Comments by "Curious Crow" (@CuriousCrow-mp4cx) on "PensionCraft" channel.

  1. The UK's debt to GDP ratio has fluctuated over the years, with some notable milestones including: 1948: The all-time high of 210.70% 1990: The record low of 21.60% 2023: 97.60% July 2024: 99.4% of GDP, or 91.9% when excluding the Bank of England's debt Back in 1945, we had to spend on rebuilding the economic capacity of the country, and was facing a manpower shortage due to death or disability. The UK chose to deal with that by immigration. Cabinet papers at that time showed that the government envisaged that white people from the Settler Dominions and Ireland would make up the majority of people coming in. However, that was not the case, as The Windrush showed. The response by the government was embarrassment, and then resignation because the labour was needed. They helped in that effort to rebuild the economy to reduce the huge debt owed mostly to the USA after World War II. That debt was finally repaid by Gordon Brown. But several years later, the UK bailed out its banking sector during the Great Financial Crisis. Since then, along with the global economy, the UK has been stagnating. And like most developed economies, they have had to cope with demographic issues such as low birth rates and an ageing workforce. Successive governments could be seen as suffering from short-termism. And have resorted to further immigration to cope with the consequences of negative social policies followed decades beforehand. All this also happened within the context of globalisation which was pursued as a positive ideal. However, the UK’s feverent adherence to neoliberal policies left it particulsrly vulnerable to the GFC, and asset bubbles in the Housing market. And as long as GDP was going up, they could ignore the growing inequality becoming entrenched in its wake. Sadly, that seems it will not be addressed any time soon. And arguably that is a choice. The UK economy is geared up to be a rentier economy, rather than a mixed economy. That means it will be geared up to allow suit extraction of wealth rather than the investment of wealth. And tbh, none of the political parties in parliament seem to have understood the importance of that. As Rohin says, there are things the current government could do, but they are more worried about following a very questionable set of fiscal rules, rather that really looking hard at how best to productively use the money we do have. Austerity has never worked anywhere to grow an economy. You have to spend money on investments that grow wealth and improve productivity. And no-one in Parliament seems to have grasped that.
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  2. You don't understand how inflation works. Inflation reduces purchasing power, and to discover how much inflation has eroded valuations, you compare relative valuations over time less inflation. Just 40 years ago, one could buy a sliced loaf, a pint of milk, and a tub of marg for £1. You can't do that today. That's down to inflation. Likewise, house prices can't avoid the same process. Inflation as measured by CPI is arguably lowballing the impact as well. If RPI was used, the slump in real prices would be even deeper. And it's a Cantillon effect, where the closer one is to the process of money creation, the wealthier one is. Houses don't create money. Lending money to people to buy houses does. So so whoever owns debt in the economy is getting wealthier, but not the debtors.
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  3. We need to talk more about hedging and risk management criteria because if you're buying individual stocks you need to a quaint yourself with risk mitigation strategies and products. Index investors might benefit too, as as buying certain ETFs can mitigate risk in a portfolio.
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  4. No; the banks are merely scalping retail for commissions and fees. They're concerned less with the actual value for money you'll get, than getting the biggest cut of whatever asset or financial services you buy. Retail does not get involved in the big wholesale trades. That happens between banks and non-bank financial institutions. What they will do is manipulate outcomes by betting and using their market power in options and other derivatives linked to equities of individual equities. This is why the stock market and the options market are known as the Little Casino and the Big Casino respectively. And the Banks are the House in both, and as the saying goes, the House always wins. They know how firms can manipulate equity prices in pump and dump schemes and create bubbles, and their always selling the dream to retail. Most retail buyers wanting exposure to equities would be far better off in passive investment vehicles that are based on the whole market, rather than speculation on individual stocks. So buying the right index funds or ETFs that actually own the underlying assets they're indexing is the best way to go for most people,
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