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“No people without houses, no houses without people”. The rise of activism in Spain. Some may say and about time to. 🙂
http://www.guardian.co.uk/world/2013/mar/04/corrala-movement-occupying-spain
Spain’s unemployment rate hits five million in February. The crisis is getting worse.
http://www.guardian.co.uk/business/2013/mar/04/eurozone-crisis-eurogroup-cyprus-spanish-unemployment
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A tricky situ…. I dread to think that people would squat in the repo flats in our block…breaking in and living ‘rent free’ and the banks can’t get them out. What does that do to the community (as they surely won’t be paying the monthly fees?). So they’ll use the community areas, take out their rubbish, go up and down in the lift, turn on the lights…but don’t pay for it.
It’s not great to say but a lot of the worse types of areas have often been doing this with social housing. The ‘ownership’ can change hands for a few thousand euros. Cheap housing for families for life. They often have doors linking into the neighbours property to avoid police visits….
I personally really don’t want gypsy squatters in any of the repo flats near ours. Life paying that blooming mortgage is hard enough without then a whole lot of people moving in, making a mess/noise and causing even more damage. Let the flats stand empty I say…..or keep the squatters in Seville!
Why can’t everyone who wants to hand their keys back be allowed to… then bail out the whole blooming country and start again? At least then they’d know where they stand. When Romania enters Europe then Spain can house them all there!
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@itsme wrote:
A tricky situ…. I dread to think that people would squat in the repo flats in our block…breaking in and living ‘rent free’ and the banks can’t get them out. What does that do to the community (as they surely won’t be paying the monthly fees?). So they’ll use the community areas, take out their rubbish, go up and down in the lift, turn on the lights…but don’t pay for it.
It’s not great to say but a lot of the worse types of areas have often been doing this with social housing. The ‘ownership’ can change hands for a few thousand euros. Cheap housing for families for life. They often have doors linking into the neighbours property to avoid police visits….
I personally really don’t want gypsy squatters in any of the repo flats near ours. Life paying that blooming mortgage is hard enough without then a whole lot of people moving in, making a mess/noise and causing even more damage. Let the flats stand empty I say…..or keep the squatters in Seville!
Why can’t everyone who wants to hand their keys back be allowed to… then bail out the whole blooming country and start again? At least then they’d know where they stand. When Romania enters Europe then Spain can house them all there!
Isme – I think your post is a tad harsh. The examples given in the article were ordinary people down on their luck. A 71 year old man who had a triple by-pass op sleeping in the corridor of his evicted apartment.
I do agree there are always free loaders in any society but most people are in genuine need through no fault of their own.
Has society become to self concerned and insular that we no longer care what happens to those that fall through the cracks? I don’t want to live in a world like that. I hope all these unoccupied properties owned by banks get occupied.
After all they are responsible for these problem in the first place. 🙁
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I don’t know enough about the Spanish benefits system to comment at length, but it also caters for poor people who would otherwise have fallen through the safety net. I believe It’sme once posted about various benefits not generally known to expats. I do know that the Spanish authorities look after their country folk rather than the foreigners.
But all countries are affected by austerity and take various measures to enforce it. The UK and Theresa May is currently trying to take away our human rights, they want to repeal the Human Rights laws.
Mine is a small expat voice, but I can’t be the only one appalled by such a move?
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@logan wrote:
@itsme wrote:
A tricky situ…. I dread to think that people would squat in the repo flats in our block…breaking in and living ‘rent free’ and the banks can’t get them out. What does that do to the community (as they surely won’t be paying the monthly fees?). So they’ll use the community areas, take out their rubbish, go up and down in the lift, turn on the lights…but don’t pay for it.
It’s not great to say but a lot of the worse types of areas have often been doing this with social housing. The ‘ownership’ can change hands for a few thousand euros. Cheap housing for families for life. They often have doors linking into the neighbours property to avoid police visits….
I personally really don’t want gypsy squatters in any of the repo flats near ours. Life paying that blooming mortgage is hard enough without then a whole lot of people moving in, making a mess/noise and causing even more damage. Let the flats stand empty I say…..or keep the squatters in Seville!
