Guarduan/Reuters: BoE to cut to 1.5% in Dec

Really2

!!!!!!? wrote: »

No, I'm a realist.

Sorry this made me laugh out loud.

That is what you think.

What you actually are is decided by other people.

A Pessimist not thinking the world is going to end tomorrow could see his self as an optimist but to everyone else would still see a pessimist.

A realist deals with the here and now so some of your hypothetical comments are hardly that of a realist. Also you are hardly without Ideals (true of anyone who supports HPC or HPI)

Definition
“somebody who only considers things as they are or appear to be, and avoids ideals and abstractions”

You are defiantly not a realist!;)

PS I would class myself as a realist as I make decisions based on current events and my current situation.

WTF?_2

More bond news from the FT. (Free) registration needed:

http://www.ft.com/cms/s/0/9cbf7d56-b1bc-11dd-b97a-0000779fd18c.html

For any government looking to raise money in the capital markets in the next few months, there was an !ominous development in Germany this week. A German 10-year bond auction failed – something more or less unheard of until this year – as cash-strapped banks and investors snubbed the government offering.
It is a clear sign of straitened times when a benchmark bond in one of the most liquid markets in the world cannot attract enough bids to reach its target amount.
Crucially, it raises serious doubts about whether governments can raise the vast amounts of debt needed to fund fiscal stimulus packages and bank recapitalisations in the current tough market conditions.
Any sign of waning demand may force up bond yields – putting further pressure on public finances when they are already under strain.

I'm sure the UK has nothing to worry about though, since we have a strong economy with solid fundamentals (the financial and retail sectors) that's what Gordon says anyway.

setmefree2

!!!!!!? wrote: »

They got lucky with China's rise to being the 'factory of the world' and thus cheaper consumer goods and used it to base an economy on cheap credit.

I don't think there was anything lucky about China becoming the "Factory of the World". Companies (not governments) made the decision to source their goods from China. This meant that Western Governments had to lower interest rates to deal with the incoming deflationary effects.

setmefree2

dopester wrote: »

From these levels, and surveying the pillars of the economy, the forces of contraction are way too powerful to be stopped by the Bank of England.

The BOE forecast for inflation in Qtr 2 2009 is 1% (November review) which would suggest the forces of contraction are not as powerful as you suggest. Again time will tell.

kennyboy66_2

setmefree2 wrote: »

I don't think there was anything lucky about China becoming the "Factory of the World". Companies (not governments) made the decision to source their goods from China. This meant that Western Governments had to lower interest rates to deal with the incoming deflationary effects.

This hits the nail on the head. China's manufacturing miracle is mainly as a result of Western companies as well as other pacific rim countries relocating their manufacturing plants there.

Anyone visting China (or India) would be astonished by the difference between the wealthy cities and the rest of the country.

WTF?_2

Really2 wrote: »

Sorry this made me laugh out loud.

That is what you think.

What you actually are is decided by other people.

A Pessimist not thinking the world is going to end tomorrow could see his self as an optimist but to everyone else would still see a pessimist.

A realist deals with the here and now so some of your hypothetical comments are hardly that of a realist. Also you are hardly without Ideals (true of anyone who supports HPC or HPI)

Definition
“somebody who only considers things as they are or appear to be, and avoids ideals and abstractions”

You are defiantly not a realist!;)

PS I would class myself as a realist as I make decisions based on current events and my current situation.

Yes, despite the booming economy and nearly a decade of house price rises I was expecting a plunge in house prices and 1930s style economic crisis over 18 months ago and look how that all turned out.

And I'm sure that a government that thought the good times were going to go on forever and based policy on that can be trusted to turn this around by ..... trying to stimulate credit availability to levels of the peak of the bubble.

Also, no politician in the world would ever take the most expedient option when it comes to getting out of a pickle. Especially not ones with the inflation fighting pedigree of the leader we have.


Based on available facts, best case is nasty stagflation and a prolonged recession.

WTF?_2

kennyboy66 wrote: »

This hits the nail on the head. China's manufacturing miracle is mainly as a result of Western companies as well as other pacific rim countries relocating their manufacturing plants there.

Anyone visting China (or India) would be astonished by the difference between the wealthy cities and the rest of the country.

Regardless of where their economic good fortune comes from (selling stuff to us), the fact is that that Chinas entrance onto the World stage as a major manufacturing force gave governments an incredible deflationary bonus with which to balance against rampant inflation in other areas, 'justifying' keeping interest rates low (wouldn't want to undershoot those inflation targets now) and fuelling the consumer's (and hence the economy's) dependence on debt.

Just change the main measure of inflation targeting to CPI which favours cheap imported goods and keep those rates low, low, low irrespective of what is happening to property and other assets.

And copious amounts of credit to cover up the widening gap between people's incomes and the real increasing cost of living.


As long as limitless amounts of cheap credit are available, we'll all be sound as a pound.

Dithering_Dad

!!!!!!? wrote: »

Yes, despite the booming economy and nearly a decade of house price rises I was expecting a plunge in house prices and 1930s style economic crisis over 18 months ago and look how that all turned out.

Yes, you, and only you were expecting this, but no one would listen!!

Why oh why wouldn't the world leaders listen to our own !!!!!!? ?

What a self-agrandising, over-blown pompous a$$. :rotfl:

Really2

!!!!!!? wrote: »

Based on available facts, best case is nasty stagflation and a prolonged recession.

BOE figures forcast infaltion next year is likely to be 1% or less. so your surgestion is sagnation coupled with nasty inflation

You are not a realist as you have only a care for one side of the argument the side you belive in.
Your ideaology of the situation points to you not being a realist, sorry.;)

dopester

!!!!!!? wrote: »

And I'm sure that a government that thought the good times were going to go on forever and based policy on that can be trusted to turn this around by ..... trying to stimulate credit availability to levels of the peak of the bubble.

Isn't that just a political cop-out? An attempt to push the blame away from themselves, knowing that, it would be impossible for the lenders to resume lending so freely, at such multiples, and to bad credit risks.

The Government can't directly order the banks to make certain commercial decisions for easy lending which are against their best interest - even if they have given the banks the means to live on - else they will soon be back needing vast sums more (if they don't have to do that already).

If the Government did force their will (which I'm not sure is anything but a bluff anyway), then that would harm the interests of independent lenders / banks, as it would entirely distort the market, with Government using anti-competitive measures to undermine the market to lend at prices which don't reflect risk or prevailing conditions.

Can it end at the banks? No. The Government would have to come in to businesses around the country, and tell us how to do our jobs. You're cutting back on x-product? No no no. Order more of it now. It has become more expensive to source from Japan? Nevermind.. still order it, we will lend you more to pay for it, and also our banks will lend your customers money to pay for it at higher prices.

Then they can come in to the courts and enforce their new objectives there as well... get rid of the judiciary and install their own yes men to get their policies done.

The banks have to follow what the correct path to match the reality of the world, whilst learning some painful lessons for mistakes of the last 11 years.