Wednesday, Feb 13, 2008
Have the Swedes got it right?
BBC: Sweden surprises with rate rise
"Sweden's central bank has raised interest rates by a quarter of a percentage point to 4.25%". "The Riksbank said the move will help bring down inflation, which is running at 3.5%, well above the target of 2%".
Posted by alan @ 01:48 PM (534 views) Add Comment
8 Comments
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1. jack c said...
Australia also raised rates by 25 basis points on 06/02/2008 for same reasons
2. An Bearin Bui said...
With inflation at 3.5%, they should have raised IRs some time ago and more than just .25%! 3.5% is far too high.
3. paul said...
How long can the BBC go on acting all surprised when first world economies do what they're meant to do (as opposed to running and hiding behind rate cuts) in the face of tightening credit conditions?
4. Fed Up said...
It also shows that Sweden, like Denmark and *unlike* Ireland and Spain of course, was wise to keep out of the Euro
5. planning4acrash said...
CPI is a rubbish measure, but global economics as about relativity, and our CPI is better than sweden,better than australia,better than the US.Lets face it. Uk ir's are low, but only aus and nz are higher.HousIng is down, but we may do well in long term.
6. planning4acrash said...
don't worry, i have not yet become a bull! Those times have not yet come to pass, but my recent good fortune has opened me to positivity about the future. The crash is here, all that remains is to ask how deep 4 the crash, and when will the bull return.
7. it_is_going_with_a_bang said...
A central bank with a sense of responsibility. A refreshing change.
Lets face it 4.25% is not high and neither is 5.25%. It's only high if people have spent huge amounts of money at 4% rates believing that to be the "forever rate".
The perception that sheeple have been sold of how the economy can realistically be run over the log term is what is wrong.
8. planning4acrash said...
I reckon we will see more of this. Sweden is at the beginning of a trend that others will follow, including the USA. They will eventually need to give some shock therapy to avoid stagflation. We have had higher IR's than all of these guys for a long time, maybe we will have lower IR's at some point in the next 5yrs? Even in relation to the USA at some point, because they are in a shocking state, and the new administration may well need to do a Thatcher once the inflationary results of low IR's feed through. So I am actually bullish about the US dollar at the point that they first signal IR rises, which I think may be sooner than many would think, and inflation takes long to stamp out, so, gold may have another wave up, but the next place for real hedging, after the gold run, will be the US dollar. Or do some people here think that the Yuan is where its at and that the dollar's fall is structural? I guess it depends to what extent changes seen now are structural or cyclical? Any ideas?