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A story in one line
December 10, 2012


They do say that a picture is better than a thousand words and so it is with this “picture”. It tells the story of the UK’s post second world war history.

The bond rate is the price our government has to pay, on our behalf, to the people who lend us money (through the offices of our government) when we do not have the wherewithal to pay for what we want out of our own income. And that is the way to put it as our government, spending and acting in our interests in our wonderful democratic government, has very rarely over the past seventy years, ever lived within its means – in other words has not needed to borrow something or other.

You can see that the UK bond rate bottomed out at the end of the war and rose steadily until the mid-1970s. That was the first great thieving – when those who lent us money to win the war were systematically expropriated. You need to know that as the bond rate rises, the value of the debt already issued goes down in proportion. So those who leant us money, say in 1938, would have found that the value of the security that was exchanged for say £100 was perhaps worth £35 by 1975.

This was the time of the great post war expansion and rising inflation and when the welfare state, though already unaffordable still worked after a fashion as there were enough fully employed people of working age to keep it going. The great beneficiaries then, who stole wealth from the lenders where the post war baby boomers (me included).

And since the mid 1970s? Well rates have fallen steadily as inflation declined and with this, another great transfer of wealth has taken place. This time it has been to the rich – who held assets and were lending money to the state as the value of their assets soared as the bond rate came down. But the government kept spending because life seemed so good, even as we all became older and there were less of us doing real work. And then we had to bail out all those very rich people, who not believing their luck, partied and partied until they had pretty well destroyed the banking system.

So here we are – with the bond rate far too low and bound to rise one day, indebted beyond imagination and with very few us doing the work needed to pay for all of this.

An interesting question is what has all this done for the nation's wellbeing? Any thoughts?

best wishes

Andrew Richardson
Feelbetter Counselling East London

94 Malford Grove, London E18 2DQ

Direct Line: 0208 257 0429 Mobile: 07870 104651 Skype: famrichhg

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