Why can’t everyone who wants to hand their keys back be allowed to… then bail out the whole blooming country and start again? At least then they’d know where they stand. When Romania enters Europe then Spain can house them all there!
Isme – I think your post is a tad harsh. The examples given in the article were ordinary people down on their luck. A 71 year old man who had a triple by-pass op sleeping in the corridor of his evicted apartment.
I do agree there are always free loaders in any society but most people are in genuine need through no fault of their own.
Has society become to self concerned and insular that we no longer care what happens to those that fall through the cracks? I don’t want to live in a world like that. I hope all these unoccupied properties owned by banks get occupied.
After all they are responsible for these problem in the first place. 🙁
Banks and councils. It was the councils that benefited from the boom by being able to sell off land at inflated prices to the developers, as well as the increased tax take when the developers sold the properties to the general public. The councils fed the boom as much as the banks – well in many cases it is hard to distinguish between the two.
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@UBEDA wrote:
when unemployment benefit run out claimnants get €400 a month for a further year; this has just been extended for another 12 months to avoid blood on the streets. With the €400 and a bit of work in B they can tick over for years :/
According to the Spanish forums many people have difficulty accessing the €400. Even if they do with average rents at €385 it is a bit of a bleak outlook…I’m ok though, let them eat cake 😉
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The unemployment benefit in Spain (Paro) is increased every year in line with inflation, it’s double than that in the UK. It’s the same for all the other benefits, they’ve all been increased. There is no direct equivalent to the UK housing benefit, there has not been a need for it, but subsidised rents are now the norm.
Where Spain succeeds over the UK is in making claims by foreigners almost impossible. The Social Security offices have notices on the walls in one language only, nothing like the nonsense back in the UK where they have as many as ten different languages and claimants advisory groups to help the foreigners.
I am unable to understand why the failed expats gleefully report any harm that befalls Spanish people, it’s perverse.
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Paro is for a maximum of 2 years and that’s it. The majority of Spaniards don’t get the max as they have gaps in their work record due to the practice of short term contracts.The €400 is mainly for people on job training schemes. There are certainly no subsidised rents in Andalucía and a quick google doesn’t bring them up in other areas either. Last week in Málaga sur there were pictures of families living/squatting in empty locales. If anyone knows any help they should tell the Spanish 🙄
Interestingly when paro stops the worker is not counted in the unemployment figures anymore. According to the Guardian there are over a million more unemployed than the 5million plus officially unemployed
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I don’t think that it’s harsh because i’ve been seeing what’s been happening for years….
There is an underclass in Spain just like there is in the UK and you don’t have to be a snob to say it. They are often worse than gypsies in their behaviour. Some of those squatting are probably down on their luck people but in the main they’ll be people who did buy a duplex with only the wages of a cleaner and got a nice BMW to swan around and show off in as well. They were probably all claiming the dole in the family and they’ll have the plasma tv etc. They then won’t pay their mortgage for years….and tap into their neighbours electricity etc. and then howl with injustice if the banks repossess them.
Yes it’s true it’s really hard to feed a family and pay a mortgage on 400 euros of benefits. Why oh why don’t they at least try to make a 50 euro payment each month, show the bank that they have the intention of paying?
I really didn’t think that I would ever be on the side of the banks with something but I think that it’s really unfair that the banks hound someone like my husband (when we make payments each and every month and he’s given up years of smoking because we couldn’t afford the luxury of him setting fire to something!) yet they let others go for years ignoring letters. It’s because we have a guarantor and not a guarantor like many immigrants did of one guy with a decent wage being guarantor for four or five family members each getting a mortgage and property and then he flies back home and they all hand the keys back. That kind of situation has cost the banks over half a million euros yet they let them go!!?? They then hound some Spanish guy who’s elderly parents have a little house (as they did with the guy who recently killed himself).
It’s what makes the average stuck in the middle Spanish person furious!
Examples I know:
women who live with their partners and children claiming ‘single mother’ allowance of 500 euros for 6 months because ‘they aren’t married’. That’s not right, they are living with their partners so therefore as if they were married.
A guy who claims 2000 euros per month (for life) in benefits because a car scratched his arm years ago. He now can’t lift a certain weight so can’t work. It doesn’t stop him going shooting with the best on the market shotgun and drive around in a 4×4. Try and find a doctor who’s brave enough to tell him to go back to work though.
