JoeDavola Posted March 5, 2009 Share Posted March 5, 2009 Yes, the newsreader on BBC radio has just said that the BOE is to start printing money. I was surprised to hear it being put so plainly to people. This basically means savers are screwed....doesn't it? The funny thing is I have yet to see the definitive answer here on how to 'protect yourself' - I suppose diversification is the key, not holding your entire life savings in stirling (like I have...). The funy thing is, I would have just bought a bloody house and not had this worry had houses been any way sensibly priced, but I live in Northern Irealnd where sellers still have their heads in the clouds. ~~~~~ Edit: http://www.bankofengland.co.uk/publication...ws/2009/019.htm Quote Link to comment Share on other sites More sharing options...
Danny Deflation Posted March 5, 2009 Share Posted March 5, 2009 "Quantitative easing" will be announced today. It's started. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted March 5, 2009 Share Posted March 5, 2009 This basically means savers are screwed....doesn't it? That is certainly the message that my (retired) parents are receiving. Spoke to them yesterday and they told me they were going to 'run down' their savings by increasing the number and the length of their foreign holidays. I think returns on your savings of 1% or less, with the looming threat your money will be inflated away, is not a great way of encouraging people to save. People are losing faith in the system. Quote Link to comment Share on other sites More sharing options...
AskFrank Posted March 5, 2009 Share Posted March 5, 2009 What's the alternative to savings then? Please don't say gold... Is NOW the right time to buy? Quote Link to comment Share on other sites More sharing options...
IMHAL Posted March 5, 2009 Share Posted March 5, 2009 That is certainly the message that my (retired) parents are receiving.Spoke to them yesterday and they told me they were going to 'run down' their savings by increasing the number and the length of their foreign holidays. I think returns on your savings of 1% or less, with the looming threat your money will be inflated away, is not a great way of encouraging people to save. People are losing faith in the system. And that is precisly the point I and a few other where making when arguing the toss with EDM - the fact that when faith is lost in the fiat system then policy makers will have lost control of all levers in the economc and soon no one with accept cash for fear of its value being eroded. At that point there is nothing that the policy makers can do. I still cannot believe that they are doing this - there was an article in the telegraph promoting QE - the comments to the article all said the same thing - THIS IS MADNESS AND WILL LEAD TO HYPERINFLATION (Copyright Eric). They just don't get it - its about faith. Fiat = Faith. No faith no fiat. Quote Link to comment Share on other sites More sharing options...
Extradry Martini Posted March 5, 2009 Share Posted March 5, 2009 The BoE prints money all the time - this is just a biiger version of it. It's not that big though, given what is happening. Quote Link to comment Share on other sites More sharing options...
time 2 raise interest rates Posted March 5, 2009 Share Posted March 5, 2009 (edited) Not if you are saving to buy a house, inflation needs to be higher than the rate house prices are falling by to make buying a house better than cash at 0%. Halifax say house prices are falling by 17.7% a year so inflation must be greater then 17.7% to make buying a house a good home for your cash. Eg £200,000 in the bank at 0%= £200,000 year end. £200,000 with inflation at say 10%= £180,000 year end. £200,000 in property falling at 17.7% a year wil give you £200,000 - 17.7% = £164,600 year end. Cash is king even at 0% interest rates when property is crashing by 17.7% a year. Edited March 5, 2009 by time 2 raise interest rates Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted March 5, 2009 Share Posted March 5, 2009 The BoE prints money all the time - this is just a biiger version of it. It's not that big though, given what is happening. This time it's public though. That is the major difference. As an earlier post pointed out, our monetary system is based on faith. Once you pull back the curtain and realise you are working for paper - paper that can be devalued by the whim of a few men (and women), you have second thoughts about the whole thing. By announcing that they are printing more money, they draw attention to the nature of a fiat currency. I don't think this is going to end well. Quote Link to comment Share on other sites More sharing options...
IMHAL Posted March 5, 2009 Share Posted March 5, 2009 The BoE prints money all the time - this is just a biiger version of it. It's not that big though, given what is happening. And you still don't get it. When Bernake said that the "threat" of printing money would be enough to increase spending, he was'nt looking at a formula, he well understands the pychology behind money (but he's still and idiot) - whereas you are happy with your spreadsheet view of the world. As an aside I was talking to the heating oil delivery man (the man on the street) - even he is aware that money will be printed - there is fear on the street. If we see even a blip of inflation or Sterling crash then every man and his dog will head for the exit out of fiat. Its that tense! Quote Link to comment Share on other sites More sharing options...
R WETHEREYET Posted March 5, 2009 Share Posted March 5, 2009 What I don't understand is why is the pound rising this morning. Quote Link to comment Share on other sites More sharing options...
