stumuzz wrote:Aurora wrote:
Young people today have the same hopes and aspirations that I'm sure you had when you were in your twenties.
I left school at 15(1981) into a savage recession,with no qualifications and one of the most depressed towns in the UK. Then you get on with it.
Aurora wrote: you may have achieved most of your life's goals and like me, had a successful and rewarding career.
I doubt that they ever will.
Yes they will, if they do not read forums like these, keep away from the press that tells them how hard done by they are and use their noddle they will do fine. Of the 7 billion they are very lucky.
PS.
This will make me even more unpopular than I already am.
Eldest daughter qualified in law two years ago and is working for ..... A bank
Stumuzz
I don't go for this general argument that young people today have unrealistically high expectations or have it easer or, at least, as easy as yours and my generation
Sure enough, they have a few more toys to play with than previous generations. But, so what? They know well enough that these toys don't represent real economic advancement or security. In terms of those more fundamental variables, young people of today have it far, far worse than any generation since the war.
People who were born in the West just post the 2nd world war were the luckiest generation alive, ever. This is not to castigate them for their good fortune. I am merely stating facts. They bought into our economy at the very bottom in terms of asset prices. In particular, house prices. In real terms, even when you take into account monetary debasement due to inflation, house prices were fantastically low for this post war generation.
On top of the above was the "job for life" many of this generation enjoyed. They were born into a world where, if you kept you nose clean, if you kept you head down and worked hard, you could be guaranteed a decent private pension and a house that was affordable for one major wage earner. However, if you were not a big wage earner, you could be guaranteed to be looked after by the state in terms of cheap housing, health care, education and, finally, a state pension that would allow you to live a dignified old age. Beverage's "cradle to grave" society, in other words.
Those days are gone now. Today's generation, just jumping on board the system, can expect to have no state pension by the time they retire. They can expect to see health care fully privatized before they reach retirement. Indeed, even if they are able to afford to pay into a private pension, they can expect to see the value of it well below the value their parents and grandparents enjoyed as they will be paying into a contracting economy giving ever smaller returns on investments (not to mention the fact that, in terms of their state pension contributions, these are being used to pay for today's pensioners).
This government, and other governments around the Western world, have been busily "printing" money (or the functional equivalent to "printing") like there is no tomorrow in order to keep asset prices (in particular, real estate) at their current insane levels. Just stop and think about the implications of this for a minute. To help you do that, I want to paint an entirely typical anecdote for you involving one of today's pensioners. This person is one of that post war generation I was talking about, above. He started work in the mid-fifties. He steadily worked his way up to a middling position in his industry, got married and bought a decent detached house commensurate with his economic position. His mortgage was low enough that he could afford to pay into his private pension regularly which was, of course, performing very well as the economy was heading perpetually north. All of this on just the one primary wage coming into his family.
During this time, ever more credit was being lent into existence, inflating the money supply. This credit chased assets in the economy looking for a home that would give a good return on investment. In the fifties and sixties, this would have been in any number of sectors. However, since the mid seventies, much of the primary wealth-generating industries in this country (indeed across the western world) have since moved to developing countries. Nevertheless, money continued to be lent into the economy. This led to that money being diverted into largely a single asset class. Namely, property. Ever since then, an asset class that was already steadily rising in value began to take off. And so we now find ourselves in the position of insanely high house prices. These prices have not risen due to a massive rise in demand (though there has been some of course). They have not risen due to a sudden collapse of supply (though, there is, of course, some shortages). No, the major reason house prices have risen so much is due to a wall of credit chasing them. Indeed, one could argue that we have already had rampant inflation in the Western world for the last twenty to thirty years. It's just that it has expressed itself in inflationary driven price rises in just the one sector and so has not been recognized for what it is.
So what has this got to do with my anecdote, you may ask? To continue his story, he retired about ten years ago and began receiving his pension. About 7 years ago, he decided to sell his detached house which now, instead of being worth the indexed equivalent of the £1000 he paid for it back in the mid sixties, was now worth 300k. He downsized and bought himself a smaller place for 150k and is using the money released from the sale of his house to go on several holidays per year and generally live a very nice retirement.
The thing is, though, you have to consider where all of that "money" has come from. The answer is that is has come from the future. Yours and mine and that of our descendants.
When money is lent into existence in a FIAT system of FRB, what is really happening is that a loan has been taken out from someone's future productive fruits. If the money loaned more or less matches the current supply/demand driven value of the asset it is being borrowed for in order to buy, then the money has been borrowed from the future productive value of the person who has taken the loan out (all other things being equal). However if the amount that is being lent into existence massively outstrips the value of the asset for which it was borrowed, then the "price" of that asset will rise to reflect the debasing rise in supply of the credit that is chasing it. This is what has happened in the real estate market. The upshot of this is that, in a giant ponzi-like scheme, each successive buyer of a given property has been placed in the unavoidable position of having to pay for the rise in value of the previous owner. In other words, the high-on-the-hog lifestyle that is being enjoyed by the now retired person used in my example is being funded by the person who has taken out the massive mortgage when they purchased his 300k house off him.
It was all bound to end in tears, eventually. Eventually, there would come a point where the successive piling on of ever greater levels of debt onto future generation would hit a breaking point. That point came when the economy was no longer able to grow. The reason it was no longer able to grow is because oil hit 150 dollars per barrel. This caused debts to no longer be serviceable and so the whole house of cards began to come crashing down. Don't misunderstand me here, the ponzi scheme otherwise known as a debt based money supply is always a car crash waiting to happen (and that car crash has indeed happened on a number of occasions on our journey from the beginnings of the industrial revolution to the present). It's just that this time is different. This time, it's not just that we had built up unsustainable debt levels (even assuming the possibility of future growth), it's that this time there will be no future growth. The debt's can never be repaid. I think our illustrious leaders know this only too well and so they are engaging in the only game left in town.
Buying time.
We have had one generation who have gown wealthy off the back of the debt of their children. Those children are now so indebted that they cannot afford to keep up the payments and so our governments have, via QE and other fiscal measures, passed the debt onto their children in turn. The kids of today will be expected to bear these debts by way of reduced pensions, reduced health care, reduced education and increased taxes. All in a context of house prices that will be continued to be held aloft if possible.
It's wrong, plain and simple. The debts need to by borne by those who took them out. Or they need to be defaulted on by those who took them out and so be borne by the f*ckwits who lent all of this unsustainable debts into existence. This young generation coming up needs to say "f*ck off, we're not paying" and I, for one, won't blame them.
It's funny, isn't it Stumuzz, how humans have a habit of ascribing the bad things that happen as "bad luck" and the good things that happen as down to their "hard work and ingenuity"
I too left school in 1980 and I too entered the world of work in a savage recession in the North East, one of the worst hit parts of the country. I've done OK though since I was lucky to be there in the boom of the eighties. Nevertheless, I won't have it as easy as my parents since they have enjoyed cradle (and, given their age) to grave social support. My generation are not going to get anywhere near that level of support when we get old and my kids can basically expect to get sweet f*ck-all in terms of
any help when they get old and infirm. hell, they'll be lucky if here is even an NHS or state funded schooling over and above the excuse for state schools they have in the likes of the US.
Although no-one will ever be as unbelievably lucky as that first post war generation, I was nevertheless still pretty lucky Stumuzz. I was born in the right time and place.
And so were you.
Take another look around you Stumuzz.