The social houses as I said being handed out to others without any input from the authorities so therefore generations sharing out houses for their families and paying a minimal rent.
As i’ve also said on here before ladies who’s husbands work getting 1500 euros to ‘clean’ the town for 6 months wearing a high viz jacket. Nice job if you know the right people to get it. That sucks in the face of those genuinely out of work who would love that job to pay to feed their children!
The dodgy area school which has to replace school computers every few months because they keep on getting stolen.
Doctors getting beaten up when they won’t sign someone off sick.
etc. etc. etc.
Spain doesn’t have a benefit culture but it does have a group of people who know how to play the system.
It is very sad to hear about the repos in Spain but from being in the situ (to a point) and reading up on it i’m finding out more and more. 85% of dacion en pago (when you hand the keys back to the bank) have been immigrants who’ve basically said ‘go whistle’ to the bank because they are off.
There are endless stories of ‘Maria who comes from Columbia borrowed 300,000 euros to buy a duplex. She got 30,000 euros cash advance which she used to buy a car and send money home to her parents in Columbia. When she was earning 2000 euros cleaning she was able to pay the 1800 euros per month mortgage but now she is out of work and hasn’t paid the mortgage for two years’. Come on!?? The banks did that to themselves, idiots.
There are lots of people suffering in Spain but it does make me angry when they show the lower levels smoking their way through 300 euros of cigarettes a month whilst crying that they don’t have money to feed their porky kids. That they ‘have’ to steal to make ends meet. No they don’t but they have a culture of doing exactly what they want and getting assistance as well.
They won’t be paying 200 euros for their childrens school books…they’ll send them to school with nothing and then the teachers will have to photocopy for them. The same with pencils and colours, parents who have bought for their children will find some missing because the teachers have had to share them around. Is that fair?
I know lots of families who get by quite well and I just don’t know how…. how do they buy nice clothes for their children, have a newish car, shop at Mercadona rather than Dia?? How??
I know of a couple who handed the keys back to the bank on a flat because they were going to buy with cash a duplex. They just didn’t want the flat so the bank took it back. The notary then sold them something else better for far less money. Why didn’t the notary have it flagged up that they were bankrupt??
So, back to the subject. I think that it is very unfair if it’s a genuine repo situation where people bought a home to live in within their means and have been trying to pay but have fallen on hard times. People who have cut back on all expenses to just try to keep their heads above water and still the banks don’t help out with lower payments, interest only or other options (without the blooming notary fees of a grand just to make things worse!). Those people I feel sorry for.
I don’t feel sorry for those who want to hand keys back to their mortgages after years of living the highlife on the banks money and now howl about their rights.
The rights of those stuck in the middle of this mess are being completely ignored ‘because they will just have to pay for it’.
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I would also think that there are far more than 5 million ‘out of work’ in Spain! Official figures, ha ha ha…..
Also who says that non Spaniards can’t claim. What are all the Africans and Morocans doing at the dole office queues then? They must be getting some sort of payment to be there? Don’t they pay a minimum NI for working in the fields?
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@katy wrote:
According to the Guardian there are over a million more unemployed than the 5 million plus officially unemployed
Yes hidden misery everywhere. In Spain the ‘official’ total working population is 16 million people. Reduce that by the 6 million we know are jobless. Leaving the entire country supported by a work force of only 10 million. Less than a quarter of the whole population.
Unless the government is entirely stupid they must realise half the country is working ‘clandestine’.
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@logan wrote:
In Spain the ‘official’ total working population is 16 million people. Reduce that by the 6 million we know are jobless. Leaving the entire country supported by a work force of only 10 million. Less than a quarter of the whole population.
Your figures aren’t right I’m afraid.
Why are you removing the jobless when you should be adding them? The working age population of Spain is about 48% of a population total of approximately 46.5 million which equals 22.32 million people of working age. 16 million people in work and 6 million out of work = 22 million.
16m/22.32m x 100 = 71.7% of the working age population in work, 6m/22.32m x 100 = 26.9% of the working age population out of work.
