100yr gilts...

100yr Gilts... a pretty blunt admission the country needs to go to Ocean Finance.
What's next? 50yr education debt, 100yr mortgages, suddenly "stopping Japan happening here, just happened here". So we run the cost of a single room up to £150,000 since "your children will pay it off or it gets taken from your estate so it does not matter?".
USA education costs more than it returns in lifetime earnings, even for medicine. UK education is a joke with secondary just moved into tertiary. Over 50% of EU do not repay the debt, no doubt having found as Delft & Dresden did that a british "degree" was "superficial educational tourism".
Final salary schemes are shut and their liabilities do not need 100yr gilts, index linked are a waiting minefield of overpriced, broader gilt yields are negative real rates of return. No-one has ever sold the quantity that would make a difference, historic amounts are pretty small globally.
So what is the plan, force banks to buy the debt as they have with gilts re Basel-III, force pension funds to buy the junk. No wonder so many move offshore, it is like walking around in a room full of gasoline waiting for a bunch of smokers to give in and drop a match...
Reply to
js.b1
99 year leases...
Sometimes people want to exchange capital for a fixed income. People still buy war loan after all.
Robert
Reply to
RobertL
Yes, but the income is very small. The annuities returns are poor...
... which was I recall not too successful on one occasion.
UK perhaps simply positioning in advance of the market going to the next domino along. Whilst Greek Success is trumpeted, the yield on Portugal's debt seems to suggests reality is somewhat different.
There should be a full tax audit of every person in the country, then a full audit of all loans - where false declaration of earnings was made a penalty applied to the back-end of the loan is applied. A good case for putting a whole lot of the finance crowd in prison, along with Gordon Brown's failure to hike interest rates to 22-28% in 1998. Better a recession than a structural mess that we have now. So many in UK / USA 18-34 are withdrawing from the consumer market that the end result with be a vacuum down the road.
Reply to
js.b1
In message , js.b1 writes
If interest rates were 22% right now I would have to consider doing what the Cabinet do, hide something abroad. ;-)
Reply to
Gordon H
On Mar 14, 4:38 pm, Gordon H wrote:
If they put them to 22% right now, everyone would be abroad :-)
In the late 1990s it was necessary due to excessively lenient credit rules, multiples, self declaration, supersized wallets to handle the sheer number of credit cards.
Banks & Finance work fine - subject to the leash of Government preventing the people destroying themselves with credit. Governments failed in their fiduciary responsibility, a lot of people should have gone to prison - rather than partying on bailouts. The price will be Government dump the bill back on the people... with interest... with incompetence... but wonder whether it will be with impunity glancing at Greece...
Reply to
js.b1
I agree with most of what you say. Many people could see what was going to happen, you only had to view some of the articles on
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to see what opinion was. The thing is, the "people" you describe were the shareholders. They were the ones voting in the directors and ultimately responsible for their policies.
Many shareholders have lost everything, and I have little sympathy for them.
Reply to
Fredxx
There should never be sympathy for shareholders.
A paper share certificate comes with risks. If they want equity exposure but less risk, they buy an equity fund. If they want something secured on assets, they buy a bond. If they want bond exposure but less risk, they buy a bond fund. If they want proper protection they buy a gun :-)
Sadly with insane 1995-2012 policies bond ownership & saving imploded, so we need 100yr mugs which will be mandated probably by converting all bank deposits overnight. Smells like Argentina actually...
Reply to
js.b1

100yr Gilts... a pretty blunt admission the country needs to go to Ocean Finance.
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I'm surprised that he thinks anyone's dumb enough to buy them.
Who's going to "lock in today's low interest rates" when they are the lender?
I might be tempted - at 8 or 9%
tim
Reply to
tim....
... because he can force people / banks / pension funds to buy them.
We are setting up for an Argentina-II in my view.
Almost every single feature of the UK is the opposite of what is needed.
Savings to £22,000 should receive 8% interest declining to 5% if more than £8,000 taken out in a year - so incentive to save and creates a national savings cushion rather than benefit cushion. Savings below £12000 should not count against benefits. Benefits should be bottom-up (so critical needs met) rather than top-down (so no money left for critical needs). Taxation replaced by Consumption Tax & Property Tax. Massive rationalisation of the cost of the financial services, sell it to china - or does that lose America's Money Laundering Capital of the World? It is insane that home owners property equity does not count against benefits, yet those who save money does. The UK has a pension bomb, by its own "socialists must create a dependency society".
Reply to
js.b1
I was responding to the comment about the term and remarking that there is nothing strange abotu along term gilt. The rate they should be offered at is a different question.
Robert
Reply to
RobertL

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