Sep 23

The latest banker friendly wheeze to borrow even more from our future to try to reflate the holed bubble is this: let people gut their pensions to help their kids buy a house! This is stupid no not stupid but really bloody stupid on so many levels. In no particular order

  • Asset prices like house prices are a bubble being maintained by Govt policy of QE and artificially interest rates
  • Chief losers in all this are the pensioners whose return on savings, investments and pensions are almost nil and unless they’re particularly rich or middle class they really should be joining the Occupy movement.
  • More money into houses would further push up prices that are too high which is the issue.
  • This is mortgage interest tax relief by any other name as pensions are subsidised by the state – another back door subsidy to the financial goons.

The only people this helps short term are

  • Middle class kids who get a house they cannot afford at an unsustainable price so long term their parents money will go up in smoke
  • Bankers get more of the minute %tage of collateral they can call upon’s price upheld and it means more profit for them to deposit abroad.

Long term this policy is madness. Building houses is the answer and the answer to so much more. Even if the UK went bust if it built good quality houses and infrastructure it could bounce back.

Does Clegg see this? Is the banker’s son feathering his nest or just throwing simplistic rhetoric around without a clue?

written by reaction \\ tags: , ,