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zenkarma; it really is quite ridiculous the number of ignorant and malicious posts made on this site. Just as well people like you are around to correct their stupid mistakes. I really hope that newbies to this site with an interest in Spain see through these “small fry” posters who have an interest in knocking spain with incorrect stats and invented anecdotes…….where are the lemons??Did I say posh or did i say lower middle class?? 🙁 🙁 🙁 🙁
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@logan wrote:
If you are right then it’s 16 million working officially of a population of 46.5 million. That leaves 30.5 million people allegedly unproductive. Still unlikely.
I think the figures I’ve quoted are broadly right, they certainly tally with the official figures.
A 48% working age population is also about right, most EU developed economies will have a working age population of around 50%, UK is 52%, France 55%, Italy 53%, Germany 51%, Portugal 50%, Ireland 50%, Netherlands 50% etc, so I don’t think Spain is terribly different in that respect.
Spain is simply suffering from the same problem all the other EU economies are suffering from – an aging population who are living longer.
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@UBEDA wrote:
zenkarma; it really is quite ridiculous the number of ignorant and malicious posts made on this site. Just as well people like you are around to correct their stupid mistakes. (
The figures I quoted came from an article I read. I have no idea who is right or wrong but I am willing at least to admit they were incorrect. However I do know that the contributions you make to this site are often misleading in the sense you paint a rose coloured view of living in Spain and are always right.
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Unfortunately or otherwise, there are certain posters who run Spain down at every opportunity and are quite malicious in their posts; and their identities are obvious to everyone, Angie, Katy and Logan, although the latter tends to be more circumspect in his dialogue, he is cleverer.
Others, me among them, praise Spain when the opportunity arises, which is sometimes difficult during the country’s current woes.
Sensible debates between the Spain haters and Spain lovers are uncommon, I suppose it’s the way of the world; but I’m sure people seeking proper information about Spain and its property market will be able to decide where the truth lies.
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@zenkarma wrote:
@logan wrote:
If you are right then it’s 16 million working officially of a population of 46.5 million. That leaves 30.5 million people allegedly unproductive. Still unlikely.
I think the figures I’ve quoted are broadly right, they certainly tally with the official figures.
A 48% working age population is also about right, most EU developed economies will have a working age population of around 50%, UK is 52%, France 55%, Italy 53%, Germany 51%, Portugal 50%, Ireland 50%, Netherlands 50% etc, so I don’t think Spain is terribly different in that respect.
Spain is simply suffering from the same problem all the other EU economies are suffering from – an aging population who are living longer.
or to put it another way, a population that doesn’t work enough years in relation to its life expectancy. If the official retirement age was expressed as a percentage of the life expectancy rather than a specific age that is politically very hard to change then it might go a long way to solving the problem.
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For goodness sake Rocker for the umpteenth time I do not hate Spain. I like the country and have interests there. I wonder why sometimes I bother with this forum. It’s become a bad habit and a waste of my time. 👿
I started posting here because of the problems experienced by so many and I actually care when people are deceived and lose their life savings. Altruism is misunderstood these days everyone assumes you have an angle. I do not. I continue largely because the misleading bull shit still continues.
I am personally very sad to see Spain in the state it is. It’s arrived there because of the very things we try in a very small way to expose them on here, particularly the corrupt property market in which I have a great deal of experience because I was once an investor in coastal developments.
If that conflicts with you and others tough. I’m not going away.
Incidentally I think you and others on here know full well how corrupt the property market really is in Spain. Why don’t you ever speak against it?
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@Chopera wrote:
If the official retirement age was expressed as a percentage of the life expectancy rather than a specific age that is politically very hard to change then it might go a long way to solving the problem.
Hmm…
So, penalise the current crop of the population heading towards retirement purely on the basis that they happened to be born at the wrong time despite having worked hard all their life and look forwards to retirement. It’s their fault of course that they’re living longer and has nothing whatsoever to do with the fact that governments have royally screwed up the economy and have not forward planned in any way for the possibility that people may live longer and made provision for it in their accounts.
Does anyone else wonder why actuaries actually get paid so much money for getting their forecasts so wrong?
As usual, the solution penalises the honest hard workers and completely ignores the muppets who created the problem in the first place.
