Discussion:
UK wealth goes through the £10tn mark
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James Harris
2017-08-08 14:12:41 UTC
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Raw Message
A few things are worth picking out of this story in the Guardian, e.g.
UK total assets, the UK market's attractiveness to other countries, and
whom QE has helped the most.


A booming City and rising house prices provided a double boost to
Britons holding assets in 2016 as they pushed the nation’s wealth
through the £10tn mark, according to a new survey.

Lloyds Bank’s private banking arm said total household wealth in the UK
increased by £892bn last year – with the property and financial markets
each responsible for half the rise.

News of the 9% jump in the value of the assets from £9.6tn to £10.5tn
during 2016 is likely to rekindle the debate about the UK’s wealth
inequality. Previous surveys have shown that a tenth of adults own half
the nation’s wealth, while 15% own nothing or have negative wealth.

The Bank of England has acknowledged that the richest 10% of Britons
gained most from the money creation programme known as quantitative
easing, since the increase in the supply of credit boosted demand for
financial assets. Since the better off held a greater proportion of
these assets, 40% of the gains of rising share and bond prices went to
the richest 5% of households.

https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving
--
James Harris
Joe
2017-08-08 14:59:40 UTC
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On Tue, 8 Aug 2017 15:12:41 +0100
Post by James Harris
A few things are worth picking out of this story in the Guardian,
e.g. UK total assets, the UK market's attractiveness to other
countries, and whom QE has helped the most.
A booming City and rising house prices provided a double boost to
Britons holding assets in 2016 as they pushed the nation’s wealth
through the £10tn mark, according to a new survey.
Is adding up all the house prices a valid concept? Surely, houses are
'worth' so much only because nearly all of them are not being sold at
any particular time. If you are going to calculate a total value of all
houses and postulate that it is a meaningful quantity, surely you must
do so under the hypothetical condition that they are all simultaneously
for sale?

An insurance company wouldn't accept a valuation for a jewellery
collection which was conditional on no more than e.g. one piece being
sold per year...
Post by James Harris
Lloyds Bank’s private banking arm said total household wealth in the
UK increased by £892bn last year – with the property and financial
markets each responsible for half the rise.
News of the 9% jump in the value of the assets from £9.6tn to £10.5tn
during 2016 is likely to rekindle the debate about the UK’s wealth
inequality. Previous surveys have shown that a tenth of adults own
half the nation’s wealth, while 15% own nothing or have negative
wealth.
The Bank of England has acknowledged that the richest 10% of Britons
gained most from the money creation programme known as quantitative
easing, since the increase in the supply of credit boosted demand for
financial assets. Since the better off held a greater proportion of
these assets, 40% of the gains of rising share and bond prices went
to the richest 5% of households.
https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving
Or basically what I said a week or two ago, QE was helicopter money,
but designed only to land on carefully-chosen beneficiaries, thereby
avoiding inflation of general prices.

The same has happened with all the big central banks, the Fed, the
ECB, BOJ etc. I'm surprised that the Guardian is willing to
acknowledge this, possibly the greatest theft in history.
--
Joe
m***@btopenworld.com
2017-08-08 16:02:52 UTC
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Post by Joe
Or basically what I said a week or two ago, QE was helicopter money,
but designed only to land on carefully-chosen beneficiaries, thereby
avoiding inflation of general prices.
The same has happened with all the big central banks, the Fed, the
ECB, BOJ etc. I'm surprised that the Guardian is willing to
acknowledge this, possibly the greatest theft in history.
Those beneficiaries (or rather beneficiary) was H.M Treasury.

The government authorised the "printing of money" to buy its own debt. QE involved the removal of working assets (bonds) from banks in return for cash. The only way of putting this cash to work was to lend it out as different forms of debt (consumer debt, personal debt, corporate debt etc.)

In the meantime bond interest paid by the Treasury went to the BoE the new holders of the bonds. However, the BoE is nationalised and so all profits that it makes go into the Treasury's account.

