banks, which are trying to fulfil two contrary directives, namely, to lend money again and also to rebuild their cash reserves. Perhaps they are to be spared too much competition. The anticipated rush for NS&I index-linked plans is such that they have set up an email alert system. When offered, the new certificates could sell embarrassingly fast and draw the public's attention to the Government's suspected inability to address worries about growing inflationary pressures.
But how much, exactly, are they going to offer, and when? Like many others, I misunderstood the Press (e.g. the Guardian) as saying that £2 billion would be on sale; but NS&I's release (23.03.2011) merely states that the target for the total funds they manage, spread over all their products, is an increase of £2 billion, which will "allow NS&I to plan the re-introduction of Index-linked Savings Certificates for general sale in due course. Subject to market conditions, NS&I expects to be bringing Savings Certificates back on general sale in 2011/12."
"... in due course", "... subject to market conditions"; one could hardly call that a blast on the post-horn.
Going back to the Government's own Budget plan as stated in the "Red Book" (Annex B, page 90), the guidance is merely that "National Savings and Investments (NS&I) is expected to make a contribution to net finance of £2 billion", without even a hint that any of this must be from inflation-linked plans.
By contrast, the same page sets a target of £38.4 billion of index-linked gilts. That sounds interesting, except most if not all of that may be taken up by institutions such as occupational pension funds in order to underpin their guarantees to retired members.
What about general savers? Few commercial outfits, if any, can offer guaranteed inflation-proofing and anything like 100% security, let alone exemption from income tax and CGT. This recent article from the Daily Mail details some options, but they are either taxable or risky.
So in some ways, even though inflation is still far from what it was in the mid-1970s, we may be worse off today. Theft by devaluation may have become official, if unstated policy.
INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
On 19 July 2010, National Savings & Investments (NS&I) abruptly withdrew Index-Linked Savings Certificates from general offer to the public - for the first time ever. These plans were launched in 1975 and were originally available only to pensioners, at a time of high inflation (24.2% for that year).
Yet last July, inflation was only running at 3.1%, so why stop the offer at that time? The Bank of England base rate was at an historic low of 0.5%, therefore inflation was comparatively 6 times higher; but the difference in numerical terms was only 2.6%. In 1975, the BoE rate varied from 9.75% to 12%, with RPI running at more than double that and the rate difference was over 12%.
One reason for the NS&I hiatus will have been the emergency general review of Government borrowing requirements following the General Election. But another may be the kitten-weak condition of the banks, which are trying to fulfil two contrary directives, namely, to lend money again and also to rebuild their cash reserves. Perhaps they are to be spared too much competition. The anticipated rush for NS&I index-linked plans is such that they have set up an email alert system. When offered, the new certificates could sell embarrassingly fast and draw the public's attention to the Government's suspected inability to address worries about growing inflationary pressures.
But how much, exactly, are they going to offer, and when? Like many others, I misunderstood the Press (e.g. the Guardian) as saying that £2 billion would be on sale; but NS&I's release (23.03.2011) merely states that the target for the total funds they manage, spread over all their products, is an increase of £2 billion, which will "allow NS&I to plan the re-introduction of Index-linked Savings Certificates for general sale in due course. Subject to market conditions, NS&I expects to be bringing Savings Certificates back on general sale in 2011/12."
"... in due course", "... subject to market conditions"; one could hardly call that a blast on the post-horn.
Going back to the Government's own Budget plan as stated in the "Red Book" (Annex B, page 90), the guidance is merely that "National Savings and Investments (NS&I) is expected to make a contribution to net finance of £2 billion", without even a hint that any of this must be from inflation-linked plans.
By contrast, the same page sets a target of £38.4 billion of index-linked gilts. That sounds interesting, except most if not all of that may be taken up by institutions such as occupational pension funds in order to underpin their guarantees to retired members.
What about general savers? Few commercial outfits, if any, can offer guaranteed inflation-proofing and anything like 100% security, let alone exemption from income tax and CGT. This recent article from the Daily Mail details some options, but they are either taxable or risky.
So in some ways, even though inflation is still far from what it was in the mid-1970s, we may be worse off today. Theft by devaluation may have become official, if unstated policy.
INVESTMENT DISCLOSURE: None. Still in cash, and missing all those day-trading opportunities.DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Friday, April 22, 2011
Things I don't know about Libya
Who is the legitimate ruler, or what is the legitimate government, of Libya? Is is Gaddafi, or Zaid Hamid, or who?
Is there a legitimate government at all? If so, why has 40% of its ground forces been destroyed? If not, why has the situation not been resolved in 40 years?
How do we decide who should rule? Does any outsider have the right to decide?
Who(m) are we "helping"? In what way are they "better"? What will they do if they win?
At what point does the destruction of the "government's" forces constitute an attempt at "regime change"? Is this legitimate, or not (there seems to have been considerable wobbling about this in HM Government recently)?
Is this whole thing like Italy's (Mussolini's) campaign in Ethiopia in the 1930s?
Should the UK have declared war on Mussolini as soon as we perceived that he was a ruthless dictator?
What happens if we stop now?
What happens if we don't stop?
How do other African and Arab nations view our actions?
Is this going to imperil us at home?
How did these Arab rebellions really start? Did Western secret services have anything to do with it?
When will we get some in-depth, non-partisan discussion on the mainstream media about these issues?
Is there a legitimate government at all? If so, why has 40% of its ground forces been destroyed? If not, why has the situation not been resolved in 40 years?
How do we decide who should rule? Does any outsider have the right to decide?
Who(m) are we "helping"? In what way are they "better"? What will they do if they win?
At what point does the destruction of the "government's" forces constitute an attempt at "regime change"? Is this legitimate, or not (there seems to have been considerable wobbling about this in HM Government recently)?
Is this whole thing like Italy's (Mussolini's) campaign in Ethiopia in the 1930s?
Should the UK have declared war on Mussolini as soon as we perceived that he was a ruthless dictator?
What happens if we stop now?
What happens if we don't stop?
How do other African and Arab nations view our actions?
Is this going to imperil us at home?
How did these Arab rebellions really start? Did Western secret services have anything to do with it?
When will we get some in-depth, non-partisan discussion on the mainstream media about these issues?
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