Wednesday, Aug 12, 2009
Any trick these sneaky BOE can think of to prop up spending..
Yahoo: Bank to look at cutting rate it pays banks on reserves
The Bank of England said on Wednesday it might consider cutting the interest rate it pays to banks holding deposits with it, in a bid to encourage them to lend on the extra money it is pumping into the economy.
Asked whether the central bank could follow Sweden's Riksbank in offering negative interest rates on central bank reserves, Bank Governor Mervyn King did not rule it out.
Posted by mark @ 02:57 PM (1276 views) Add Comment
30 Comments
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1. mark said...
anyone ever noticed what BOE stands for
B*st*rds Of England....
Browns Of England
etc
any more suggestions
as clearly they are the idiots who work for browns bunch of hissy tescos promoting pimps
2. hpwatcher said...
There is absolutely no end to the lunacy of these fools. Spending & lending got us into this mess, and these idiots want to force people to spend more...........the thinking is to keep the boom going at all costs, rather than look at the real problem, which is lack of ''real'' wealth creation.
Performing fancy accounting tricks simply isn't the answer.
3. down wave said...
The BOE wants to lend more and more money to the ever rising numbers of unemployed that will not be able to repay the money, thus sinking the UK whole ship. Some brave person should paint Plimsoll lines on the bow's of the BOE, then everyone can see how overloaded it is. They have all dropped a beam, Barking Mad.
4. mark wadsworth said...
They're completely nuts.
If I offered to take deposits at 0% interest or even negative, who'd deposit money with me? Answer, nobody. Ergo it won't happen. Ergo it won't have any impact on anything whatsoever - neither good nor bad.
If the BoE offered to LEND at zero or negative interest rates, that would be a slightly different matter (but wouldn't have much impact either).
5. mander said...
I think hpwatcher said it all...
But I am under the impression that both BoE and Federal Reserve are trying desperately to kick start inflation because of their international trade negative balances.
6. Eagle said...
Cooking the books
7. alan said...
Here's the plan:
1. Tell the sheeple that house prices are rising again, so BUY NOW.
2. Encourage the banks to lend more money by cutting rate.
3. Watch house prices go UP.
4. Ridicule anyone talking about balancing our economy.
5. Claim that NuLabour solved our economic problems AGAIN.
6. Win election.
What can go wrong.....?
8. icarus said...
@ mark w - it's only recently that the Fed started paying interest on the reserves that commercial banks are REQUIRED (a % of the sum deposited in that bank) to deposit with the Fed. This was in response to Bernanke's request to enable him to pump more funds into the banking system without lowering the policy rate. Some objected on the grounds that the Fed was using taxpayers' money to pay interest on reserves that banks maintain for their own private profit - since reserves are necessary for a bank to create loans (deposits x 10) and collect interest on them.
9. refusetobuy said...
Erm... Why wouldn't banks invest overseas?
10. Yoss said...
Good job the BOE final salary pension fund put shed loads of cash into inflation adjusted investments....It's almost like they saw it coming!
11. 51ck-6-51x said...
MW said "If I offered to take deposits at 0% interest or even negative, who'd deposit money with me? Answer, nobody. Ergo it won't happen. Ergo it won't have any impact on anything whatsoever - neither good nor bad."
- this misses the point, the banks already have deposits with the BoE - the point is to encourage them to not hoard there.
icarus said, "it's only recently that..."
- indeed, this does not seem right, and neither does charging them for the privilege of depositing their required reserves - or even on required + some extra "preferred reserve" really. N.B. reserves are not "necessary" for a bank to create loans - e.g. they take a deposit of 1 and lend out 0.9 keeping 0.1 on reserve when they could have lent it all and kept nothing. The steady-state gearing in the first case is 10 times but in the latter is infinite ( although the steady state here is unreachable, and hence would only approach the bound ).
refusetobuy said, "why wouldn't banks invest overseas"
- well they probably would, but they would be purchasing assets in sterling.
My opinion: This is a pretty hairy area and the deposit & repo rate control are amongst the myriad of reasons central banking needs addressing - it is, after all, a monopoly on money.
12. hpwatcher said...
sometimes i think, banks only chose to lend money in order to enslave people.
13. 51ck-6-51x said...
hpwatcher
- Don't you mean governments keep the central banking monopoly in order to enslave it's citizens?
( The banks lend in order to profit pure and simple, the enslavement is a side-effect. )
14. mystie010 said...
hpwatcher (Post 10) You are absolutely right! A lot of people want to have their own rooves over their heads. The more they are forced to borrow to achieve this aim the harder they need to work and the more money they need to earn to keep that roof. The government of course is more than happy to tax this money that homeowners and borrowers need to earn. It is about time everyone woke up to the fact that high house prices are a ruse created from above (goverment/powers that be etc.) to force people to work in order to keep a roof over their head. The government are using housebuyers as their own personal ATM's. If you remove the fear of losing your home when you are no longer earning or you reduce house prices down to a level whereby people can easily afford to buy them outright; then you are also reducing to a large extent a need to continue go out and work; unless of course you hike up the price of something else for example.
