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Biggus

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  1. You may be correct about generational blame. Never really a good idea to assign blame to groups of people, most of whom can't really change anything. That said Howe and Stauss have some interesting idea about generational cycles and their effects on culture and the economy. Here's Tony Robbins discussing them with Ho
  2. House price up massively, bond prices through the roof and stocks prices up, but because low order goods did not keep pace the overall price level did not increase? It's gibberish. QE caused prices to increase. First in financial assets, making the rich richer and now in goods and services ordinary people buy making the poor poorer. QE distorted the economy and has created a decase of stagnation. As credit tightens all the pretended growth created by money printing and lowering rates will evaporate. It was a terrible policy.
  3. They should tighten faster. The damage to the economy was done by the boom. Credit expansion distorting the economy, forcing investment into the wrong places and so forth. The recession corrects the damage done by the debt fueled boom. Recessions are painful but good for the economy. Credit booms are lovely while they last but cause massive structural damage that needs to be corrected.
  4. Art Laffer has been talking about this recently. A low flat tax would increase output. More supply lowers inflation. Coupled with rate increases to lower demand inflation might be brought under control.
  5. Renting is preferable to debt right now, for sure. A lot of people have been tricked into high levels of debt. Higher rates will be really bad for them. It's unfortunate, to say the least. We can't go back in time and change that. Best that can be done is increase rates quickly, to prevent even more people being suckered in. Right now financial security is simply not obtainable for many people. Higher rates should at least give them a chance. Allowing people fair returns on savings and investment and giving people the chance to buy a home would be a massive improvement on the status quo. I hope it happens, but we're up against powerful vested interests.
  6. 2% is far too low. Saw this video a few days ago in which Art Laffer says that tax cuts and a smaller public sector might be what's needed to tackle inflation. He changed my mind on a couple of points.
  7. No doubt they will be trying to find an accounting trick that will replace actual production of goods and services. A bubble, loose credit, money printing or whatever they can scheme up. The BOE really is a horrific institution.
  8. I'm actually quite impressed with the Fed over the past few months. They are doing what needs to be done. It will be painful but if they keep going the US will come out of this with a stable currency and growing economy. Really didn't expect Joe Biden, of all people, to support painful but necessary decisions.
  9. It would need to be a really bad war to compete with the destruction caused by the BOE since they were made independent. Maybe WW2 was as bad. In terms of disasters they are probably not yet as bad as the Black death, but worse than Small Pox. Perhaps a small nuclear strike would be comparable. But, hey, at least accomodation is unafordable, so there is that.
  10. In Switzerland the inflation rate is 2.5%. Amazing that commodities are not causing inflation for them.
  11. 8% in a month? That's incredibly high. Really, though, other than petrol I havn't noticed prices really shooting up this month. It's the empty shelves that really worries me. We depend on the BOE to bring inflation down, so I think we are in for a rough ride.
  12. Another victim of the BOE's bubble. That sort of money ought to allow you to retire to a fairly comfortable, worry free life. Instead the mark faces a lot of stress and losing piles of money they probably don't have. Economically it would be better to have people invest in productive business. The whole situation is crazy.
  13. Markets are forwards looking. They tend to price in what people think is going to happen in the future. Everyone knows the BOE has no clue, so expected a quarter point rise and priced it in long ago. The shock was the Fed increasing by a higher amount than expected, which was priced in last week with huge falls in the market. Buy the rumour, sell the news.
  14. S+P is up about 650% since 2008, not counting dividends. There's no correlation to the real economy at all, just money printing and interest rates. If the Fed were serious about beating inflation markets would take an absolute battering, not just the tiny correction we've seen so far. Markets are already starting to price in a Fed capitulation, though. Making tough decisions is not really in the central bank play book.They just don't have what it takes. The BOE is a complete joke. They will be up to their money printing and lowering interest rates nonsense again soon enough. First bit of bad news and the printers go back on. I don't see this ending until inflation really starts crushing people. Prices grow as a portion of themselves. This can get really bad really quickly.
  15. We've lived through a decade when real money, that was worked for and earned, has been swamped with printed fiat and bank credit. By design there has been no reward for working and saving. Investing in companys with sound fundamentals and good returns is out. Speculating on where the printed money would go was in. Productive work is a waste of time. Gambling on stocks and bitcoins is the place to be. Not a recipe for a healthy economy. House prices have rocketed out of reach of working people. A good quality of life can't be attained when every time you earn a pound a bank created two pounds in credit and outbids you. I'm actually becoming tentatively optimistic now. It seems like central banks are actually going to stop printing and begin allowing interest rates to increase. This will, of course, bring about a huge recession as real value is found and debt based garbage goes bust. If they stay the course, which is not likely, in a year or two the winter will be over and spring begins. Recessions hurt. If, however, they are allowed to play out without interference they are over quickly. The pain would only be prolonged by bail outs. money printing, dropping rates back down and so on. The next couple of years are going to be tough. But I think we may finally go through the needed correction and return to a fundamentally sound economy. Maybe I'm too optimistic.
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