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Interest rates
Comments
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I suppose I'd have got time off for bad behaviour.
TBH, I love her as much as I ever have. In some ways more. I certainly still find her incredibly sexy.
Blah.
Interest rates at 10% in 3 years to stay on topic.
Hi Gen.. the place for getting jiggy in the afternoon looked nice.;) Handy living near the I Laws...you can get the odd weekend to ....y'know ;-)
So...IYO, low rates (like now for 3 years then Bam...they go up or a steady slow rise over gthe 3 years?
BTW We told the LL to go swivel yesterday.
Will do a thread in a week or so.....bit of storytelling about real life for the board....make a change from the BNP/killscum/ hangGordon threads. ;-)0 -
Hi Gen.. the place for getting jiggy in the afternoon looked nice.;) Handy living near the I Laws...you can get the odd weekend to ....y'know ;-)
So...IYO, low rates (like now for 3 years then Bam...they go up or a steady slow rise over gthe 3 years?
BTW We told the LL to go swivel yesterday.
Will do a thread in a week or so.....bit of storytelling about real life for the board....make a change from the BNP/killscum/ hangGordon threads. ;-)
Oh the interest rate thing I just bunged in to stay on topic. It was very kind of the in-laws to look after the kids so Mrs Generali and I could engage in a range of cultural activities ;-).
The QE thing will either fail on the low side - ie it'll just have no impact - or it'll cause high inflation. Inflationary effects should take a year or so to show up so interest rates might rise then. There is no way of know BTW whether this will cause inflation as it depends largely upon what the sellers of Gilts do. If inflation rises quickly then interest rates will go up fast too. Very fast.
My suspicion is that we'll end up with deflation (falling RPI - CPI is a red herring) despite QE. It's little more than a guess though.0 -
The QE thing will either fail on the low side - ie it'll just have no impact - or it'll cause high inflation. Inflationary effects should take a year or so to show up so interest rates might rise then. There is no way of know BTW whether this will cause inflation as it depends largely upon what the sellers of Gilts do. If inflation rises quickly then interest rates will go up fast too. Very fast.
My suspicion is that we'll end up with deflation (falling RPI - CPI is a red herring) despite QE. It's little more than a guess though.
the QE process is replacing debt from being 'cash' to being gilts.
this cash is then re-distributed to the banks to recapitalise them so that they can be less risk averse and start lending again. all your doing is swapping what asset class public debt is held in.
my view is unless this cash gets into the economy, inflation will not happen to the degree that many people claim or expect.
would you disagree with this?
ps. i see getting rid of the QE produced cash as a more political discussion0 -
the QE process is replacing debt from being 'cash' to being gilts.
this cash is then re-distributed to the banks to recapitalise them so that they can be less risk averse and start lending again. all your doing is swapping what asset class public debt is held in.
my view is unless this cash gets into the economy, inflation will not happen to the degree that many people claim or expect.
would you disagree with this?
ps. i see getting rid of the QE produced cash as a more political discussion
AIUI, the limited amount of 'cash' that has been put into the QE scheme has been taken up by foreign holders of UK debt.
Then what do they do with it?
It current times it would seem a little odd to ramp up risk by effectively swapping Gilts for equities.
My guess is that people taking the cash instead of holding Gilts will be looking to get out of Sterling assets altogether. If QE is going to become a larger policy then that should put downward pressure on Sterling. As I've said before, that will reduce living standards as workers are unlikely to be able to get pay rises to compensate for the Quid falling in the current economic climate.0 -
AIUI, the limited amount of 'cash' that has been put into the QE scheme has been taken up by foreign holders of UK debt.
Then what do they do with it?
It current times it would seem a little odd to ramp up risk by effectively swapping Gilts for equities.
My guess is that people taking the cash instead of holding Gilts will be looking to get out of Sterling assets altogether. If QE is going to become a larger policy then that should put downward pressure on Sterling. As I've said before, that will reduce living standards as workers are unlikely to be able to get pay rises to compensate for the Quid falling in the current economic climate.
ok - that doesn't make QE inflationary though - not that you have said that above.0 -
ok - that doesn't make QE inflationary though - not that you have said that above.
My belief is that QE will fail as it is such an imprecise instrument - bung a load of cash at the problem and worry about the consequences later.
My guess is that deflation will happen as politicians/BoE will give up before they really make a mess of things. If I'm wrong then rapid inflation will be the result. I vote deflation FWIW. It's a guess though.0 -
My guess is that deflation will happen as politicians/BoE will give up before they really make a mess of things. If I'm wrong then rapid inflation will be the result. I vote deflation FWIW. It's a guess though.
i think that you may be right - hopefully not.
i just don't go for the inflationary argument at the moment.0 -
i think that you may be right - hopefully not.
i just don't go for the inflationary argument at the moment.
Nah, nor me. People are paying down debts right now, not spending cash. That means the velocity of circulation is falling so the money supply is dropping despite the quantity of money increasing.
The Aussie Government keeps giving money to relatively poor people in 'stimulus packages'. 80% of the money has been used to reduce debts.0 -
It will be interesting to see where the Tories make spending cuts when they come into power at the next election.
3 letters for you - NHS.
Ask anyone in the NHS at the moment and they will tell you that this Labour government has actually thrown a shedload of money at it over the years they've been in - expect the tap to be swiftly turned off once the Tories come into power. :rolleyes:0 -
3 letters for you - NHS.
Ask anyone in the NHS at the moment and they will tell you that this Labour government has actually thrown a shedload of money at it over the years they've been in - expect the tap to be swiftly turned off once the Tories come into power. :rolleyes:
I rather doubt that - David Cameron has said that he wants to keep building the NHS (mostly due to his deceased son).
What I would like to know is how efficiently has all that money been spent?0
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