By forcing us to work and keep on working to provide or maintain a roof over our heads the Goverment is ensuring that we continue to pay their taxes. I just wish that everyone would wake up to this so that perhaps collectively we could change the system.
15. Mrflibble said...
@12. mystie010
Well summed up. It's not just about working any job either as this house ownership dream now seems to require a career job to keep it afloat. The trouble is, the more you earn the more you loose in taxes and job related expenses. My career offers me work too far South for me to afford to live, therefore I'm constantly kept in the long commute game by living further North to try and achieve a decent standard of living, wasting even more money in the process. For a good few years now I've realized that I was always destined to loose in this rigged game. The game is to keep the goal post just out of reach, but close enough for you to believe that if you work and save hard you will score.
16. mrflibble said...
@12. mystie010
Well summed up. It's not just about working any job either as this house ownership dream now seems to require a career job to keep it afloat. The trouble is, the more you earn the more you loose in taxes and job related expenses. My career offers me work too far South for me to afford to live, therefore I'm constantly kept in the long commute game by living further North to try and achieve a decent standard of living, wasting even more money in the process. For a good few years now I've realized that I was always destined to loose in this rigged game. The game is to keep the goal post just out of reach, but close enough for you to believe that if you work and save hard you will score.
17. down wave said...
11. 51ck-6-51x said...hpwatcher
- Don't you mean governments keep the central banking monopoly in order to enslave it's citizens?
( The banks lend in order to profit pure and simple, the enslavement is a side-effect. )
Reply: Slaves were used for profit pure and simple, its not colateral or iatrogenic. It is slavery, the NU Labour way, Thacher's way and Cameron's way. What is the point of power unless the power holders enslave? The Power Holders are all at Negative 3 and 4 on the Scale of Emotional Health:-
Negative - 3. Covert Manipulation, Concealed Hostility, Clandestine
Malevolency
• This is probably the most populated chronic emotional level in these
times.
• Problem: diffi cult to immediately assess that they are in this category;
only time reveals this to individuals higher on the scale as their game
strategy unfolds.
• Those in chronic grief and apathy ( - 4 and - 5), never comprehend their
strategies (SHEEPLE?).
• Always present a cheerful facade, often with a nervous laugh and constant
smile.
• Appear calm, pleasant and resourceful.
• Seem to be sympathetically or morally concerned in politely asking
probing personal questions about you, your work, your relationships,
your sex life, your politics or your religion (NU LABOUR SPIES?).
• Their anger remains invisible, yet they are petrifi ed of anyone in anger.
• Jealous and extremely dangerous.
• Cruel cowards.
• Manipulative, they engage in gossip readily but have no qualm in covertly
twisting facts around, to knife into the back whenever, wherever
and to whomever they can.
• When confronted, they change the subject to move away from the point
and are always rewriting history or changing the truth about past events
to suit their current position. They will do and say anything to avoid
exposure.
• Through their appearance, word, propaganda or advertising they present
themselves, their services or products as being ‘so nice, so charming, so
condescending and so helpful’.
• For objectives that they are too lazy or fearful to undertake themselves,
they covertly manipulate and subjugate individuals at chronic -4, -5 and
-2 to do their bidding and dirty work.
• Their targets are any individual, families, groups, companies or nations
that they consider high on the scale (e.g.+3’s; +4’s etc.), attempting to
bring them down to chronic appeasement, grief and apathy (- 4 and - 5
levels). They would like everyone on the planet at this level so that they
can feel power.
• They have little time for children unless they can use them as an introduction
or a weapon for manipulation towards their strategy of introverting
others down to -3 and minus 4.
• Their unstated aim is to cause ruin, discredit achievements and split up
relationships.
• At this they can be very successful and gloat when their victims go
down into the lower chronic levels of - 4 and -5.
• Males at this level subconsciously know their fearful limitations. They
can be slothful, but have a need to control and suppress women down
to the -4 and -5 levels so that they can feel secure in their sexuality, (as
also happens in males at -1 and -2).
• Males at this level occupying infl uential or powerful offi ces can instigate
acts of terrorism and war.
• You cannot trust anyone at this level with your health, your money, your
reputation, your safety, your husband, your wife, your children, your
business, your company, your country, or this planet.
Negative - 2. Anger, Aggression, Delinquency, Insurgency
• Individuals at this chronic level are consumed with animosity and are
furious.
• They dominate and intimidate others into submission and obedience (GORDON BROWN?)
• They blame everyone else for their problems.
