Debate House Prices


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MPC's Posen: Raising Rates would be a "nonsense"

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Comments

  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    I should imagine that the BIS know what they are talking about, not sure about Posen though. With regards to no chance of stagflation, what do we think the annualised growth and inflation figures have been over the past 9 months?
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    I loved this bit that states what may happen if the BIS is right:

    "There are limits to how long monetary policy can remain expansionary. Keeping interest rates near zero for too long, with abundant liquidity, leads to distortions and creates risks for financial stability."

    Compared to what may happen if the BIS is wrong:

    "If wrong, the BIS strategy risks pushing the global economy into depression"

    Hmnnn 'risk of financial instabiity' Vs 'Depression'. Tough call! :)

    What do you think 'financial instability' leads to?

    Bankers and especially Central Bankers tend to use very 'quiet' language. Don't scare the horses and all that.
  • RenovationMan
    RenovationMan Posts: 4,227 Forumite
    Generali wrote: »
    What do you think 'financial instability' leads to?

    I thought that we were already in a period of financial instability?
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    I thought that we were already in a period of financial instability?

    I think at the moment things are 'uncertain' with a move to 'rather uncertain' pencilled in if Greece defaults.

    A Spanish default would be seen as 'increased volatility' I suspect. Revolution in Italy would be the start of financial instability.

    It's rather like the joke about the Australian security levels being raised from "No worries" to "She'll be 'right".
  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I love that joke.
    “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”
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