Here in UK the party Political Conference season has kicked off, the Liberal Democrats being first out of the blocks, holding their shindig in Bournemouth, a seaside resort on the south coast of England. Not a word about savings increase policy, but then none of the parties will whisper a word about it, because none of the politicians realises that it is one of the keys to a wealthier society.
This is how it works. If the Government give incentives to save, the amount of capital for investment in industry and commerce increases. Yes people also use those savings for things like the deposit on a house, or putting towards a fancier holiday. But we are talking UK macro economics here, so a 1% increase in savings, is £billions in a year. I haven’t worked out a particular figure, because I didn’t specify 1% of what? The point is that industry that is well Capitalised, (and this is an average of course) is also more efficient.
self filling a wine glass, from a regular glass bottle
Let’s take an example, Jane Toper has just decided that her device for self filling a wine glass, from a regular glass bottle, will take the world by storm. She has £10,000 of her own savings, she has had a trial device made, and she can source them from China at £1 per device. Now having the trial item made took £1,000, travelling to China and back just once could say goodbye to £2,000. This leaves her with £7,000, so she toddles along to her bank. Yes they will lend her the money she needs, mainly because she produced a good business plan, and also because she is only asking for a further £14,000, to import the stock.
However, let’s take a different scenario. The UK government has just made some large tax breaks and increased the incentives for the British people in general to save, and they are doing so. Where do their savings increase go, well there would be a number of places, not least the Government’s own National Savings, but also bank savings and shares savings. This is where Industry and Commerce, come into play, they want to see a savings increase, for the simple reason, this gives easier access to Capital, and increased Capital improves efficiency, this in turn raises productivity, and increased productivity increases the number of jobs. Also a knock on effect, is to increase the wages paid, this all comes from a savings increase, by making more money available to Industry and Commerce.
So let’s go back to our fictional Jane Toper, now her savings are £11,000, as an average there will of course be people who have not saved. More to the point because of a savings increase, the bank now has money, it desperate wants to lend money, as a way of earning interest.
This was the case back in the mid 1990s. I was looking to buy a property in Bury with a view to renovating it, and reselling it. I was lent the money by my bank at around the Bank of England’s Minimum Lending Rate (MLR), so in effect, the bank were not making any extra profit, however they were making a return on their money, greater than some depositors. Banks make their money by working on averages, as long as the average interest return is greater than the interest paid to the depositors, they are in the black.
able to change any faults at short notice
So Jane goes to her bank with £8,000, but this time she has two proposals, the first much as the above example, the second, is more complicated. She wants to borrow £32,000 (three times her capital) to purchase a couple of machines that will help in the final manufacture of her device. This will enable her to keep on top of design and quality, the final device will be £1.20 instead of £1.00 but she is confident that she can still make a profit, but also be able to change any faults at short notice, should there be problems. Also she is asking for more Capital to allow form merchandising and advertising. I will tell you now, the banks would be more interested in the second proposal than the first, because it is reducing chance, and increasing design and advertising.
More to the point, when the banks have the money, because of a savings increase policy, they want to lend, and make more do$h.
So which Political party will have this on the agenda, certainly not the Socialist Labour party, who are intent on trying the fantasy idea of taking money out of society. This only has the effect of impoverishing the masses, allowing the select few at the top of the Political machinery to become rich. The side product of trying to stop the existence of money, results in killing millions, through starvation due to a lack of money in circulation, I will repeat, money is more beneficial to the poor, than to the rich. The rich always have things, whether land, gold, jewellery or whatever.
so intent on impoverishing the Scots?
The Conservatives are being led by Theresa May, she has little imagination, and is concentrating on #Brexit, and a Chancellor with even less imagination. The other parties don’t count, but even so a savings increase is not on the agenda. The Scottish Nationalists are Socialists like UK Labour, so intent on impoverishing the Scots?
A short blog this week, I was going to say, due to the fact I had my head stuck down a toilet? However this is not quite true, but I have had my head at the back, side and above the toilet pan, a brand new one, which has just been fitted. I am just finishing redecorating the bathroom, another couple of days and it will be ready.
Just a technical note on the decorating, the corner tile is deliberately not over half a tile, because if you look in the other picture, the tiles around the window are over half a tile. I had to decide whether to have the corner tiles each side with only a 60/70mm or so cut off, this led to the tiles around the window all being, about 60mm, so I moved the centre of the tiling 300mm to one side. The tiles are 600mm wide, so those around the window are 360mm, while those in the corners are 240mm. This will hopefully look more professional?