UK At 80% Risk Of Rating Downgrade On Current Debt Plan:PIMCO

stueyhants

mbga9pgf wrote: »

I am not a conspiracist, I have no evidence, but my gut feeling is that Cameron is doing everything he can to not win the next election with a landslide.

Yes, he does seem off his game recently

I dont believe personally that QE can go on for much longer, based on the market response.

I'm not sure how much more they could do, but do you think the market would trash the UK if we decided to do another 100bn, say fund half the Gilts this year ?

Sterling could drop another 10-20% as a result but that would be tolerated.

mbga9pgf

stueyhants wrote: »

I'm not sure how much more they could do, but do you think the market would trash the UK if we decided to do another 100bn, say fund half the Gilts this year ?

Sterling could drop another 10-20% as a result but that would be tolerated.

Its not next year thats the problem. Its 2 or 3 years down the road when the market twig that we have practically gone zimbabwe.

Global Corporate shareholders are NOT going to be happy when they find out the cash held by the UK banks participating is getting written down due to lower gilt prices and having their market share diluted with the cash for equity swap.

As you know, things never move easily in predictable patterms, it will be a combination of yet unseen problems that will bring the scheme down around our knees. All I know is you dont get a free lunch in this world and neither does the government. Something will give and when it does, it will go big rather than small.

Thrugelmir

stueyhants wrote: »

Its not black and white, the markets are not going to suddenly ignore the UK just because we cut by 4% and not 10%. Yes rates will rise but with a bit of QE'ing the governement will be able to raise enough money. Sterling will suffer but then imports should drop and exports pick up. imo House prices are going nowhere fast for the next 5 to 10 years.

There's plenty of competition for investors money, both domestic and international. So the offering has to be attractive.

If sterling is allowed to fall. Then foreign investors will suffer an exchange loss on sterling denominated investments. Thereby requiring a higher yield to compensate. Higher yield = higher interest charges to be borne by UK taxpayers.

Thrugelmir

stueyhants wrote: »

Sterling could drop another 10-20% as a result but that would be tolerated.

Oil is priced in US $.... ouch :eek:

Add fuel duty and vat on top of higher base cost as well. Hardly a vote winner!

mbga9pgf

Thrugelmir wrote: »

Oil is priced in US $.... ouch :eek:

Add fuel duty and vat on top of higher base cost as well. Hardly a vote winner!

Not popular with banks either with all that US denominated bad debt!

Thrugelmir

Funnily enough..... improves the bank balance sheets. :cool:

As their liabilities fall.

Banks report results in sterling.

mbga9pgf

Thrugelmir wrote: »

Funnily enough..... improves the bank balance sheets. :cool:

As their liabilities fall.

Banks report results in sterling.

Sorry, going off the basis that it was an asset, not a liability.

purch

The first hint of rates rising they will just do some more QE, small sporadic amounts just to prevent a Gilts strike over the next 6-12 months. Yes it will force sterling down further but the markets will accept it

Is this the same Sterling that has appreciated in value against the USD and EUR over the last 12 months, in fact ever since the QE program started.

Forumonics.............doncha just luv it !!!!!!!

purch

Its not next year thats the problem. Its 2 or 3 years down the road when the market twig that we have practically gone zimbabwe

Those Markets are so dumb.

Not a match for a Forumonicist pontificating on a Forum.

Forumonics.............doncha just luv it !!!!!!! :rolleyes:

purch

Sterling could drop another 10-20% as a result but that would be tolerated

Well Sterling went UP in value since the £200 Billion of QE was started, so I am sure you must be right.

Forumonics.............doncha just luv it !!!!!!! :rolleyes: