UNEARNED INCOME! FOR THE ELITE?

COVID-19 BRINGS GREATEST RECESSION EVER! 

I DON'T THINK SO.

1945 After World-War-11
50 million displaced souls.

12^th May 2020

Tony,

MONEY WEEK - COVID-19

UK Cash:- If the measures to limit infection continue; and if treasuries pay 60% of wages with no matching GDP; the effect is helicopter-money for the (not working) workers. On UK stats – that’s 27 million wages at £2,000 per month x 12 = £648 billion per annum of give-away cash. If this cash is not distributed then 27 million households will starve and rebel, and revolt violently; despatching their superiors with pitchforks and scythes.  

Comparatively; unearned income, helicopter-money, for the top 5% (1.5 million households) is at least £106 billion per annum (see below). Multiply by 18 to compare with the workers’ households = £1.9 trillion (£1,908,000,000,000) or three times as much, for Nil productivity. I reckon that £106 billion is half of the “rewards” the top 5% gouge from the economy to pay themselves.

The economy has maintained this printing-of-unearned-money at £106 billion per annum for 3 decades since Thatcher & Reagan; and not gone bust. So, even if we continue to give away £648 billion a year to non-workers, or six times as much as past dividends, the UK can probably stand the attack on sterling (massive devaluation or watering down of cash) for 6 years or more. Note that not commuting/travelling saves an average household about £5,000 a year. The shifts in the economy and spending-patterns will make an interesting exercise for bean-counters (like me).  

It seems to me that Covid-19 is identifying our real-needs from our frivolous-wants. If it continues, many habitual consumer items and activities will not persist. My group of recently (old, tired) resurrected Telework-Consultants estimate that 30% of new WFH teleworkers will opt to stay Working-From-Home; we are hoping that some of this group will relocate to live-in and resurrect our High-Streets, as village like communities – with home-telework-offices. "RESURRECT HIGH STREETS". 

(For America – multiply by 3.5).

UK Dividends: Dividends from UK-listed companies hit £19.7 billion in the first three months of the year, a quarterly record, and are on course to pay out a total of £106.1 billion before the year is out. Link Asset Services regular UK Dividend Monitor reported a 15.7% jump in dividends for the first quarter, with a huge £1.7 billion special dividend from miner BHP Group (BHPB) helping payouts reach a new milestone.

US/UK /Western World: Companies paid out a record $1.43tn (£1.10tn) in dividends to shareholders around the world last year. The record-breaking annual dividend payout from listed companies was driven by strong performances in stock markets in North America and emerging economies, including by some unusually high special dividends, although global economic uncertainty slowed the annual pace of growth. The total payment was 3.5% higher than in 2018.

QED

Noel (We Are All Doomed).

Noel Hodson - Director

Tax Reconciliations, Oxford UK,

From Tax-Havens to Safe Havens

Tel +44 1865 (0)760994 Mobile 07713 681216

 PS - The most chilling Pandemic book is about Glacier-Flu, that kills 2/3rds of the human-race. A VERY GOOD READ.

"THE WISDOM OF ALICE WHITAKER"  

COVID-19 KILLS 1%
GLACIER-FLU KILLS 90% - MOVE TO HIGHER GROUND