Let’s sentence everyone to life of hard labour with no chance of parole or retirement.
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@Rocker wrote:
Sensible debates between the Spain haters and Spain lovers are uncommon, I suppose it’s the way of the world
I think you’re seeing things a little too much in terms of black and white, there’s lots of grey here.
I certainly don’t see Spain lovers and Spain haters here, except perhaps for Jake who seems to hate anyone who owns a property of any kind wherever it might be. But even Jake’s posts contain facts and truths in amongst the spin.
I don’t think logan intended to deliberately misrepresent the figures at all, I think it was a genuine error. That happens and at least he was honest enough to admit it, which is fair enough.
Personally, I don’t see Spain as being any worse than the UK or any of the other EU countries with the possible exception of Germany who have the discipline and economic manufacturing base to survive the current economic black clouds. In many ways the UK is in a worse state than Spain is, the main difference being that the UK’s politicians are smoother, duplicitous and more disingenuous than the bumbling, corrupt clowns that run Spanish politics. The UK politicians are just as corrupt, they’re just more secretive about it.
The whole Eurozone is balanced precariously on a knife edge, on one side is inflation and the other interest rates, they can’t afford for interest rates to rise so they lie about inflation, that seems the lesser of the two evils. Quite how the Bank of England can continue printing £billions without any underlying rise in the inflation rate is a magic trick I’m sure most countries would like to achieve. Spain of course just doesn’t have that option.
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The actual figures for the UK economy point to a decent recovery. Why then are the growth numbers so poor? I think it’s because the BOE does not wish to see consumers contributing to an overheated economy. If interest rates have to rise to counter act that then so many property owners will struggle. Figures can always be massaged legally.
After five years of consumer restraint their is a lot of pent up demand waiting to break free. If credit is once freed up the whole thing will begin again. 🙁
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@logan wrote:
The actual figures for the UK economy point to a decent recovery. Why then are the growth numbers so poor?
What figures are you referring to? I don’t see anything in the UK economy pointing to any recovery in the near future. GDP is down, growth is down, unemployment rising (ignore the government figures it’s a work of fiction and manipulation), Government debt rising, spending rising.
@logan wrote:
If interest rates have to rise to counter act that then so many property owners will struggle.
The government cannot afford for interest rates to rise even a fraction of a per cent, the interest on their £700billion debt would then cost even more to service on top of rising borrowing and spending. Home owners with mortgages are simply a fortunate bystander, it’s not them the government are protecting, it’s their own debt and borrowings. In any case if interest rates did rise, the already struggling banks already exposed to far too much home mortgage borrowing would end up with more debt on defaulted mortgages. The last thing they want.
Interest rates rising is not an option now or in the near future for the UK government, hence them being so low for so long. Rising inflation is the much easier side of the equation to manage, particularly as the government can continue to fiddle, massage and lie about the figures.
Inflation in the UK is not the 2-3% the government wants you to think it is, it’s much more like 6-7% or even higher.
You can’t keep printing more and more money and injecting it into the monetary supply without inflation being the result.
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If what you say is true there’s a dark day of reckoning coming. I don’t believe it’s possible for a democratic government to behave in the way you are suggesting.
Conspiracy theories are usually bunk. UK Company profit is stable with some sectors doing well, notably house builders, dividends satisfactory, house prices rising modestly, unemployment falling, retail sales up 4% year on year, bank profitability allowing for losses for mis-selling of PPI and Libor reasonable with RBS an exception. There are other examples.
Equity markets up, interest rates rock bottom, bond yields down despite the credit downgrade and Sterling steady and a cheap buy going forward.
Some market sectors are failing largely because they are too slow to adapt to changing patterns of consumerism. The market evolves, change or die.
I’m bullish on the UK and US, Europe will languish for years in the doldrums except Germany which really is the consequence of being in the Eurozone.
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@itsme wrote:
I don’t think that it’s harsh because i’ve been seeing what’s been happening for years….
