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Lord Blackadder

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  1. All economies have a neutral rate albeit it is constantly changing. One interpretation would be that everyone else appears to be moving to what they consider their neutral rate is. We're not because it would be too painful. If one assumes that the economy moves in cycles then I would suggest that after a period of global low rates it would be prudent we stopped printing money too. Our neutral rate is not 4.5%. The other oft quoted reason is the impact on exchanges rates and money flows. Many people think that a low pound will help exports and so is worth a little inflation to maintain growth. Personally I'm not sure we've got anything that anyone wants to buy, other than financial services, and given Eu growth is likely to remain muted there's probably not that much upside for exporting anyway. All in all a good recipe for stagflation. I think they ought to raise rates, get the pain over with and just have the stag bit, thanks.
  2. Just been watching Trichet's (ECB) announcement to the Eu Parliament Committee. They're going to raise rates at the next meeting. So I guess were the only ones who seem to think we can keep riding the debt wave with no inflation. Eu growth is as bad if not worse than ours and yet they know whats coming. Trichet explicitly said that accomodation was high, liquidity was high and oil prices were historically high and likely to remain so. Most significantly they even had an analyst on Bloomberg state it wasn't really about how much they rose by but that the ECB is looking, like the US, to move to its 'neutral' level, and wait for it, this could be as high as 4% by 2007/8! How the hell people, politicians and economists think that the UK in isolation can maintain its crap economy, bubbles and smiling public with artificially low rates while the world goes in the opposite direction staggers me. My money, like Charlie the Tramps, is for rates moving up to 5/6% in the next 2 years; while a numb population asks where it all went wrong. Frankly, what our Miles reckons doesn't matter a [email protected] IMHO.
  3. I haven't logged in for a while because as the prices faltered the discussion seemed to falter too. I believe the trends and media over the last 3 or 4 months have been broadly negative and hence raised a lot of hopes on HPC that things were finally moving concertedly downwards. However here we are with a bit of a rally in data and PR and naturally despondency rapidly establishes itself. The bulls have got there tails up; not least because the bears are expressing quite alot of frustration and pessimism. My view, for what its worth, is that the UK economy still looks as ropey as ever and the global position is becoming more and more unbalanced. It is easy to get weighed down (or up for that matter) with the issues close to home changing daily; but ultimately the foundations are crumbling. I still believe that eventually a major economic event will occur, which in all likelihood will have significant implications for the UK economy and houseprices. I've read in some posts about peoples 'faith' in a HPC. Well IMO faith doesn't come into it. This site has presented enough decent data, arguments and theories over the last 2 years to inform anyone of the various factors involved. Pull them together and have the courage of your own convictions, rather than react to the latest piece of emotional blackmail. My money is still on price falls over the next 3-5 years, and on that basis or even flatlining there is no argument to buy and every reason to wait. The game is very much alive. I think Lex in the FT thinks so to. http://news.ft.com/cms/s/158b3b68-56a2-11d...000e25118c.html
  4. http://www.thisismoney.co.uk/mortgages/hou...3&in_page_id=57 Now lets see how the media and the market responds. Everyone knows bubbles past and present spread from the SE; as did the busts. Another good statistic in the armoury for the arguments against irrational optimism.
  5. Dr B. Do you think this will be an extended correction? I've held onto my oil stock in the past through various ups and downs but this looks a bit more serious across the board. What's your time frame - for the moment ?
  6. Getting confused now. Although todays equity losses were more broad based a large component over the last 3 days has been the retreat in energy stocks on the back of BP warning and the Fed's hawkish comments on inflation. Randall: if what you say is true and I suspect it is do you think energy stocks will be supported by shortage and therefore prop up the ftse or are you saying the whole thing will tank on the threat of reduced demand due to stagflation and rising interest rates? If the ftse does tank the negative press will increase massively. No amount of Halifax reporting will offset this one. I read tonight they reckon 05 growth could be as low as 1.5%. I can't wait for Brown to explain this one!
  7. Agreed. One aspect of the programme which I liked and helped to raise questions was the way the showed clips of Brown from 1997 saying 'stability' 'no more boom and bust' 'managing the economy not for short term gain'; and then comparing that with the results now. The comparison between the rhetoric and the results was stark. Where has all that money gone?!?
  8. You've got to take into account the audience. Balls did come across very unconvincingly. Far better the public think ' there's something not quite right here' than have Paxman bash away, which is when people switch off completely by thinking he's giving Balls a hard time and thereby let him off the hook. This sort of information seeps into the public consciousness. You can't batter them with things they don't really understand and expect them to have a revelation.