• They collect grudges to justify their anger and dump them on anyone or
anything that passes their way.
• They destroy property, social conveniences and lives.
• Everyone they meet is wrong or obstructing their ambitions.
• Expressing no kindness, no consideration, being blatantly dishonest and
disloyal, they lie, use intimidation and ambiguity to destroy creativity
and satisfaction.
• They cause sabotage by deliberately instigating situations or circumstances
where others will fail; afterwards they accept no blame, excuse
or explanation.
• They handle children by tyranny, sometimes with brutal punishment to
force them, by means of pain, into what they want.
• Not being interested in any viewpoints unless it reinforces their position,
they do not listen and continually interrupt others’ discussions.
18. paul said...
I think Mervyn King is trying to scare people into spending their savings to keep the housing boom going. He has made it amply clear in recent years that it is a fixed determination of the BoE to get house prices rising again, and sustainability, quite frankly takes a back seat.
Why? I've no idea why our central bank has decided that high houise prices are more important than a sustainable economy but as I've always said the majority of policymakers are baby boomers and they do have the most to lose.
Anyway. The answer to negative interest rates is really simple for savers. If they had - say - interest rates of -5%, it may well be cost effective to remove your cash and store it securely somewhere where they'll do it more cheaply. And with an opportunity like that I think there would be quite a number of facilities that would.
Alternatively, move it into another stable foreign currency. If the transaction cost is less than the 5% you'd be better off if the currency is reasonably stable.
19. hpwatcher said...
You are absolutely right! A lot of people want to have their own rooves over their heads. The more they are forced to borrow to achieve this aim the harder they need to work and the more money they need to earn to keep that roof. The government of course is more than happy to tax this money that homeowners and borrowers need to earn. It is about time everyone woke up to the fact that high house prices are a ruse created from above (goverment/powers that be etc.) to force people to work in order to keep a roof over their head. The government are using housebuyers as their own personal ATM's. If you remove the fear of losing your home when you are no longer earning or you reduce house prices down to a level whereby people can easily afford to buy them outright; then you are also reducing to a large extent a need to continue go out and work; unless of course you hike up the price of something else for example.
Yup. It's all about state control. The people of this country have been well and truly stitched up....
20. hpwatcher said...
I think Mervyn King is trying to scare people into spending their savings to keep the housing boom going. He has made it amply clear in recent years that it is a fixed determination of the BoE to get house prices rising again, and sustainability, quite frankly takes a back seat.
Yes, and they are spending too....the fools...
21. down wave said...
Should the BOE go this way, Buy a fire-poof safe and withdraw your cash, . Make sure your safe is around 3CWT, key and combination locked.
22. mander said...
Maybe there are secrets behind this bubble. Should the scientists have discovered the anti aging pill and so people living longer houses will have more value? Other than that how stupid can they be to put so much money into property?
23. Tpbeta said...
I reckon that tin foilery aside, the name of the game is currency management. Everyone is trying to talk down their own currency while pretending the resulting moves have nothing to do with then, but rather markets are to blame. Why? Because a devalued currency has the same effect as fiscal stimulus while also being inflationary, and is therefore much saught after by all.
24. vacuouspolitician said...
Penfold strikes again. Mumbling bumbling old dinosaur. Should have been sacked years ago.
25. vacuouspolitician said...
mander @22
Perhaps they "need" it for their holidays in the sun/cruises...or perhaps (later) for their nursing home costs. After all they ARE the golden generation!
26. mystie010 said...
down wave (Post 17) That is pretty depressing where did you get all of that from?? However it sounds pretty much like what is going on to me.
27. vacuouspolitician said...
down wave
"Slaves were used for profit pure and simple, its not colateral or iatrogenic. It is slavery, the NU Labour way, Thacher's way and Cameron's way. What is the point of power unless the power holders enslave? The Power Holders are all at Negative 3 and 4 on the Scale of Emotional Health"
Spot on. Very very sad but true.
28. down wave said...
26. mystie010 said...down wave (Post 17) That is pretty depressing where did you get all of that from?? However it sounds pretty much like what is going on to me.
Thursday, August 13, 2009 12:08AM
It is from my latest book entitled 'Naked Spirit' Chapter 4, subheading, 'The Scale of Emotional Health' from the genuine but very rare Hero at Plus 5 through Chonic Boredom a netrual +/- 0.0 down to negative -5 Chronic Apathy. Eleven Levels all with their traits bullet point listed. It exposes the core of human behaivour, there is no where for them to hide now.
29. James said...
Down wave - I think s2r1's already read your book - funnily enough I remember him mentioning the same thing a while ago.
+5 Hero, -2, &c., &c., are you into Dungeons & Dragons at all?
30. timmy t said...
Could also be written as... An additional 500,000 people cannot afford to buy or rent so are choosing to lodge until prices return to a sensible level.