Further when bonds mature any redemption paid by HMT goes to the holder (BoE)comes back by the same route.

Can you think of a more imaginative way of cancelling debt?
James Harris
2017-08-10 13:32:40 UTC
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Post by Joe
On Tue, 8 Aug 2017 15:12:41 +0100
Post by James Harris
A few things are worth picking out of this story in the Guardian,
e.g. UK total assets, the UK market's attractiveness to other
countries, and whom QE has helped the most.
A booming City and rising house prices provided a double boost to
Britons holding assets in 2016 as they pushed the nation’s wealth
through the £10tn mark, according to a new survey.
Is adding up all the house prices a valid concept?
IMO the total is meaningless. It's the direction of change which is
relevant.

...
Post by Joe
Post by James Harris
The Bank of England has acknowledged that the richest 10% of Britons
gained most from the money creation programme known as quantitative
easing, since the increase in the supply of credit boosted demand for
financial assets. Since the better off held a greater proportion of
these assets, 40% of the gains of rising share and bond prices went
to the richest 5% of households.
https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving
Or basically what I said a week or two ago, QE was helicopter money,
but designed only to land on carefully-chosen beneficiaries, thereby
avoiding inflation of general prices.
QE is certainly not spread evenly.
Post by Joe
The same has happened with all the big central banks, the Fed, the
ECB, BOJ etc. I'm surprised that the Guardian is willing to
acknowledge this, possibly the greatest theft in history.
One of the interesting things about the story was that the Guardian
published it. A similar surprise is to see the following positive
comments in the FT:

Signs are growing that the weaker pound is boosting demand for UK
manufactured goods, helping to reduce the country’s reliance on consumer
spending to drive economic growth.

Interviews conducted with at least 700 UK businesses during June and the
first half of July by agents of the Bank of England suggest activity has
picked up in export supply chains and that _UK manufacturers are
increasingly producing goods that were previously imported_.

This pick-up in demand, supported by the depreciation of sterling since
the Brexit vote and an acceleration of growth elsewhere in the global
economy, has encouraged some manufacturers to invest more both to
improve efficiency and expand capacity. Sterling has depreciated by 14
per cent on a trade-weighted basis since the Brexit referendum.

The BoE report, released on Wednesday, suggests manufacturers’ plans for
investment during the next 12 months remain stronger than they have been
at any time since spring 2015. Investment intentions among services
companies have also recovered during the past year, following a sharp
fall immediately after last summer’s vote to leave the EU.

https://www.ft.com/content/59f58aa8-7cea-11e7-9108-edda0bcbc928


Both stories are very different from the usual negative output of both
rags.
--
James Harris
saracene
2017-08-10 15:17:48 UTC
Permalink
Raw Message
Post by James Harris
A few things are worth picking out of this story in the Guardian, e.g.
UK total assets, the UK market's attractiveness to other countries, and
whom QE has helped the most.
A booming City and rising house prices provided a double boost to
Britons holding assets in 2016 as they pushed the nation’s wealth
through the £10tn mark, according to a new survey.
Lloyds Bank’s private banking arm said total household wealth in the UK
increased by £892bn last year – with the property and financial markets
each responsible for half the rise.
News of the 9% jump in the value of the assets from £9.6tn to £10.5tn
during 2016 is likely to rekindle the debate about the UK’s wealth
inequality. Previous surveys have shown that a tenth of adults own half
the nation’s wealth, while 15% own nothing or have negative wealth.
The Bank of England has acknowledged that the richest 10% of Britons
gained most from the money creation programme known as quantitative
easing, since the increase in the supply of credit boosted demand for
financial assets. Since the better off held a greater proportion of
these assets, 40% of the gains of rising share and bond prices went to
the richest 5% of households.
https://www.theguardian.com/business/2017/aug/08/total-uk-wealth-city-property-homes-inequality-saving
http://www.timesofisrael.com/jewish-brothers-top-britains-2016-rich-list/
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