BOE's weale warning over more QE, Tripple Dips, and Inflation targets

ILW

purch wrote: »

Certainly, complacency is our biggest enemy.

Not just an expectation that 0.5% Base Rate will continue for ever, but the biggest thing that we need to guard against is an expectancy that the economic situation will not get any better, or can only get worse and that we as individuals are powerless to change things.

The economy is a collection of people, and it is people who have the power to change things.

Are you suggesting that we all go and run up a ton of credit?

wotsthat

ILW wrote: »

Did hear one economist saying that the markets do not like that sort of action.

Not saying it's honest but governments can't overtly have a policy of inflating away debt whilst still trying to attract cheap funding.

That's why the politicians will be saying all the right things about paying back creditors etc. etc. whilst giving them an inflationary haircut at the same time.

ILW

wotsthat wrote: »

Not saying it's honest but governments can't overtly have a policy of inflating away debt whilst still trying to attract cheap funding.

That's why the politicians will be saying all the right things about paying back creditors etc. etc. whilst giving them an inflationary haircut at the same time.

True, but the markets take very little notice of politicians BS and tend to react to their actions.

purch

ILW wrote: »

Are you suggesting that we all go and run up a ton of credit?

Eh ??

The crass stupidity of that comment really doesn't warrant a response.

ILW

purch wrote: »

Eh ??

The crass stupidity of that comment really doesn't warrant a response.

It was a genuine question, you said that the answers were in all our hands and I was wondering what you would suggest.

daz378

are not most people try ing to pay off unsecured debt at the moment , due to uncertainty in the jobs market?


Outstanding unsecured (consumer credit) lending stood at £156 billion at the end of August 2012.

• This is down from £165 billion at the end of August 2011.

source credit action report, only when we have paid up will we start spending again

pop_gun

Many of us have predicted rates will be CUT not raised in future.

http://www.thisismoney.co.uk/money/news/article-1607881/Interest-rates-News-predictions.html

The above article suggests rates will go up to 1% in 2019. If the trend holds we won't see 5% interest rates until 2030.

I sometimes can't believe I'm not hedging against a collapse in the value of sterling, by buying precious metals. what will cause rampant inflation is if the QE going to the banks to buy their bad loans somehow reaches the average person. All hell will break loose at that point.

Gracchus_Babeuf

Graham_Devon wrote: »

Interesting article here, on what Martin Wheale thinks on the economy. You may agree or disagree!

Basically however, he believes that more QE may be too much QE. That we have to start taking inflation seriously, and show were serious, otherwise people can become complacent and take too many risks, and that the economy could be heading for a triple dip recession.

He also states that the looming fiscal cliff in America, rising prices, and the EU are our biggest risks right now.

Not sure if it's just me, but he seems to "get it"....for now. He appears to note how rising prices affect people, how interest rate complacency (sp) is a dangerous game to play, and how the populace see the BOE.

http://www.thisismoney.co.uk/money/news/article-2215882/INTERVIEW-Martin-Weale-casts-doubt-QE-sounds-alarm-inflation.html

I agree that inflation is a major threat.

All this scaremongering about deflation and lack of growth is hiding the fact that inflation is relatively high and may get higher again very soon. Inflation during periods of zero or minimal pay rises means potential disaster for the country. And the government's fiddling of the inflation figures doesn't hide this.

Gracchus_Babeuf

Generali wrote: »

Just to make the point, QE only really works if people think it's going to cause inflation. Part of the idea of it is to increase inflationary expectations.

Psychobabble.

Gracchus_Babeuf

daz378 wrote: »

are not most people try ing to pay off unsecured debt at the moment , due to uncertainty in the jobs market?



Outstanding unsecured (consumer credit) lending stood at £156 billion at the end of August 2012.

• This is down from £165 billion at the end of August 2011.

source credit action report, only when we have paid up will we start spending again

Not sure about that. I drive along the M4 most mornings and the majority of cars I see have 60, 61, 11 and 12 plates. They can't all be company cars.