If people should be – or even want to – invest in specific schemes, specific buildings and projects they can go look at, touch, then why wouldn’t equity be a better funding mechanism? Actual, you know, ownership?

Rather than 1% bonds at a time when inflation is highly likely to rise?

12 thoughts on “Weird”

  1. Give me bonds that guarantee 1% above inflation and I might be interested. After that I don’t give a toss where the money gets spent.

  2. And when all the cash ends up in the South East, because that is where the savings are, he will moan about the Barnett formula.

  3. I wouldn’t be putting a particle of piss into any of his schemes and should my money ever be taken by force my bill will be arriving in Ely.

  4. Whats the difference between all these ‘bonds’ he keeps pushing, and UK government gilts? Its all government borrowing and the only way the borrowers get their interest is via taxation one assumes. Its not as if there’s going to be any income streams from all this ‘investment’ is it? And if these bonds are just government debt, well thats hardly in high demand from retail investors is it? Anyone who wants some of that can get some if they want it. Who is suddenly going demand these bonds when they haven’t demanded government gilts?

  5. Jim, that’s the problem. Pension funds and insurance companies have been buying gilts because they have to but the BoE has been buying them up and forcing these orgs to go into riskier bonds. Most bond funds have had to buy into junk bonds. However, I can’t see much of a market for bonds at practically zero interest. There is so much speculative activity in bond markets that the real value of the instruments is hard to discern. I don’t think that flooding the market with new debt is the solution.

  6. “1% bonds”

    As an alternative to the 14% year on year I’ve been averaging over the last 8 years with my SIPP?

    You can fuck right off Mr Murphy.

  7. Actual, you know, ownership?

    Tim, what part of fascism*ahem*, excuse me, state direction of private capital, do you not understand?

  8. What’s his obsession with these bonds, why are they needed when the State can simply create all the money it needs without problems?

  9. I wouldn’t want to do him a disservice by getting this wrong but I think the construction is – as people now have savings that’s wealth created by the state. It’s the richer folks that have the wealth, inequality is bad, so therefore we must force those savings into loss making activities in order to reduce the wealth inequality created by government QE.

  10. It’s always hard to discern what the Professor “thinks”, and it will be different tomorrow.

    There was an exchange last year where, despite the evidence of several centuries, he said that those who were relying on equity markets for their savings would be ruined, and that bonds were a better choice. This was because there were no longer any natural resources for companies to pillage.

    In any event we can be confident that if he was In Charge, anyone who did profit significantly from either equities or bonds would be taxed heavily.

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