Interest Rates - BoE should cut them or the governer should go!

pickles110564

SuperV wrote: »

Can he assure money markets what will be BoE next prediction and next move? Answer is clear - no!

He will make BOE Base Rate 1% by Feb.

SuperV

pickles110564 wrote: »

He will make BOE Base Rate 1% by Feb.

And that is the point!

In September he said that the economy has to weaken more in order to fight inflation.

He doesn't have a vision how to help economy. He will blindly cut the rates hoping for the best. But, now, that is only one part of the therapy. He should cut his salary 50% and impose similar cuts for all bank officials as a good example for the whole Government. He should end final salary pension for all BoE employees. That will make borrowing much smaller in short and long term.

SuperV

The Treasury cut VAT to 15%. That will affect inflation in December - drop of between 1.5% to 2%.

With other deflation drivers inflation will drop below 2% and probably below 1%.

BoE interest rate will go down to 0.5%.

Looking at the banks with their SVR still above 4%, they charge a huge premium. And a lot of people are caught on SVRs.

SuperV

According to some :Britain on the brink of an economic depression, say experts - http://www.telegraph.co.uk/finance/financetopics/recession/4326894/Britain-on-the-brink-of-an-economic-depression-say-experts.html.

And again, as many times as needed, the solution is there.

Cut Government and para-Government expenses. Whoever believe they should earn more, they should try their luck.

Good luck!

At the moment the Government and all para-Government services cost tooooooo much!

SuperV

Finally something sensible from Mr King - warning against further increases in spending.

The right moment to cut spending in Government! Military & Benefits budget, civil servants salaries, golden-plated pensions, etc.

Either a cut or huge inflation. The sooner, the better!

SuperV wrote: »

And again, as many times as needed, the solution is there.

Cut Government and para-Government expenses. Whoever believe they should earn more, they should try their luck.

Good luck!

At the moment the Government and all para-Government services cost tooooooo much!

SuperV

S&P warns Britain it could lose top credit rating over debt level

http://www.ft.com/cms/s/0/9423b54a-4668-11de-803f-00144feabdc0.html

So, unless there is a significant cut in the next few months following will probably happen:
1) British debt will become more expensive.
2) Number of potential investors will drop (some have to buy AAA only).
3) Sterling will fall again, maybe below the parity against euro.
4) That will increase inflation.
5) As the high paid professionals are the most mobile part of work force they will move to more "exciting" markets.
6) The UK will end up with the economy like Slovakian and similar wages.

SuperV wrote: »

Finally something sensible from Mr King - warning against further increases in spending.

The right moment to cut spending in Government! Military & Benefits budget, civil servants salaries, golden-plated pensions, etc.

Either a cut or huge inflation. The sooner, the better!

Ash77

read superv's posts on here and hats off. called it well and better than those getting paid a fortune to get it wrong. some common sense ideas too about fixing the swelling deficit/broken britain.

with nearly 1m 18-24y/o's unemployed and with possibly the highest rate of teen pregnancies in europe,
i would advocate no social housing to unemployed under 25's. they should stay at home with their parents who may even live off the taxpayer too.

the carrot could be social housing going to low income working families who can be charged low rents and eventually buy at good if not stupidly low prices.

they've spent a fortune on improving sex education etc and have failed. time for brave stick, fair carrot to correct the underclass society.
watch teen/unemployed pregnancies plummet when theres no free house with all the other freebies thrown in.

tax evaders need sorting too, its always the middle that pays for the scroungers & scammers, though you can't just blame the selfish individual for taking advantage of a shambolic and unfair system.

if we can have more skilled and less dependent young people, perhaps we can get the private and wealth creating sector growing again one day, with more domestic businesses starting up and more foreign investment flooding in to utilise a skilled workforce.

doncaster alone is spending £300m on upgrading council houses where residents choose from catalogues as to which new lounge, kitchen, furniture etc they want. they will be fully insulated with the latest boilers so their houses will be better than many working peoples, for a while at least.

incentivising people to have kids on the taxpayer is crazy, even more so when its likely that those kids will follow suit. spend it on education instead and stop hammering working people.

will never happen btw but the economy is in such a bad way that radical changes are needed. we havent even begun to start paying for the waste that has gone on. it could take decades to balance the books and carrying on as we are will only make it worse.

maveli

All those who ridiculed SuperV should come out and apologise especially those with a "I am a mortgage advisor/Financial advisor" signature. Once again they proved that it is not worth taking any advise from them.

dunstonh

maveli wrote: »

All those who ridiculed SuperV should come out and apologise especially those with a "I am a mortgage advisor/Financial advisor" signature. Once again they proved that it is not worth taking any advise from them.

Why should anyone apologise to him? At the time of posting, the information given in the responses was correct. To have done what he wanted at the time of posting was not necessary. As time moved on then the economic scenerio changed (a number of times) and then required a different action to that which was required before.

I only made a few posts on this thread and I am the only financial adviser that posted on it. I did not ridicule the OP and dont know why you see the need for me to personally apologise.

Personally, I gave up on the thread because it became a bit tedious. It appears most did the same.


note. meant to press quote not thanks.

SuperV

dunstonh wrote: »

Why should anyone apologise to him? At the time of posting, the information given in the responses was correct. To have done what he wanted at the time of posting was not necessary. As time moved on then the economic scenario changed (a number of times) and then required a different action to that which was required before.

Thank you - no need to apologies at all. What you said is a problem - the information looked correct, but was not correct as we all know - now. Sorry, it was at least in my opinion obvious.

Unfortunately again, people in charge shared your opinion and they should knew better (at least they were and are better paid). For example, as a company owner or director making ONE wrong decision could mean losing a house or being banned for 5 years to become director in any other company. Moral hazard of not being punished for a wrong decision led them to let markets do their job.

And they were wrong.

Efficient market theory doesn't say in which period will the market discover the right price, so it is up to regulators to prevent huge swings.

For example, regulators let some (banks ...) to make the bubble knowing that they would be able to go after all assets of the borrowers if the house market turns bad. So, it is not only 5, 10, 15 or 20% they take as a buffer against a loss but much more (small difference between the UK and the USA mortgage market)!

FSA allowed them that! That is a moral hazard on such unprecedented scale that we can just wonder why anyone in a position of a regulator allowed such asymmetric responsibility.