Oops

WTF?_2

StevieJ wrote: »

My LIBOR rate is bigger than yours, link from the Times relating to 1981, have look at the Libor rate.

http://archive.timesonline.co.uk/tol/viewArticle.arc?articleId=ARCHIVE-The_Times-1981-03-11-17-005&pageId=ARCHIVE-The_Times-1981-03-11-17

What was the spread from the official BoE base rate like though? I'd guess LIBOR was within a few tens of bps of base rate.

WTF?_2

Generali wrote: »

It's going to be interesting to see how things pan out.

My feeling is that we were 'due' a recession when the dot com bubble burst and that it was avoided by a little bit of luck really. The monetary stimulus that was given to the economy by slashing interest rates should have caused inflation but that was avoided due to the Chinese flooding the West with very cheap consumer goods. Where the added money did show up as inflation was in asset markets, particularly housing.

My feeling is that this time around, monetary stimulus isn't going to work as the mechanism for getting the cheap money into the hands of businesses and consumers has broken down.

That is why I think we'll see deflation unless the Bank of England starts printing money by increasing the amount of money available to the Government with 'steralising' the increase by selling bonds.

At present, the Fed isn't selling bonds as quickly as it should so at present they are printing money (in a Mugabe fashion). It is generally assumed that they will get round to selling the bonds soon. If they don't then they will quickly discover that bond vigilantes aren't dead, they're just resting!

Bang on. :money:

And then we'll also discover that inflation isn't a thing of the past.

StevieJ

!!!!!!? wrote: »

What was the spread from the official BoE base rate like though? I'd guess LIBOR was within a few tens of bps of base rate.

That is discussed above, hard to tell but I think you are correct.

Generali

StevieJ wrote: »

That is discussed above, hard to tell but I think you are correct.

It's very unusual for overnight LIBOR to be more than about 50bps away from the base rate. 3 month LIBOR is different though as interest rate expectations are built in to the rate banks offer.

Kez100

PasturesNew wrote: »

Five to five.

....and it's Crackerjack!

purch

Sorry to be a pedant (but I'm in a grumpy mood tonite)

LIBOR didn't exist in 1981.....

.....and Minimum Lending Rate was the rate that the Bank lent money to members of the London Discount Market Association, and thus was set and used in a totally different way to what we now refer to, as the Base Rate (and it's in-built inflexibility was the main reason why it was replaced by the Band 1 to 4 dealing rates in August 1981)

Right...got that of my chest. :cool:

.......:eek:

Pobby

mewbie wrote: »

Ahhh, thank goodness we can get this over with.

Wise: Jamaica was captured by the English in 1655
Morecambe: Yes, and they lost it again at ten past five!!
Audience: Hysterical laughter.

ps. You don't know how carefully I checked my 24 hour clock knowledge on that one. After the jpeg incident I have no desire to be caught out by PN yet again.

No,no I must`nt, oh well tin helmet on................

I say, I say, I say, my wifes gone to the West Indies

Jamaica?

No she went on her on accord.

I thank you!!!!

StevieJ

purch wrote: »

Sorry to be a pedant (but I'm in a grumpy mood tonite)

LIBOR didn't exist in 1981.....

.....and Minimum Lending Rate was the rate that the Bank lent money to members of the London Discount Market Association, and thus was set and used in a totally different way to what we now refer to, as the Base Rate (and it's in-built inflexibility was the main reason why it was replaced by the Band 1 to 4 dealing rates in August 1981)

Right...got that of my chest. :cool:

.......:eek:

The graph was named 3 month interbank lending rate, although not called LIBOR is this not the same?

Generali

Pobby wrote: »

No,no I must`nt, oh well tin helmet on................

I say, I say, I say, my wifes gone to the West Indies

Jamaica?

No she went on her on accord.

I thank you!!!!

Mrs Generali went to Indonesia?

Jakarta?

No she took the plane.

**silence**

Generali

StevieJ wrote: »

The graph was named 3 month interbank lending rate, although not called LIBOR is this not the same?

I think it is but it's not smoothed by taking out the outlying rates as LIBOR is.

I've packed my book from the 1950s called 'How the City Works' written by the Daily Mail City editor so I can't look it up.