Interest Rates

redbuzzard

talexuser wrote: »

6.75 % grab on savings less than 85K, 9.9% above !! :eek:

I know where you got the idea...but if the savers are going to pay anyway we might as well stick with inflation.

The debtors need to pay as well... How about a debt levy of say half the inflation rate so they still gain and can't complain?

Glen_Clark

Yes, but
can the Government hold interest rates around 0.5% indefinately?

innovate

The japanese government has done it for almost 2 decades now. http://www.tradingeconomics.com/japan/interest-rate

Glen_Clark

innovate wrote: »

The japanese government has done it for almost 2 decades now. http://www.tradingeconomics.com/japan/interest-rate

Sure, but Japan doesn't have rampant inflation for a start
or a spiralling defecit like Britain
so Japan doesn't need to borrow so much?

redbuzzard

They've got the borrowing all right. They're working on the inflation.

Glen_Clark

redbuzzard wrote: »

They've got the borrowing all right. They're working on the inflation.

Well if they get Britains level of inflation, how long can they keep interest rates down?
There must come a point when their lenders will demand more interest if they feel the currency won't be worth so much when repayment is due?

In the case of Britain, the BoE excuse seems to be the £375 billion of freshly printed money is to buy Government Bonds, then the sellers of these bonds will invest the money in the British economy. Completely ignoring the obvious fact that the sellers can invest wherever in the world they like, and won't invest in Britain unless the Government makes it more investible.