Interest rates rising

ratechaser

bowlhead99 said:

EdGasketTheSecond said:

Yes them too. In fact nearly all fiat currencies are in a race to debase.

I know you have a bee in your bonnet about the topic, but presumably, you could drop your use of the word 'fiat' every time you say 'currency', because there aren't really such things as non-fiat currencies since the world developed a modern financial structure to support its economic growth. So you just mean 'currencies'.

Ah, but what about Krugerrands? Or WeRe cheques?

Or Flanian Pobble Beads for that matter 

jbrassy

Bitcoin and other cryptocurrencies are not fiat currencies, so non-fiat currencies do exist.

As for interest rates going up, it's going to take a sustained period of economic growth and possibly rising inflation before they start going up. Even then, they are unlikely to reach pre-2008 levels. Not long ago the Bank of England started publishing a figure known as R* (or R-star). This figure is supposed to represent "the level of interest rates set by a central bank [i.e. the Bank of England] that will keep inflation and growth rates stable when the economy is running at full capacity"

When the Bank first published these figures in July 2018, they estimated R* at between 2-3%. Therefore, do not expect rates to increase above 3% in the next few years, possibly the next decade. Not sure what this R* figure is today, but would assume it has declined since coronavirus as productivity in the economy has likely declined since then.

Further reading:
https://uk.reuters.com/article/uk-britain-boe-rstar-analysis/analysis-r-star-in-the-limelight-as-bank-of-england-opens-up-on-rates-idUKKBN1KH1MO
Box 6 of: https://www.bankofengland.co.uk/-/media/boe/files/inflation-report/2018/august/inflation-report-august-2018.pdf?la=en&hash=07356C865A7416716C85C54FD7F752BF9DF0E19B

MinuteNoodles

Afternoon said:

Hi
I was wondering if anyone could give me their thoughts on what would need to happen in order for interest rates to rise again? 

That's simple. Government debt to drop to next to nought and a few successive years of a pretty balanced budget. Not likely given that a few hundred billion has been added due to CV-19 and tax receipts have fallen through the floor due to lockdown.

MaxiRobriguez

brassy said:

Bitcoin and other cryptocurrencies are not fiat currencies, so non-fiat currencies do exist.

Bitcoin and other cryptocurrencies are not fiat currencies no, but they are as much of a "non-fiat currency" as precious artwork or vintage cars are. 

polymaff

Afternoon said:

There has to be a balance for savers and people in debt. People who have been in debt have benefited from these low rates so in theory should have sorted their position out by now. 

Oh, really?

So make alcoholic drinks cheap and that'll sort out the alcoholics' problems...

polymaff

Gary1984 said:

But with the independence of the Bank of England would they not need to raise interest rates to stop inflation getting too high if needed? I accept the government would rather they didn't but how much can they lean on them?

As much as is happening in the "science-led" approach to Covid19.  Just fine and dandy - until they disagree.

EdGasketTheSecond

bowlhead99 said:

EdGasketTheSecond said:

Yes them too. In fact nearly all fiat currencies are in a race to debase.

I know you have a bee in your bonnet about the topic, but presumably, you could drop your use of the word 'fiat' every time you say 'currency', because there aren't really such things as non-fiat currencies since the world developed a modern financial structure to support its economic growth. So you just mean 'currencies'.

What Is Fiat Currency? Fiat Currency is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

Gold and Silver are non-fiat money as enschrined in the US Constitution which is now sadly ignored:

"The constitution in Article I, section 10 reads "No state shall... coin money, emit bills of credit, make any thing but gold and silver a tender in payment of debts..." This means that the only constitutionally valid forms of money are gold or silver coin."

coyrls

EdGasketTheSecond said:

bowlhead99 said:

EdGasketTheSecond said:

Yes them too. In fact nearly all fiat currencies are in a race to debase.

I know you have a bee in your bonnet about the topic, but presumably, you could drop your use of the word 'fiat' every time you say 'currency', because there aren't really such things as non-fiat currencies since the world developed a modern financial structure to support its economic growth. So you just mean 'currencies'.

What Is Fiat Currency? Fiat Currency is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

Gold and Silver are non-fiat money as enschrined in the US Constitution which is now sadly ignored:

"The constitution in Article I, section 10 reads "No state shall... coin money, emit bills of credit, make any thing but gold and silver a tender in payment of debts..." This means that the only constitutionally valid forms of money are gold or silver coin."

It's not ignored sadly or otherwise, as the restriction applies to States, not Congress.

EdGasketTheSecond

coyrls said:

EdGasketTheSecond said:

bowlhead99 said:

EdGasketTheSecond said:

Yes them too. In fact nearly all fiat currencies are in a race to debase.

I know you have a bee in your bonnet about the topic, but presumably, you could drop your use of the word 'fiat' every time you say 'currency', because there aren't really such things as non-fiat currencies since the world developed a modern financial structure to support its economic growth. So you just mean 'currencies'.

What Is Fiat Currency? Fiat Currency is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

Gold and Silver are non-fiat money as enschrined in the US Constitution which is now sadly ignored:

"The constitution in Article I, section 10 reads "No state shall... coin money, emit bills of credit, make any thing but gold and silver a tender in payment of debts..." This means that the only constitutionally valid forms of money are gold or silver coin."

It's not ignored sadly or otherwise, as the restriction applies to States, not Congress.

The meaning is clear and was made to ensure the prosperity of the United States and not its destruction which is happening now under the FED printing presses (well actually they just dial up currency on a computer but you get the message).

coyrls

EdGasketTheSecond said:

coyrls said:

EdGasketTheSecond said:

bowlhead99 said:

EdGasketTheSecond said:

Yes them too. In fact nearly all fiat currencies are in a race to debase.

I know you have a bee in your bonnet about the topic, but presumably, you could drop your use of the word 'fiat' every time you say 'currency', because there aren't really such things as non-fiat currencies since the world developed a modern financial structure to support its economic growth. So you just mean 'currencies'.

What Is Fiat Currency? Fiat Currency is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

Gold and Silver are non-fiat money as enschrined in the US Constitution which is now sadly ignored:

"The constitution in Article I, section 10 reads "No state shall... coin money, emit bills of credit, make any thing but gold and silver a tender in payment of debts..." This means that the only constitutionally valid forms of money are gold or silver coin."

It's not ignored sadly or otherwise, as the restriction applies to States, not Congress.

The meaning is clear and was made to ensure the prosperity of the United States and not its destruction which is happening now under the FED printing presses (well actually they just dial up currency on a computer but you get the message).

Not at all, it applies to individual states, not to the federal government.  Do you really think that in a society as litigious as the US that the government could get away with ignoring the constitution?