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Base rate to rise in 2013?

123468

Comments

  • padington
    padington Posts: 3,121 Forumite
    HAMISH_MCTAVISH wrote: »
    :rotfl:

    The money supply (M4) shrank by £128 bn in the two years to Oct 2012.

    And that's AFTER "the BOE added billions of £s to the currency supply".

    The currency supply is decreasing, not increasing, you prize nitwit.

    Is the international money supply decreasing though and if not why don't we have deflation ?
    Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.
  • PaulF81
    PaulF81 Posts: 1,727 Forumite
    There are too many people on the planet, all wanting the same stuff.

    It's got nothing to do with money supply and everything to do with the human race being akin to a plague of rats.
  • padington
    padington Posts: 3,121 Forumite
    PaulF81 wrote: »
    There are too many people on the planet, all wanting the same stuff.

    It's got nothing to do with money supply and everything to do with the human race being akin to a plague of rats.

    But if there's no new money, how do these new people have the buying power to disturb the market or even feed themselves ?
    Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.
  • padington
    padington Posts: 3,121 Forumite
    edited 2 January 2013 at 11:30PM
    Anyone got an answer regarding the above ?
    Proudly voted remain. A global union of countries is the only way to commit global capital to the rule of law.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    padington wrote: »
    But if there's no new money, how do these new people have the buying power to disturb the market or even feed themselves ?

    The majority (of the Western world) will have to accept a smaller slice of the cake.
  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    padington wrote: »
    Is the international money supply decreasing though and if not why don't we have deflation ?

    There are primarily two types of inflation.

    1. Cost Push Inflation. Where externalities such as supply shortages or exchange rate fluctuations drive up the cost, which then feeds through into inflation.

    2. Demand Pull Inflation. Where too much money competes for too few goods, and prices rise until equilibrium is restored.

    You are confusing the two, by assuming that UK inflation is demand-pull and caused by increasing money supply, whereas reality is that the UK money supply is shrinking.
    “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”
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    padington wrote: »
    Is the international money supply decreasing though and if not why don't we have deflation ?

    The USA, UK and Japan are printing money ..........

    So deflation is being held at bay.
  • globalds
    globalds Posts: 9,431 Forumite
    So if we all keep overpaying our mortgages ...The money supply (M4) keeps shrinking ..And interest rates stay low as we are not out of the woods ..Meaning we have spare cash to ...mmmm ...Keep overpaying our mortgages :D
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    globalds wrote: »
    So if we all keep overpaying our mortgages ...The money supply (M4) keeps shrinking ..And interest rates stay low as we are not out of the woods ..Meaning we have spare cash to ...mmmm ...Keep overpaying our mortgages :D

    Net mortgage borrowing has increased since 2008. So there's been no credit squeeze as yet.
  • globalds
    globalds Posts: 9,431 Forumite
    My gut tells me this rather odd period could change pretty quickly ..It started from an out of control situation ..
    And I would say nothing I have seen tells me it is yet under any real control..Or maybe kicking a land mine down the road is a solution ?

    I am overpaying ..But not so worried about single handedly holding down rates ..Just clearing the mountain while my shovel seems to be picking up much more than it did before.
This discussion has been closed.
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