There is an underclass in Spain just like there is in the UK and you don’t have to be a snob to say it. They are often worse than gypsies in their behaviour. Some of those squatting are probably down on their luck people but in the main they’ll be people who did buy a duplex with only the wages of a cleaner and got a nice BMW to swan around and show off in as well. They were probably all claiming the dole in the family and they’ll have the plasma tv etc. They then won’t pay their mortgage for years….and tap into their neighbours electricity etc. and then howl with injustice if the banks repossess them.
When you describe all that stuff, can you fairly say that it happens everywhere in Spain, including Canary Islands or is it limited to few bad areas?
Thanks
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@logan wrote:
If what you say is true there’s a dark day of reckoning coming. I don’t believe it’s possible for a democratic government to behave in the way you are suggesting.
Conspiracy theories are usually bunk. UK Company profit is stable with some sectors doing well, notably house builders, dividends satisfactory, house prices rising modestly, unemployment falling, retail sales up 4% year on year, bank profitability allowing for losses for mis-selling of PPI and Libor reasonable with RBS an exception. There are other examples.
Equity markets up, interest rates rock bottom, bond yields down despite the credit downgrade and Sterling steady and a cheap buy going forward.
Some market sectors are failing largely because they are too slow to adapt to changing patterns of consumerism. The market evolves, change or die.
I’m bullish on the UK and US, Europe will languish for years in the doldrums except Germany which really is the consequence of being in the Eurozone.
Yes, I think we (the UK)are doing fairly well considering. Stock market back to what it was 5 years ago. Time taken to sell a house just over 9 weeks most over the asking price. We are doing ok as is everyone else we know 😀 Lot of sour grapes around this forum they want posts to be like those estate agents sites..I wonder why 😆
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@zenkarma wrote:
@Chopera wrote:
If the official retirement age was expressed as a percentage of the life expectancy rather than a specific age that is politically very hard to change then it might go a long way to solving the problem.
Hmm…
So, penalise the current crop of the population heading towards retirement purely on the basis that they happened to be born at the wrong time despite having worked hard all their life and look forwards to retirement. It’s their fault of course that they’re living longer and has nothing whatsoever to do with the fact that governments have royally screwed up the economy and have not forward planned in any way for the possibility that people may live longer and made provision for it in their accounts.
Does anyone else wonder why actuaries actually get paid so much money for getting their forecasts so wrong?
As usual, the solution penalises the honest hard workers and completely ignores the muppets who created the problem in the first place.
Let’s sentence everyone to life of hard labour with no chance of parole or retirement.
If the current crop expect to live longer then it is hardly penalizing them if you make them work longer as well to pay for those extra years on this planet. There’s no free lunch. If the current crop’s contributions can’t cover those extra years then it just means the next generation have to work extra to pay for the the current crop as well as their own retirements. Not really fair on them either is it? Right now the system is unsustainable and that’s because increasing retirement ages in line with life expectancy is politically difficult – governments just kick the can and leave half the population under the delusion that somehow they can work 40 years of their lives, contribute say 10% national insurance and that is somehow going to pay for nearly 20 years of retirement. Expressing the retirement age as a percentage of life expectancy rather than a specific number at least gets round the political issues and also gives people a more honest (albeit brutal) idea of what they’ve got to do to pay for their old age.
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The whole world is living longer and needs to make provisions for its old people, the old buggers are no longer satisfied with the three-score-years-and-ten and just like Oliver Twist, want more.
To Spain then. 15 years ago an ordinary British pensioner could sell his semi in Croydon and buy in Spain, thereafter living on his ordinary pension. All that stopped seven years ago when Sterling lost 30% of its value and those pensioners went home.
An ordinary pensioner never could buy a holiday home in Spain, if their pension was their only income.
The expats still left in Spain, a million of them, need more than a state pension to survive, and have additional occupational pensions, investments, or more often than not rent out their UK homes.
But it remains a sad fact of life that our pension actuaries got it wrong, they can only work with data from the past, the future is another planet. The baby boomers babies will indeed have to pay for their hippy fathers who didn’t bother with condoms or marriage vows.
‘All you need is love’ doesn’t lie well with being shoved into a care home to be abused when memory fades.
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@Rocker wrote:
the old buggers are no longer satisfied with the three-score-years-and-ten and just like Oliver Twist, want more.
