Methinkshe

Why not, I wonder? Do you think it could have had anything to do with a national loss of confidence following the Vietnam war debacle? If so, I wonder what unconstitutional action could slip past unchallenged due to a similar loss of confidence following the Iraq debacle. Or perhaps I'm way off....just a thought.....

Course it will! Sorry! Dollar falls if he cuts. Stock market falls if he raises.

Sounds about right, to me. We bought our first house in 1971 (3-bed terrace on south coast near Brighton) for £5000 or thereabouts. Our joint income at the time was £2500, i.e. £1000 for me, £1500 for husband. Which meant that the mortgage remained affordable (under 4 X husband's salary) on his income alone.

As I understand it, the markets have already factored in a rate cut on 18th. So what happens if Ben holds or raises? Stock market will take a nose-dive, as will the dollar. Markets have Ben over a barrel - at least they think they do. Imo, he should hold or raise just to tell the markets he ain't going to be a walkover, and sod the fallout. But I bet he cuts! Edit to correct daft mistake before anyone else quotes this nonsense: Dollar will obviously rise if rates are hiked or held.

I read somewhere recently (and I'm blowed if I can remember where, perhaps someone can help) that the average BTL investor has 100 properties in his portfolio. I had no idea. I was thinking along the lines of a dozen or two. If portfolios of this size have been rapidly built on minimum equity they could turn very sour very quickly. Reverse leverage is frighteningly expeditious.

Seems to me that Merv is saying that a slowing of consumer demand caused by current credit crunch will play out as less pressure on inflation and therefore he could safely lower interest rates without re-igniting inflation and exceeding his 2% target. But what about imported global inflation such as wheat, oil, and inflation from China? There's not much he can do to control that, is there? He's going to be wrong if he raises rates and wrong if he lowers them. Probably his best bet is to sit on his thumbs and do nothing!

Another interesting bit of info from same book quoted above. "Several Studies have been made to show the correlation between monetary growth and the election cycle. During the four-year cycle the highest levels of monetary growth have nearly always been recorded during the presidential election year. The lowest levels of monetary growth are generally recorded in the year of the inauguration, as the party in power in the White House attempts to reverse the potential damagae that monetary excessses can cause. While election years typically favour investors, post-election years tend - on balance - to be crash-prone years."

So far, so good. But he's left himslef a handy loophole: King said central banks should only act when there are ``economic costs on a scale sufficient to ignore the moral hazard in the future.'' And it's anyone's guess what that might be.

Some interesting excerpts from Robert Beckman's book Crashes. The Florida Property Crash The truth was that practically everyone who had any property interest whatever in Florida after the market peak in 1925 was totally wiped out, if that interest was the result of borrowed money. Even those who took out mortgages for as little as 10%, the prevailing purchase price, found that their entire 90% stake had been wiped out and the lenders were clamouring for what remained of the 10% that had been advanced. In some cases, residential property prices fell by more than 90% from their peak values. In certain areas, Florida properties were unwanted and unsaleable at any price. The collapse in the economy of Florida was remarkably swift. Banks failed throughout the state. The crisis was particularly severe in Miami, where everything had previously been described in the most flowing superlatives. Bank clearings for the city, which had soared to over 1 billion dollars at the time of the peak in property values, slumped to just one quarter of that figure in the two years following the end of the Florida property boom. By 1928 the figures halved again, to 143 million dollars. In 1927 Homer Vanderblue, when visiting Miami, described it as a 'ghost town'. The opulent real estate offices in the city's main thoroughfares were nearly all closed and boarded up, rapidly showing signs of dilapidation. The few hotels that remained were empty................. ...........The bank failures came thickest and fastest in 1928 and 1929. In those two years, the deficits of the failing Florida banks were higher than those of any other state in America. There were no automatic bail-outs in those days: it was each bank for itself. And by mid-1930 no fewer than twenty-five cities, including Miami, were in default on their bonds. Twenty-six Florida banks had already failed. The Great Depression meant there were more to come. If you have meen mesmerized by the property boom of the last few decades or so, here is a thought that you might wish to consider: if you've been in a poker game for half an hour and you still don't know who the patsy is - you're the patsy! Conventional wisdom has it that residential property values always rise in the long run. So does hot air! It took Florida property prices forty years to return to the peak values of 1925, the long, steady rise in the rate of inflation notwithstanding.

