With-profits investment with a life assurance company

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The short version here is that with-profits endowment policies worked very well before the mid 1980’s. You paid a fixed amount in over 10, 15 or more years and you got a fixed amount out at the end of the term, plus bonuses added each year and a final bonus at the end if things were going well. Over the years the larger companies built up very large reserve funds and these were a good garantee that even in bad times you would get the garanteed amount plus the bonuses already allocated. The full amount would be paid out if you died during the term. Stability was the word here. Companies had a record of 100 years or more of faithful service. Then the stock market got more unstable as the get rich quick follow the crowd, boom and bust took over. The Financial services authority (FSA) took over and started giving orders. It put its own pensions in the hands of Equitable Life, which didn’t pay commission to brokers, interfered with broker commissions, did nothing to control Equitable life or warn of its perilous financial position in the 1990s. When share prices fell in 2000 it ordered insurance companies to invest less in shares, just at the time they were a bargain. In finacial services steadiness is required, regulation also needs to be steady, but if a limit on share investments is to be intrduced it needs to be when shares are doing well. Properly regulated with profits investments are excellent for their proper purpose, which is fixed term, for money you understand you can’t have till the term is up, or if you do you might lose some of it. The Revolutionary government will encourage Mutual Assurance companies to offer with-profits policies. I say this in the full knowlege that they are not really recomended by anyone.

Financial Services Authority

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The Financial Services Authority (FSA) will be abolished by the Revolutionary government, and the banks will be regulated by the Bank of England as before.

The banks will be restricted to banking. Depositors money is to used for loans to real businesses, such as factories, retail shops, haulage companies. Real physical businesses, not fronts for financial concoctions. A proportion may be lent to builders and for bridging loans, home improvements, and the like. A reserve must be invested in ‘safe investments’ such as UK government bonds, large establshed UK company bonds, deposits with the Bank of England. No gambling type activities on the FOREX hedge funds futures etc. Banks may own the buildings they use and have a tiny property investment portfolio. They may make new loans for house purchase or provide consumer credit.The amount banks can borrow will be controlled.

Mortgages will be provided by building societies, and consumer credit will be provided by credit unions, or savings and loan companies.

Is the pound safe?

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Are any currencies safe? Well of course not, no currency is fully backed on anything real certainly not on gold. Most counties could not pay their debts if they couldn’t reborrow or simply print more money. Printing money devalues it. Raising taxes doesn’t pay off a country’s debt because it tends to shrink the real economy and put people out of work.

Banks can’t pay their debts that’s why they need continuing taxpayer support. They make lots of money from gambling type activities and so they can afford to pay high wages and bonuses, and pensions. That’s why they deserve taxpayers support. ? !

They also give swap loans to small businesses. They are basically a hedge fund. Interest rate goes up you win, but the bank can cancel, interest rate goes down you loose. Interest rates have artificially been reduced by the bank of England to help the banks lend more to small business. No sorry, that should say, to help banks extract more money from small business. The FSA says these swaps are useful and appropriate products in some cases.

I was a financial advisor at the time of the big bang in the city of London and the formation of the FSA, in the mid 1980’s It has all been  a disaster. The revolutionary government will scrap the FSA, and hand bank regulation back to the Bank of England. At least they might not be so rude to anyone with less than 50 million pounds who wants to set up a bank as the FSA seem to be. The banks will be restricted in how they can use depositors money. The city of London will be regulated, so that it’s word will again be its bond.

Trans-fats

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Lets start to work out what we should eat to stay healthy, and a normal weight, and we’ll see why most of us don’t in fact eat like we should.

A few facts. The present diet in England is more fattening than a 1950s diet and probably not any healthier. Overall health has improved, but this can be explained by improvements in medical techniques and particularly a reduction in infant deaths. The ending of coal burning in cities has eliminated smog. Petrol no longer contains lead. Cars are also built to be safer, and regulation has improved driving standards. Less people smoke.

Certain elements of the traditional Mediterranean and French diets seem to lead to lower levels of heart disease.

There is no evidence that a 1950s diet wouldn’t maintain a steady weight and health standard. Of all the debate about fats, there is one definate conclusion. Trans-fats cause disease. You get them from manufactured food, from restaurants and supermarkets. Food  direct from the farmer, or your garden does not contain them. They should be banned.

Clamping and towing away.

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The Revolutionary government will simply outlaw clamping. Just as it here in France.

Towing away should only to de done by council employees or the emergency services, when actual danger or serious inconvenience exsits.

If the police find a driver unable to drive, for example uninsured, banned, failed a breath test, it doesn’t follow that the vehicle should be automatically towed away. If an alternative legal driver can be found, or the vehicle could be simply collected later if the driver can sort the problem. Pay his insurance for example, or call a towing service himself. It is not good for police, public relations, for the police to be seen to be issuing punishments, rather than reporting offences, for the courts to deal with, wherever this is possible.

It doesn’t look good for the the authorities to crush cars for fiscal offences either. It’s anti-environmental, arbitrary and thuggish. This will be stopped.

Right to be poor, taxation, fines

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The right to be poor, means your money should be yours to spend. You shouldn’t be discrimated against because you can’t afford everything, and you centainly shouldn’t be forced to pay for the best for someone else. A rich person might have a new large flat screen TV in each room, in all his houses, and Sky, but the poor person might only have one second-hand TV. and freeview.

So why does the poor man pay the same for his TV licence.

TV Licence to be scrapped and replaced by a tax on television receivers and television subscriptions such as Sky.

Fixed penalty fines to be limited to £ 20 maximum, and only to be issued by the government.

No private company to issue “fines”, not for any kind of breach of contract, only to charge actual reasonable costs.

Parking charges

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It is very unfair to traders in towns and villages that car owners are charged parking fees to visit them, but not to visit out of town complexes. From an environmental point of view, it is exactly the same if a person drives from his home in the city, to the outskirts to shop, as it is for someone to drive from the outskirts into the city to shop. City centre shops also attract shoppers on foot or train far more than out of town complexes.

Traffic jams are usually much worse on ring roads and near shopping centres than in city centres. All on-street parking should be free, and councils should allow as much parking space as possible and time limits should allow at least 3 hours.

The environly friendly measure would be to charge for parking at supermarkets, but I don’t propose this, as it’s contrary to the freedom to be poor.