  9. Is that rhetorical Rich? Hell manufacturing has been crying out for investment and some radical 'reform' for years. There's nothing that Brown or anyone is going to do in the next 6 months to prevent the accelerating decline that is apparent daily. Even without the oil price it would be a train wreck. Brown must go to bed at night cursing the weather in the gulf; because IMO that has accelerated the structural problems he faces by 6 - 12 months and now there's no time for manoevre. He's dead in the water.
  10. Hell, Guys, what do you expect? That was as negative as you could possibly get on mainstream and at a level that the public might understand. At the end of every section it effectively left the (IMO) loaded question as to Brown's 'economic miracle' It touched on most areas, albeit not the housing market, but it surely made clear that most of the economy was supported by public spending and debt, AND that this CANNOT continue. For all those people with significant debt this was a reasonably clear warning. Whether the majority have the intelligence to heed it is open to question. As with all these programs I was continually waiting for the punchline which would be the sliver lining. There wasn't one - which as we all know is the reality. The worm has truly turned and this is the latest in a long line of articles which will proceed the inevitable bust. My prediction, as was Clarke's, is that Brown will succeed; and probably in the next year. If they leave it longer he will be tainted by the downturn and the next election will be up for grabs. The only way that this can be avoided is if he becomes PM and blathers his way out of it. The labour top brass know this and hence the unequivocal support for a seamless transition. Sad to say British politics is bankrupt at virtually all levels, as will be many of its citizens. The future as it stands is pretty bleak.
  11. WOuldn't go that far. But for people with their eyes and ears even half open it must raise questions. If the BOE cut interest rates to support consumer spending and housing and then inflation and house prices increase it just makes them lall ook completely bl&&dy stupid. I believe that contradictory data like this actually undermines confidence in the medium / long term. How can it do anything else when it appears none of them know what they're doing. It has been argued that if Merv and the boys supported a hold last month then now Bean and his bozzos have been proved trigger happy then there should be votes for a rise this month. If this housing data is true then they should. Again can't see it happening and if they hold they'll presumably have to give some explanation about the quality of the housing data. Halifax themselves put a disclaimer on the rise. IMO they really needed to get a big number under their belts to stop the YOY going negative in the near future, which is what really counts. Shouldn't let anyone keep driving hard bargains though if their in the market. At the end of the day the buyer still dictates the price.
  12. Thanks for your views, Guys. Regrettfully can't afford to put too much into Gold, need the cashflow. Time for me to do some more reading. Suppose an additional question is how fast could it all unravel. I know stocks can drop double digit in minutes but I would presume we would get indicators that cash was a dangerous spot to be in? By that time gold would be expensive and then I'm back to buying bricks and mortar despite the fact it too will have low intrinsic value.
  13. Lurker, Good analogy. Still not clear to me though. The article I read was an interview with some guy called Gordon. He suggested that Cash and Gold would be the safe havens for deflation. This in itself seems contradictory as I thought Gold was a primary hedge for inflation. I guess he's suggesting it as a haven against complete financial collapse. Haven't seen anyone putting more than 20 - 30% into gold. Where the hell do you put the rest? Don't count myself as particularly slow but having trouble getting my head round some of the contradictions at present. While I'm at it, I also have some oil stocks. Don't know whether they'll rise due to increase oil price or drop because the wider economy is going under. I'm going to buy a bloody house soon and try sleep at nights.
  14. I agree like many that inflation is understated. The central banks are still printing money like there's no tomorrow with the associated problems. I did finally read tonight an article linked from another thread on Kondratief Cycles. This being the theory that economies operate on a 70 year cycle comprising '4 seasons'. We're now firmly in 'Winter', the season in which debt is purged from the economy in a massive deflationary depression. The last time this occured was 1929 and arguably all of the imbalances are significantly larger this time. So my question is what is the prognosis? Inflation or deflation? Or is the current inflation of the banks own creation, trying to hold off the inevitable deflationary effects? Would like to know as holding a fair bit of cash and there's a bit of a difference in dealing with the fallout from each. Cheers to anyone who can help?
  15. http://news.ft.com/cms/s/5fe58adc-0e0f-11d...000e2511c8.html An alternative way of explaning of why we are up the proverbial. The governments are just letting us consume as much as we like on the back of the developing economies and are own debt. This faustian pact will come back to haunt them. Money Morning advises: "on Monday, China allowed the yuan to close at its highest level against the dollar since July's revaluation - 0.16% above the initial appreciation of 2.1%. That makes imports more expensive. So there's every chance that the prices of clothes and electronics could stop falling, particularly if China frees up the yuan's daily trading band to 2% from the current 0.3%, as one state agency has suggested". Mandelson, like the ***** he is, is desparately trying to hold back the tide of jumpers threatening the Eu economies but is actually just warming up inflation in the process. What is the definition of stagflation? Based on trends - decreasing growth and increasing inflation - we're there already.
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