Tell them your daughter's a lesbian - it is legal to discriminate against children but not on grounds of sexual orientation.

Hey, Goldfinger, I fancy buying a little bit of gold on a regular basis. But as a comlete novice I haven't a clue where to start. Took a look at BullionVault and having never traded before (either offline or online) was horrified at the apparent complexity. Had visions of doing something really stupid on the click of a mouse. So then I looked at gold sovereigns and kruggerands and couldn't decide what was best. And what kind of sovereigns does one buy - old or new, proof or not proof? It's so so confusing for a novice. I only want to invest about £500 to begin with and then maybe add another £100 on a monthly basis or thereabouts. But I don't even know where to begin. What would you recommend for a beginner, very small player?

What's the news that caused that spike, then?

Looks like irrational exuberance to me, but what do I know? Telegraph writer, Tom Stevenson, has a different view. Bull market may have steam left for an upward surge

Everything points to deflation, yet...... There's something nagging in the back of my mind - like irrationality and political expediency and that kind of thing. Any government that presides over a significant deflation is as good as signing its own death warrant. I can't help feeling that there is the potential for some very creative financing that could still cause a global hyperinflationary blowout. And if it were a global phenomenon, in some perverse way it wouldn't be quite as bad as would be the case if only one country were affected. There'd be less reason for a government to opt for the straitjacket of deflation if the whole of the western world were in a hyperinflationary bed together. Also, inflation penalises savers and rewards debtors - and just look at the ratio of savers to debtors. Which government would want to bail out a few savers while at the same time dropping millions of debtors into deep trouble? Not exactly a vote winner, is it? Deflation seems to be the obvious route and the one that makes economic sense but it would be so hugely unpopular that it would be a suicidal course for any government to take....unless they simply cannot avoid it, which is always a possibility. Then again....creative financing and all that....I mean, who on earth would have thought that such a mountain of debt and massive asset inflation could have been built up on the back of such risky financial instruments as CDO's?

That in itself is a good enough reason for me to keep an open mind and to continue considering the possibility of hyper-inflation. Beware any sign of a herd mentality - that's my maxim.

Shoot! Predicting is a mug's game....but, tomorrow, 13000 will be....youch...just bitten my tongue!

So what's your point? That I didn't read the thread very well and repeated what had already been said? Hands up! Or maybe you are just pointing out that two of us independently agree.....it would be nice to think the latter and that you aren't some pedant with little more to do than point out the mistakes in others' posts. Since I have a soft spot for grumpy old men I'll assume your intentions were worthy.

Dow heading south Looks like 13000 will be tested today....

Cash is one of the last bastions of freedom against an ever-encroaching government. They'd just love to have a cashless society where you are totally under their control. So use cash wherever possible. Okay, it's a bit off topic but the move toward a cashless society has been a bete noire of mine for a couple of decades. Don't fall for the ease and convenience malarkey of a cashless society, it's all about control.

I remain bearish about oil in the medium term. After this inflationary/bubble blow-out and when deflation sets in, there will be an almighty scrummage amongst oil producing nations to retain market share and stabilise income which must result in additional supply in the first instance, followed by falling prices.

Got to be an understatement, hasn't it? When did anyone of any importance say to the media that plebs should beware because of an incipient financial implosion? Whatever is said in the media by someone in the know, multiply by ten and you could get near the truth.

Poor suckers! You have to feel sorry for them.

If them out there are issuing instructions to survive recession, that means we should be looking at how to survive depression.

EA's must be getting really desperate to be spamming this kind of junk. Surely there can't be any takers left for this rubbish? And all I did wa sign up to look for prperties for elderly mater.