|A British scene from 2112|
"In the long-term we are all dead"
John Maynard Keynes
A classic quote I am sure you will agree. The news today that the Government are considering 100 year bonds is very interesting; it says a lot about the UK 'safe-haven' status that we could even think of getting away with it.
But maybe we can, when the option is to put money into Spain, Italy or non-democratic emerging markets with flaky attitudes to the rule of law (that Mr Putin, makes the trains run on time etc) maybe this is attractive.
Plus of course the main fuel for all of this malarkey is oil. Wealth is hugely manipulated by oil in the modern economy, which mainly sits in unproductive desert spots. it's owners have no idea what to do with their accrued wealth and desperately don't want to lose it - so they want very safe investments.
So roll-up, roll-up here is a super safe. super long-date UK gilt that will pay you a nice income and your children too and possibly their children as well.
For the UK this would mean an even longet-term debt profile that we already have which would make the Country a safer long term bet - a nice self-reinforcing circle of joy.
No doubt there will be critics today saying 'ooh isn't that a long time' and 'oh, think of the children' and so on. That is a terrible argument that shows understanding only the most basic attempts at political populism whilst demonstrating no grasp of the reality of the situation. Reducing our long-term borrowing costs is good for the Country - essential in fact as our crazy Governments spend a good 7% more than we accrue in taxes at the moment.
Finally of course, think of the investors in these gilts. They are buying into the stability of a Country that has bought 50% of its own Government Bonds with printed money in the last 3 years, has an ageing population problem and is often run by socialist Governments who typically take it to near-bankruptcy before getting kicked out.
So if we can find people who see this as a perfect super-long investment case we should sign up as many as we can as soon as possible...