Friday, Aug 17, 2007
Sliding pound and imported goods will fuel domestic inflation
The Telegraph: Investors shun sterling as credit implodes
"I'm afraid this may be worse than the 1998 sell-off because we're right at the top of the cycle, tipping down the hill. The only question is how fast we go down. This time the world no longer has imported disinflation from China, so it's harder for central banks to cut rates," he said.
Posted by in the delhi @ 06:37 AM (478 views) Add Comment
6 Comments
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1. tyrellcorporation said...
'Countries with big deficits, property bubbles, and excess household debt have suddenly fallen out of favour in the new mood of risk aversion, leaving Britain facing a chill.'
Woooah! This says it all really and reflects what all us bears have been saying for years.
2. dohousescrashinthewoods said...
Yep, the UK is bankrupt, everybody knew it - and now someone has blinked.
3. sold 2 rent 1 said...
"so it's harder for central banks to cut rates"
But they will eventually cut rates but lower rates are no good if lenders don't want to lend and borrowers don't want to borrow.
There is no avoiding the SGD (second great depression) now.
The Fed had to go to 1% last time and world responded with the biggest property bubble in history.
There is no asset class left to save the world economy.
4. sovietuk said...
Sterling is now drifting back to the level it was 6 months ago. What the MPC does at the next two meetings will have have a critical impact on the direction of Sterling and consequently inflation after that. The latest highly suspect magical "1.9%" inflation figure has also probably seriously damaged the credibility of the currency's value. Inflation figure fiddling might seem a short term solution for the Downing Street Polit Buro but it will have serious consequences for the long term value of the currency - 5 quid for a loaf of bread anyone??
5. Darren70 said...
Hey this all sounds very serious now.
Congrats to everyone on this site, looks like you were correct in most of your forecasts.
6. inbreda said...
Unfortunately not me Darren70 - I STR'd years ago!