Hooray for savings rates cuts

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  • System
    System Posts: 178,077
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    Bowl - your example is correct if you continue selling to UK customers, I suppose say we became more of an exporter? China previously deliberately weakened the Yuan to do so. I suppose it depends on the nature of the business. Benefits lag is true but better than nothing, I suppose inflation may help debt as well as the price of shares themselves being subject to inflation as more money enters our system, perhaps as China begins to spend its reserves of sterling or at least slow the pace of hoarding it

    Very intrigued - growth investors yes, value investors no. Value investing for the dividend usually does better than growth I've read
  • jimjames
    jimjames Posts: 17,532
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    Its a no brainer that people already invested in markets want others to join them and hence hike up their pots too.

    Nope. I'd rather markets drop so I get a better price for units I'm still buying.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • System
    System Posts: 178,077
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    Talex - crashes shouldn't really be a problem with lifestlying and buy&hold - I feel young enough to be 100% equity ;) a crash would be a great opportunity in fact

    I think a rate rise would at least slow the rate of investment but I think it'd be done carefully enough. Mortgages are supposed to tolerate a 3% rise too on the affordability checks so I wouldn't think a 0.5% or 1% rise would trash all the banks
  • jimjames wrote: »
    Nope. I'd rather markets drop so I get a better price for units I'm still buying.

    And then what.....
  • talexuser
    talexuser Posts: 3,494
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    There seem to be so many advantages in a weak currency and high inflation it's surely incompetent we haven't pursued this excellent policy before.
  • wmb194
    wmb194 Posts: 3,220
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    edited 14 October 2016 at 7:26PM
    talexuser wrote: »
    There seem to be so many advantages in a weak currency and high inflation it's surely incompetent we haven't pursued this excellent policy before.

    Britain did, during the financial crisis. You don't remember there were a couple of years of c.5% consumer price inflation and King talking down the currency at every opportunity? Then things settled down.

    Edit: If you define 5% as high but many did at the time, and many uncritically extrapolated that it would last forever.
  • System
    System Posts: 178,077
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    I think the pre brexit vote establishment was largely consisted of an elite who bought foreign labour, foreign products, and went on lots of holidays; they didn't want their little bubble threatened.

    Migrants only percieved the UK as "well paid" because the £ used to be strong and they could send money home, and the old elite were more than happy to have extra labour supply to suppress the UK pay rate. Without a strong pound we're not so "well paid" by international standards so there should be more room to grow than before

    The strong £ of before was doing no favours to local workers, they rarely went abroad and only bought foreign products because that was the only choice they reasonably had
  • mollycat
    mollycat Posts: 1,475
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    I think the pre brexit vote establishment was largely consisted of an elite who bought foreign labour, foreign products, and went on lots of holidays; they didn't want their little bubble threatened.

    Migrants only percieved the UK as "well paid" because the £ used to be strong and they could send money home, and the old elite were more than happy to have extra labour supply to suppress the UK pay rate. Without a strong pound we're not so "well paid" by international standards so there should be more room to grow than before

    The strong £ of before was doing no favours to local workers, they rarely went abroad and only bought foreign products because that was the only choice they reasonably had


    As Bowlhead said earlier, you should really try and educate yourself.

    The stuff you're posting is total nonsense.
  • bigadaj
    bigadaj Posts: 11,531
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    mollycat wrote: »
    As Bowlhead said earlier, you should really try and educate yourself.

    The stuff you're posting is total nonsense.

    I'd agree with the gist of your point, though the post you've actually quoted does make some sense, unlike most others.
  • bowlhead99
    bowlhead99 Posts: 12,295
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    Without a strong pound we're not so "well paid" by international standards so there should be more room to grow than before

    Great: we used to be paid $15 an hour, but if we give up 20% of our wealth from a global perspective in terms of what worldly goods our money will buy us, and get paid $12 an hour instead, we will have plenty of room to eventually grow our salary to $15. Where do I sign?:rotfl:
    ... only bought foreign products because that was the only choice they reasonably had
    Yes, because things like tea, coffee, sugar, bananas, oranges, oil, plastics, precious metals and gems etc are not native to this country, and non-UK businesses from elsewhere in the world dominate the market in manufactured products and consumer services such as white goods, vehicles, smartphones, TVs, video game systems, erection medication, international internet services and social media, market leading industry-standard computer software, not forgetting blockbuster movies and top selling music and arts etc etc, whatever floats your boat, the list goes on.

    The idea that 'the average person' doesn't take foreign holidays so the strength of the pound is not an issue, is nonsense. (aside from the fact that that millions of less-well-off people do still find the £200 for a package holiday to the Med). We can look back fondly on yesteryear when kids didn't want their Playstations and Pokemon and were happy with Hornby and Scalextric, but both those have been made exclusively in China for 15 years now. British retailers like M&S source most of their fabrics from Eastern Europe, Africa or Asia.

    If you are saying that people buy things from overseas because it's the only choice they practically have, you are damn right, but the problem of most goods and services having their market leaders based in non-UK countries is not solved simply by stating it, nor by increasing interest rates or inflation as you would like.

    Devaluing the currency is something that might be expected to improve the current account deficit, although it did not help much in 2007-13 when the deficit widened despite sterling falling. The world is a tricky place, and elasticity of demand for exports and imports together with global economic conditions like recessions, credit availability and money printing, change the outcomes.
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