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The cause of our crises has not gone away
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Or they just have differing opinions to you on what is a very complex issue.
In almost all instance Cleaver your above statement would be true, however don't the pursuit of temporary polices have a temporary effect ?
An example would be the VAT cut, does anyone seriously think this did any good ? Expecially when we consider it added £12 billion + interest to the mountain of money already borrowed.0 -
We are recovering from recession, unemployment has started to peak before the inevitable fall later this year and the housing market has returned to stability. Any comments you make now are unsustainable on the back of unsustainable arguments.
No need to make arguments the facts are very clear. Little has been addressed policy wise as yet.
What is clear is that the current situation is unsustainable.0 -
The cause of our crises has not gone away
No he's still on here. Although he doesn't post much these days. But he's always around.0 -
Thing is though, if inflation or sterling devaluation (printing cash) turns out to be the fix to our issue you need to load up on debt now. Imagine buying a house at the start of the 70's for 7K and selling 10 years later for £120K. Your 7K mortgage would look like peanuts against your inflated salary.
On the other hand if we don't have inflation but have stag flation or deflation loading up on debt now is the wrong thing to do.
If only I had a crystal ball I'd know whether to stay put and be mortgage free next year or borrow £150K and have a really nice house
Inflated salary? There's no guaranteed index linking of salaries.
Around 21% of the workforce are now employed in the public sector. So where's the money coming from to pay their inflation linked salaries?0 -
Thing is though, if inflation or sterling devaluation (printing cash) turns out to be the fix to our issue you need to load up on debt now. Imagine buying a house at the start of the 70's for 7K and selling 10 years later for £120K. Your 7K mortgage would look like peanuts against your inflated salary.
On the other hand if we don't have inflation but have stag flation or deflation loading up on debt now is the wrong thing to do.
If only I had a crystal ball I'd know whether to stay put and be mortgage free next year or borrow £150K and have a really nice house
Its deflation imho. firstly, QE isnt printing money and direct cash injection. Its an asset for equity swap. All QE is doing at present is filling the humongous hole that has been created by deleverage. Except QE has to stop in the near future, otherwise the UK risks Investor flight (particularly in bonds). Problem is, US writedowns of troubled assets (owned in large part by UK failing banks) are going to continue on for a couple of years yet. See a problem?
Long and the short of it, I believe we are up creek without a paddle, the UK is going to have to hike rates to attract investors as soon as QE ends, or all hell will break loose. The effects of deleverage will still be here with us.
All Gordon is hoping for is a hold-out to the election. Once that is over, he knows its the Tories problem.
If you have a suggestion where all this corporate cash is coming from to pay for bumper pay rises, then please let me know.0 -
HammerSmashedFace wrote: »In almost all instance Cleaver your above statement would be true, however don't the pursuit of temporary polices have a temporary effect ?
They are designed to do three things.
1. Temporarily support the economy, spending, asset prices, etc at acceptable levels until the recession ends, and real growth resumes and those asset prices, spending, etc can be sustained without help. At this point, the help is phased out.
2. Prevent further asset price falls, unemployment, etc from worsening the situation in the meantime, which would make it harder to recover.
3. Minimise the pain to society in the process.
On all three counts, the policies that have been enacted have been broadly successful. The banks did not fail. Asset prices recovered quickly, further strengthening the banks. Genuine growth is returning, consumer spending is recovering, manufacturing is improving, unemployment is FAR better than expected, and than it was in previous recessions.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Thrugelmir wrote: »
Around 21% of the workforce are now employed in the public sector. So where's the money coming from to pay their inflation linked salaries?
Presumably from the increased tax revenue generated by the increased wages of the 79% of people who are not..... The same place it always comes from.:rolleyes:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
But the underlying problems of overleverage remain, except they are now on public rather than private balance sheets with worthless assets in return.0
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We are recovering from recession, unemployment has started to peak before the inevitable fall later this year and the housing market has returned to stability. Any comments you make now are unsustainable on the back of unsustainable arguments.
Sure it's stable on the back of record low approvals and 40% of the lending that was available in 2007, that is despite QE, record low rates, government owned banks setting up shell companies to stick all their garbage in hoping for 2007 to return, government banks not repo'ing etc...... all temporary measures that cannot be denied or sustained....
And then we have the small issue of a massive, massive black hole in the government finances that is going to have to be filled, otherwise we suffer a downgrade and what do you think that will do to IR'sand the precious [STRIKE]pyramid scheme[/STRIKE], I mean housing market.
I'm afraid your 'stability' is built on the same stuff as Labour's 10 year economic miracle........ sand........ I'm at a loss as to how seemingly intelligent people cannot see not one but several 'elephants in the room.'0 -
The banks did not fail
Depends on how you define FAIL :eek:'In nature, there are neither rewards nor punishments - there are Consequences.'0
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