SAGA's position on Interest Rates debunked

Graham_Devon

julieq wrote: »

But you're claiming spending is reducing Graham. Look, this is what you said:

"This reduces spending, and therefore reduces the amount of money circulating in local business."

You didn't say anything about consumption.

I think you probably ought to trot out those statistics. You seem to be a bit muddled.

Let's I have £100 each month.

My gas bill is usually £20 a month. However, gas prices have gone up and I've also used a bit more. It costs me £22 this month.

I've spent more, AND consumed more.

However, I haven't consumed anything different, and haven't been out buying new items. Just means I have less left over from the £100.

You and Hamish are in harmony once again merely assuming spending more and consuming more means increased spending on new items. It doesn't. And on a thread which Hamish tries to suggest the SAGA theory is debunked, purely based on the fact there is no hard physicall statistics in front of him handed on a plate, the hypocrisy is mildly amusing.

julieq

So let's go back to what you said again:

"This reduces spending, and therefore reduces the amount of money circulating in local business. "

And now you're claiming spending and consumption is going up.

It's a bit muddled Graham. What was the point exactly?

Fact is that if people are spending more of their savings, more money is going into the economy. It's irrelevant where the spend goes, it still ends up circulating one way or another. So it neither reduces spending nor reduces the amount in circulation. On the other hand it does increase spending and consumption. So it seems to me you're now disagreeing with your first comment and agreeing with Hamish?

Graham_Devon

julieq wrote: »

So let's go back to what you said again:

"This reduces spending, and therefore reduces the amount of money circulating in local business. "

And now you're claiming spending and consumption is going up.

It's a bit muddled Graham. What was the point exactly?

Fact is that if people are spending more of their savings, more money is going into the economy. It's irrelevant where the spend goes, it still ends up circulating one way or another. So it neither reduces spending nor reduces the amount in circulation. On the other hand it does increase spending and consumption. So it seems to me you're now disagreeing with your first comment and agreeing with Hamish?

Julie get a grip of yourself.

It's not muddled at all. More money goes on the same things.

You are doing a fine job to try and muddle it up, but you aint doing a fine job of hiding it.

The context of what myself and Hamish are talking about is the difference. You know that, Hamish knows that, I know that. So why are you continuing to play the "I'm dumb, I can't figure out what you mean" card?

Following the route you are going down, inflation at 150% would be great, as we'd all be spending more in the economy....which (relating to the context this thread set out in)....would also have you suggesting we are actually all doing rather well as were spending more.

The more spent on gas (for example), the less circulating the local economy on a fixed income. It's very basic, and very easy to figure out.

As I say, get a grip.

julieq

Graham, if you spend more money on gas, more money is circulating in the economy even on a fixed income.

It's really very simple.

I THINK that what you're on about is that the level of discretionary spending may reduce as fixed costs increase. That may be true (although the evidence is that real terms spending is increasing), but it's irrelevant. The money is still spent, and it still circulates. It doesn't matter if it's more on gas and less on lace doylies, it's still circulating - money paid in gas bills finds its way to salaries and spending and so on and thereby into the economy. Blathering about imaginary inflation rates is irrelevant and a silly straw man argument, inflation is what it is and there is a real terms increase.

Graham_Devon

julieq wrote: »

Graham, if you spend more money on gas, more money is circulating in the economy even on a fixed income.

It's really very simple.

And absolutely nothing to do with the context Hamish was laying out.

You have won the argument on semantics and pedantry. Well done.

HAMISH_MCTAVISH

Graham_Devon wrote: »

semantics and pedantry.

Holy cow that's a bit rich coming from you. :eek:

robmatic

It must suck to be a pensioner and be having to rely on an income which only rises in line with inflation.

ILW

julieq wrote: »

Graham, if you spend more money on gas, more money is circulating in the economy even on a fixed income.

It's really very simple.

I THINK that what you're on about is that the level of discretionary spending may reduce as fixed costs increase. That may be true (although the evidence is that real terms spending is increasing), but it's irrelevant. The money is still spent, and it still circulates. It doesn't matter if it's more on gas and less on lace doylies, it's still circulating - money paid in gas bills finds its way to salaries and spending and so on and thereby into the economy. Blathering about imaginary inflation rates is irrelevant and a silly straw man argument, inflation is what it is and there is a real terms increase.

Surely then, the same logic could be applied to raising interest rates? If people are spending more on their mortgage it is an increase in real terms spending, plus savers will have more, so a win win situation. 20% base rate would save the economy.

Graham_Devon

ILW wrote: »

Surely then, the same logic could be applied to raising interest rates? If people are spending more on their mortgage it is an increase in real terms spending, plus savers will have more, so a win win situation. 20% base rate would save the economy.

Of course it wouldnt, and Julie would be one of the first shouting about the ignorance of the BOE for setting absurd interest rates.

This was nothing more than a pedance argument to relieve my post of the context it was written in. Julie did that, but after going down the same route as you, HAD to agree with my stance. Even Hamish stopped thanking at that point.

Julie will now leave the thread as she's again, shot herself in the foot chasing the semantics argument and left herself open to exactly what you have stated. It's pointless.

purch

HAMISH_MCTAVISH wrote: »

SAGA's position on Interest Rates debunked

I wasn't aware that SAGA had a position on any subject worth listening to, let alone "debunking".

However, I did find their article on growing snowdrops highly relevant, although I disagree with the point about not buying bulbs in the autumn.

http://www.saga.co.uk/lifestyle/gardening/masterclass/snowdrops.aspx