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game over

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  1. Nicky Cambell went to a very posh Scottish private school, but he implies that he's a man of the people
  2. You writing that, well, that's.................... ironic to say the least Find me your chart showing the UK narrow money supply collapsing please. And please don't bother showing me anything that has been adjusted for falling velocity. Do you understand that the money supply and the velocity of circulation are different things? The bottom line is this: some people never get it. I'm sure that you've got lots of sterling debt, along with your cash or near cash assets. So a bit of hyperinflation might help you. The other thing I've realised is that economics should be part of the national curriculm. There are too many knobs working in banks and other City institutions that are run by numpties like EDM, silver spoons that studied History or Classics, who are completely clueless. It's no wonder we're in the state we're in. One thing's for sure, Johnny foreigner won't be pumping his savings into London anymore - the facts speak for themselves. EDM and his ilk screwed up bad. It reminds me of the football chat aimed at an incompetent ref, 'you don't know what you're doing, you don't know what you're doing'.
  3. You should really stop using words that you don't understand. P.S. Did you notice the graphs posted a few pages back?
  4. The data is there. The historical precidents are there, but still EDM prefers to stick with his quasi-religious beliefs. Only a fool would rule out the possibility of inflation as 'absurd'. I can only think that a strong vested interest drives EDM's thinking - would he really be silly enough to be holding a large proportion of his cash in sterling? Maybe, which is why he wants to discount the possibility of inflation. Poor sod, I feel sorry for him
  5. You , because you don't know anything about them You stick with the Church of EDM School of Economics, based on a mix of waffle and pure ********
  6. Yes, and? The problem is that the velocity of circulation is unstable. Any wiff of inflation and it will kick off upwards sharpish - we may be close to this point (the price of gold is a good barometer)
  7. I thought that we didn't have any sub-prime in the UK Now, that revelation is seriously off-message, and that's why Mandy's hacked off with Mr. Starbuck's
  8. Correct. Deflation is even possible, theoretically, if the authorities continue to inject more cash via bailouts.; all that's needed is a simultaneous fall in V The inflationary spark that leads to accelerating V and inflation could be an Iceland style collapse of the currency that forces import prices up - then the monetary inflation begins. This risk is certainly not 'absurd'
  9. Go easy on the economists! We know about the causes inflation. Its the politicians and the classics graduates that run Britain's financial institutions that are the problem. But, you are right on the velocity of circulation. The broad money supply can be reduced by reduced bank lending. However, the narrow money supply is driven by the printing press - commercial banks can't do much to alter it.
  10. Nope, you're still confusing narrow money with the velocity of circulation. The real issue is that the velocity of money has fallen - that's why total spending is down Central banks have been pumping billions into the narrow money supply, but total expenditure continues to fall. Why? The answer is a reduction in the velocity of circulation; banks, as you know, are holding cash back. This cash has not vanished. My fear is that the authorities will over inject narrow money. They will keep on pumping cash in until they get a reaction. Unfortunately, once the extra narrow money (cash) is in the economy it can't be taken out. All the government can do is to raise rates to contract the demand for broad money. The nightmare scenario is that the BofE pumps too much cash into the system, an initial bout of inflation is created, which in turn creates a rapid increase in the velocity of circulation (from a low starting point) - and that's how hyperinflation arises. Consider the risk of this hyperinflationary scenario 'absurd' if you want to. It's happened numerous times before. Infact without exception this is the only route to hyperinflation (hyperinflation preceeded by a deflationary scare)
  11. Yes, falls in GDP are inflationary, provided that total expenditure (the money supply multiplied by the velocity of circulation of the money supply) remains constant. Do you get it? A smaller volume of goods being hunted down by the same amount of expenditure will force the average price level up
  12. One more thing. Second round effects are irrelevant. They don't happen during a hyperinflation because hyperinflation is not caused by rising wages. Hyperinflation creates starvation. Hyperinflation is caused by a rapid increase in the narrow money supply coupled with an accelerating velocity of circulation. In Eastern Europe hyperinflation was also caused, in part, by a collapse in national output e.g. Ukraine. I repeat, hyperinflation is not caused by rising wages. However, Hyperinflation does destroy real wages. Again, you need to do some basic learning / research.
  13. No you rule out the risk of inflation. According to you talk of inflation is, "absurd" The effects of QE can not be withdrawn quickly and easily. Comments like this indicate that you have not studied any economics at all, let alone hyperinflationary events that have happened in the past. I've taken the piss out of you in the past, but I say this next comment with complete sincerity, EDM, you need to take the time and effort to understand some basic economics, in particular the quantity theory of money. Like many others that post on here you seem incapable of distinguishing between the velocity of circulation of the money supply and the narrow money supply.
  14. There are three factors that determine the average price level: the money supply; the velocity of circulation of the money supply, and national output. Pumping in narrow money via QE may or may not increase the average price level; it all depends on what happens to the other two variables. The biggest problem for policy makers is that the velocity of circulation is unstable - it can speed up very quickly, creating an inflationary spiral if Joe public senses a risk of inflation. Just read about hyperinflationary events in other countries Other things being equal, a fall in national output will also push up the average price level - this is happening at the moment. On last thought - there are some people on here that think that policy makers make their decisions on the basis of what might be best for the people.
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