UK Gilt yields turn negative

Glen_Clark

If you think savings rates are bad, look at bonds.
The latest round of money printing has driven 3-4 year UK bond yields down to -0.1%
http://www.bbc.co.uk/news/business-37031793

Pincher

Income generating asset, Yummy.
Useless cash nobody wants: what a nuisance.

Moving from deposit to buy equity?

The higher the price, the lower the yield.
Last one in gets the lowest yield.

Let's see, FTSE gets to 9000 because NOBODY dares to sell?

The really scary thing is: nobody wants to be in cash :eek:

Glen_Clark

Pincher wrote: »

The really scary thing is: nobody wants to be in cash :eek:

Exactly.
Whats going to happen when the recent crash in the £ follows through to inflation?
Traditionally the BoE raise interest rates to reduce inflation.
But since QE turned common sense on its head, they started massaging the inflation figures, and apparently want inflation to soft default on their debts, we are in uncharted waters and I don't know whats going to happen this time.

kidmugsy

Buy a little bit of Precious Metals.

ColdIron

Hush, you'll wake up DiggerUK

Pincher

kidmugsy wrote: »

Buy a little bit of Precious Metals.

Stop over in Dubai or Qatar next time I fly long haul, and pick up some 99.99% gold bars? How does it work through customs?

Was thinking about buying gold using the Amex 2.5% cashback, but that is out the window, unless there is a big uproar, so they delay it by a couple of months. I started the Amex for Christmas shopping, during the 5% period. More than likely, lots of people did the same, so we are all losing out this Christmas.

Stopping the benefit from 8th November, talk about lacking Christmas spirit.

coastline

Glen_Clark wrote: »

Exactly.
Whats going to happen when the recent crash in the £ follows through to inflation?
Traditionally the BoE raise interest rates to reduce inflation.
But since QE turned common sense on its head, they started massaging the inflation figures, and apparently want inflation to soft default on their debts, we are in uncharted waters and I don't know whats going to happen this time.

Base rates were a couple of points above inflation for years until the financial crisis.Savers could easily match or even beat the base rate in a decent cash account.

http://i.dailymail.co.uk/i/pix/2011/07/07/article-2012193-0CE7882400000578-469_468x350.jpg

https://www.economicshelp.org/wp-content/uploads/2015/03/inflation-interest-rates-600x472.png

The BOE target of 2% inflation hasn't been met in recent years but even if it did its hard to see a base rate rise to match..
The government will be loading up on new bonds with lower yields as some in recent years have been as high as 8%.

http://www.economicshelp.org/wp-content/uploads/blog-uploads/2012/07/uk-debt-interest-payments-total.png

Unless inflation picks up rapidly its hard to see much happening in the upward direction.
Rates took 30 years to peak and a similar time to fall..

https://qph.ec.quoracdn.net/main-qimg-adb7a29309d27a1816d2f5f1985c3544

ColdIron

Pincher wrote: »

Stop over in Dubai or Qatar next time I fly long haul, and pick up some 99.99% gold bars? How does it work through customs?

In essence investment gold bullion (bars) and coins are exempt from VAT, see HMRC VAT notice 701/21. However there is no such thing as cheap bullion as the price of gold is the same the world over. Gold jewellery can be cheap in Dubai, Bangkok etc because the labour costs are lower but this doesn't apply to bullion. You may as well purchase it from a reputable bullion/coin dealer in the UK as the premium will be about the same but with less aggravation/currency conversion issues and more security. Just my view

Thrugelmir

coastline wrote: »

Unless inflation picks up rapidly its hard to see much happening in the upward direction.

Imported inflation is currently on the horizon. As opposed to self generated wage inflation. Which means there's a storm blowing in. Wind might change direction though with China continuing to slow down. Chinese imports from Australia (commodities) are down 23% over past 12 months. A clear sign of weakening demand for Chinese exports.

talexuser

Pincher wrote: »

Was thinking about buying gold using the Amex 2.5% cashback, but that is out the window, unless there is a big uproar,

What's happening to amex cashback? I haven't heard anything from them yet.

Glen_Clark

coastline wrote: »

Base rates were a couple of points above inflation for years until the financial crisis.Savers could easily match or even beat the base rate in a decent cash account.

http://i.dailymail.co.uk/i/pix/2011/07/07/article-2012193-0CE7882400000578-469_468x350.jpg

https://www.economicshelp.org/wp-content/uploads/2015/03/inflation-interest-rates-600x472.png

The BOE target of 2% inflation hasn't been met in recent years but even if it did its hard to see a base rate rise to match..
The government will be loading up on new bonds with lower yields as some in recent years have been as high as 8%.

http://www.economicshelp.org/wp-content/uploads/blog-uploads/2012/07/uk-debt-interest-payments-total.png

Unless inflation picks up rapidly its hard to see much happening in the upward direction.
Rates took 30 years to peak and a similar time to fall..

https://qph.ec.quoracdn.net/main-qimg-adb7a29309d27a1816d2f5f1985c3544

How can you take their inflation statistics seriously when they ignore house prices?