One day Rocker it will come to you and you will scream for the same. 🙂
I doubt anyone can really afford to retire except the super rich. Money devalues in a capitalist system, recessions and inflation come along and wipe you out. Societies are burdened with the weight of pension payments because they failed to make sufficient compulsory deductions from earned income during a lifetime.
If it’s left to the individual most will put it off and by the time they do anything about it it’s too late. I think Spain is probably an easier place as a retirement destination because of the climate and now the cost of a modest property. However the risks are great. There is little social care when you eventually need it and separation from family usually sends them home to their own country. Only those without family ties elsewhere stay.
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Ardun.
As long as there is consumer demand prices will rise accordingly. Of course you can regulate the money supply so people cannot buy stuff but that simply puts others out of work. Unemployment works in reducing inflation but in a global market place competitive forces elsewhere will distort the positive consequences.I know you believe fractional reserve banking and QE is the real cause of inflation but I think that simply represents consumer demand. Business requires funding to satisfy demand in order to make a profit and invest in future growth. Risk is part of banking and capitalism and inflation is a necessary evil.
It’s a bit like a giant washing machine. Money is actually worthless, apart from the gold reserves upon which it’s based. It’s the assets money can be exchanged for which have the real value. These assets need to rise in value otherwise they eventually become worthless.
Command economies such as Cuba have simply stagnated and society there is still in the nineteen fifties preventing aspiration and development. Capitalism with all it’s ills is still the only game in town.
I believe capitalism needs flexibility in so many forms for it to work well. In Europe what we have now in the Eurozone is a form of restrictive practice that is in the end is doomed to failure.
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I already worry about the days, weeks and years flying past at an alarming rate. The annuity tables make terrifying reading.
I still work (staring at a computer screen for a lot of the time and typing rubbish) and expect to work until I die.
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Logan yes but that in reality is just supply and demand. Without monetary inflation prices in general would always decline if there wasn’t a shortage of them because of efficiency gains. Monetary inflation is the is the bad biproduct of a expanding money supply in a fractional reserve system which makes people on fixed incomes become poorer. It makes planning for the future very hard since the good ole fashioned pensions can’t keep up. Hopefully people have during the productive working life bought a house at less inflationairy price levels long before their pension so they can at least survive.
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Yes I agree Ardun. There is no future in retirement, working a life time is the only way to preserve a decent living standard and if you die doing it then that’s just a consequence of preserving personal wealth. Of course in a free society we now have a choice to decide if a much lower living standard is preferable to the alternative of continuing to work.
I’m am an amateur genealogist and have researched and created my family tree dating back to 1688. The records show all of them working until they died. Including my great grandparents. Pensions are a recent phenomenon and retirement a modern concept.
My great grandfather was a labourer in a coal yard at the age of 68. He had been a successful entrepreneur and lived a good life but recessions destroyed him. There was then no social net, he died. 🙁
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I find money theory a bit of a brain twister but I tend to agree with Ardun. In a fiat system both types of money (hard cash and credit) are merely a confidence trick. Regarding hard cash its value is based on the confidence that the amount of it in circulation will remain fairly constant. Regarding credit it is based on the confidence that it will be repaid at some point (ultimately in hard cash). On top of that the credit/lending system (fractional reserve banking) also increases the amount of money in circulation. In theory there is a limit to this though – if banks are meant to keep a reserve back and there is a constant amount of cash in circulation then it can only be re-lent out a certain number of times. However in practice when lending appears to reach a limit the central banks will pump more hard money into the banking system. Hence inflation seems built in (there can only be monetary inflation or deflation and governments will avoid deflation at all costs)
BTW These days the value of money is not based on gold reserves (I believe the US completely rid itself of the gold standard in the early 70s)
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I like this discussion but it’s way off topic. 🙂
A good example currently of the markets attitude to money is Apple Computers. The company has $137bn of cash in the bank yet the market is writing down their share value in a rising equity market.
The reason is the market views money as fairly useless unless it’s used for innovative projects that will produce increasing profit. It could be used for company acquisitions but then what?
Apple have become a victim of their success and without a new Steve Jobs it’s doomed. The moral is as I have said previously money only has any worth for the assets it buys or creates and those assets require inflation to sustain and increase value.
Capitalism is pointless without it.
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