Everything in place for a US rate rise

wotsthat

Thrugelmir wrote: »

Only a ticking bomb to those in financial difficulty. Defaulting isn't the end of the world as we know it. As is numerous singular events not a seismic crash. So the pain will be widely spread.

We' might be at cross purposes.

A 'ticking time bomb' is defined by the media and forumonics as a catastrophic event rather than an event which leas to some people having a rough time of it.

If you think things are getting better but some people are going to have a hard time of it we're on the same page but that's the story of human existence.

Crashy_Time

chucknorris wrote: »

No, I was a (mature) student back then, and I was still a year away from buying my first house, and more than a decade away from buying my first share. I was talking about the night when the base rate was going to rocket if we didn't leave the ERM (but we did leave), I'm surprised you didn't remember that, as it was looking very bleak for mortgagees.

Remember it well, the shocked group of government men on the steps of Downing St. was it? is very memorable, they were literally white with worry.

Crashy_Time

I guess as the property market and BTL is now the "economy" to most people we will see a shocked group of 118 BTL types standing outside in a street full of For Sale signs when the US finally pull the rate trigger?

purch

Crashy_Time wrote: »

Remember it well, the shocked group of government men on the steps of Downing St. was it? is very memorable, they were literally white with worry.

It was Shuffly Shoes Lamont, standing outside the Treasury on the evening of White Wednesday.

Black Friday in 1987 was the day after the Hurricane :eek:

purch

Generali wrote: »

FWIW, the BIS (often called the Central Bankers' central bank) has said that the Fed shouldn't let market reactions dent their desire to increase rates.

I think the markets will react quite poorly if the Federal Reserve do not follow through and increase the upper limit of the Funds target by a small amount.

Even if they set the target at 1/8 to 3/8 it would be a start.

Crashy_Time

purch wrote: »

It was Shuffly Shoes Lamont, standing outside the Treasury on the evening of White Wednesday.

Black Friday in 1987 was the day after the Hurricane :eek:

Ok. I remember the hurricane, didn`t connect Black Friday as being so close though. That is the nature of memory though I suppose?

MFW_ASAP

It will be interesting to see what the US would do if they lead with raising rates and no one else followed. Their currency would strengthen against everyone else's making imports cheap and exports expensive. A damage to their balance of payment figures might stop their rate rise dead in their tracks.

If you look at the rest of the world, China has only just dropped her rates, the UK is bumping along on the bottom with zero inflation, the EU is not much better. I can;t see much appetite for being quick to follow the US.

In a global economy, can one country really go it alone anymore?

michaels

The US economy although huge is actually relatively closed in comparison with most others as they make a lot of stuff so they care less about the currency than other countries.

However given that apart from the US we are seeing a global fall in demand I am more and more thinking that deflation may be the real risk and there is 'little' scope to cut interest rates to stop real rates from rising...

purch

The USD has been the global reserve currency for decades, so I think they are well used to having a relatively strong currency.

Thrugelmir

wotsthat wrote: »

If you think things are getting better but some people are going to have a hard time of it we're on the same page but that's the story of human existence.

Sometimes change is hardly noticeable as there's no single event to hit the headlines. Things are getting better but still a long way to go. Who knows what event might happen to blow everything off course. As a consequence plan for tomorrow on what one knows today.