Letters to the Editor – 07/03 – Punishing savers, Fractional reserves, Best of Twitter
Punishing savers
[Re: People too scared to save because they don’t trust politicians, yesterday]
The older generation, who scrimped and saved in order to buy their homes, have now been punished by having to sell them to pay for their old age care, wiping out any useful inheritance that may have helped their children to get on the property ladder. And those who didn’t make such sacrifices often have their care paid for by the state, teaching the next generation to spend. Why save when the state will step in and pay for you? The government has not implemented the Dilnot recommendations in full, and I doubt the next one will either.
Name withheld
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Fractional reserves
[Re: How to boost GDP and demolish debt with one radical policy, yesterday]
Graeme Leach highlights the instability inherent in fractional reserve banking. But his argument fails to take into account the enormous benefits of a system that makes capital formation and thus investment far more expedient. It is with good reason that the world’s banking system is run on fractional deposits, allowing entrepreneurs and investors access to capital that would otherwise sit idle. No system is perfect, but the added stability from a full-reserve system would surely not be worth the massive hit to liquidity and investment.
Justin Clarke
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BEST OF TWITTER
Crimea will go to Russia. The rest of Ukraine remains very much in play.
@ianbremmer
The ECB holds rates, and nerve, in face of deflation risk.
@nr_zero
The ECB is old-school Bank of Japan. “Everything is fine, there will not be deflation,” and so on.
@MaMoMVPY
London not “too large” relative to UK. Other capitals far larger in population and GDP: Paris, Tokyo, Seoul..
@Andrew_Adonis