Hooray for savings rates cuts
Comments
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MatthewAinsworth wrote: »Why ever buy an annuity when you can buy income funds?
Is the income guaranteed? Plenty of companies have already cut/cancelled dividends. More will follow.0 -
I suppose annuities cover you for an economic downturn abbey and income funds protect you from inflation0
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MatthewAinsworth wrote: »Bowl - I'd like to see a bit of wage inflation, I'm hoping that everyone else's spending will help there
[FONT="]What should matter to you specifically is rises in your own wages in real terms. Wage inflation may make your situation better or worse depending on whether your wages rise by more or less than inflation. Even if by some miracle you could somehow shield yourself from inflation, that wouldn’t matter a jot if your wages didn’t go up. If you want to earn more, don’t wait around for inflation to somehow push your wages up, negotiate a pay increase or get a better paying job.[/FONT]0 -
To be serious for a moment, why didn't Japan just increase rates these past 20 years as a solution? BOE reckons even a smallish increaase in rates would push mortgage payers into trouble, obviously spending would reduce and our debt fuelled recovery would be in trouble. The £ collapse is seen as a saviour at the moment for exporters and dollar earners, I doubt the brexiteers in government would be keen to see the £ strengthen and the FTSE turn around?
I am perfectly serious.
You seem to be saving that the only solution to an asset price bubble is to lower the cost of money continually, to ensure there is no collapse, which simply pushes asset prices higher still?
We've had a decade of running away from the fact that the debts accrued prior to gfc aren't going to be repaid, but people are still treating them as if they are.
So what is your ultimate solution, are we heading for -10% base rates in the future?0 -
I am perfectly serious.
Missed my point, I was being serious to your post as opposed to referring to my couple of ironic previous posts in the thread. As a matter of fact I agree with you, I think we would have been better with a short sharp recession like the 90s and could have built up again from that, rather than the continuous drip feed (as opposed to panic to get out of the credit crunch) QE pumping assets and the market beyond realism, and now appear hooked like a junkie continuously promising to give up (cf Japan).0 -
Missed my point, I was being serious to your post as opposed to referring to my couple of ironic previous posts in the thread. As a matter of fact I agree with you, I think we would have been better with a short sharp recession like the 90s and could have built up again from that, rather than the continuous drip feed (as opposed to panic to get out of the credit crunch) QE pumping assets and the market beyond realism, and now appear hooked like a junkie continuously promising to give up (cf Japan).
Yes but it wouldn't have been as straightforward as the early nineties, it's equivalent to saying that but of flooding wouldn't have harmed us too much as it did last time, when a tsunami was about to hit.
Promoting inflation is relatively a good thing and is the aim of all governments currently, the problem is once it starts can it be controlled.
Japan has its own particular issues, some of which are problematic in that it isn't a very flexible economy and is reliant on exports, but at least mist if their debt is domestically held, unusually for almost all the other major economies.
Just look at the amount of us debt now held by the Chinese, makes their bilateral negotiations more interesting anyway.0 -
Paying your debt is so last century.
Did the Argentinians pay everything back?
Are the Greeks going to pay anything back?
When Donald Trump gets into the White House,
he's going to be more belligerent than Vladimir Putin.
Take 10 cent on the dollar or I'll ram this nuclear dildo up your backside. In his mind, that's good negotiation tactic.:eek:0 -
Yea, you can't rely on political stability so you can't rely on bonds either0
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Thrugelmir wrote: »Seems as if you have little understanding of the true state of the UK economy. Brexit or no brexit. Sterling was significantly overvalued. No point in kidding ourselves that the UK was ultimately immune from market forces and could continue to spend beyond its means. Selling property to each other doesn't create real wealth.
This is very true as are many posts here from Matthew. Reading this thread with interest. The £ was already in a bear market before the vote to leave. What has constantly amazed me since the referendum is the hysteria and the sudden fascination with the value of sterling on the news, on forums such as these and social media. During the recession/credit crunch the £ was even lower than today against the Euro. I remember as I was working in Germany how low the £1 was in 2008. 1 euro = £1.05 . Nobody gave a monkeys. It barely made the news. There were certainly no keyboard warriors going on about it, suddenly all economic experts. And we also had a 0.5% bank rate with high inflation CPI of 5% and again, minimal fuss from most apart from a few OAPS, but hey who cares about them?!
No this, like any piece of bad news they can seize on is all the fault of Brexit
The BoE had no reason to cut interest rates to 0.25% - the economy is doing very well, their actions contributed to this 1% CPI this month. Carney should be sacked, he was Osbornes puppet in the first place. I'm sure he has converted back into CAN$ a long time ago just before he started to trash the £ with his actions and words.0
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