XswampyX Posted March 5, 2009 Share Posted March 5, 2009 The thing is, would you sell your house in this enviroment to replace it with our funny money? I don't think I would. As far as the housing market is concerned this will be just one giant log jam. Watch the volume of sales plummet. Quote Link to comment Share on other sites More sharing options...
IMHAL Posted March 5, 2009 Share Posted March 5, 2009 The thing is, would you sell your house in this enviroment to replace it with our funny money?I don't think I would. As far as the housing market is concerned this will be just one giant log jam. Watch the volume of sales plummet. That is a good point. Why would anyone swap assets for cash when cash has become funny money, a plaything for the powerfull, a folly. This whole system is being destroyed by those who's job it is to protect it. Quote Link to comment Share on other sites More sharing options...
ElPapasito Posted March 5, 2009 Share Posted March 5, 2009 And you still don't get it. When Bernake said that the "threat" of printing money would be enough to increase spending, he was'nt looking at a formula, he well understands the pychology behind money (but he's still and idiot) - whereas you are happy with your spreadsheet view of the world.As an aside I was talking to the heating oil delivery man (the man on the street) - even he is aware that money will be printed - there is fear on the street. If we see even a blip of inflation or Sterling crash then every man and his dog will head for the exit out of fiat. Its that tense! This is the intention, no? Make the cost of keeping cash so high that savers spend and the economy gets kick-started again. Just like previous poster said - retired folks starting to think about spending their savings on holidays. But the problem is that BoE would have to lift base rates above the nominal RPI if QE related consumer spending pick-up shows in inflation. Plus QE also lowers currency strength causing import inflation. Base rates at near zero is the key policy; the holy one that cannot be questioned. 1/4 % rise would create utter panic. I'm not surprised it is little by little and let everyone know all about it 6 months in advance on QE. They can't afford inflationary effects to kick in in an uncontrolled way or THEY are finished. EP Quote Link to comment Share on other sites More sharing options...
SarahBell Posted March 5, 2009 Share Posted March 5, 2009 What I don't understand is why is the pound rising this morning. Cos they know money isn't really being printed. But the threat has worked enough for people to cash up and buy houses... they just need to turn the thumbscrews so that every last penny gets suckered out of bank accounts and back into the housing market Quote Link to comment Share on other sites More sharing options...
domo Posted March 5, 2009 Share Posted March 5, 2009 Utter crap, they've just invented a new way to flood the market with Gilts and called it printing money. Same rubbish they've been doing for 18 months yet everyone is fooled again. Quote Link to comment Share on other sites More sharing options...
0q0 Posted March 5, 2009 Share Posted March 5, 2009 This is the intention, no? Make the cost of keeping cash so high that savers spend and the economy gets kick-started again. Just like previous poster said - retired folks starting to think about spending their savings on holidays.But the problem is that BoE would have to lift base rates above the nominal RPI if QE related consumer spending pick-up shows in inflation. Plus QE also lowers currency strength causing import inflation. Base rates at near zero is the key policy; the holy one that cannot be questioned. 1/4 % rise would create utter panic. I'm not surprised it is little by little and let everyone know all about it 6 months in advance on QE. They can't afford inflationary effects to kick in in an uncontrolled way or THEY are finished. EP Hasn't worked on me. Not a bit. And I need a new car, desperately need a new or nearly new, for practical reasons. Also hasn't worked on anyone I know that I can think of. The essentials like food I am buying as normal, slight cutbacks, and other non-food essentials I am putting money in the tills at charity shops. Here's a list: Branded square catridge water filter and jug - brand new at charity shop £4 Small camping stove (burns twigs) - brand new at charity shop £2 Scales that weigh and do BMI etc - nearly new at charity shop £3 Coat - nearly new at charity shop £6 (brand name) Tea etc 59p for 100 bags at 99p Store (international brand name imported from Poland) I'm not putting a penny in any profit-making firm's till unless I have to - my income has been slashed and I'm not spending. Quote Link to comment Share on other sites More sharing options...
VedantaTrader Posted March 5, 2009 Share Posted March 5, 2009 What I don't understand is why is the pound rising this morning. QE has been a given for months now, its been factored in already, also currencies are relative, so if sterling is rising, it could be also that the news from the countries of other currencies is equally bad if not worse, hence sterling could rise. But a one day move up or down in any currency has little relevance. Quote Link to comment Share on other sites More sharing options...
R WETHEREYET Posted March 5, 2009 Share Posted March 5, 2009 Cos they know money isn't really being printed. But the threat has worked enough for people to cash up and buy houses... they just need to turn the thumbscrews so that every last penny gets suckered out of bank accounts and back into the housing market Thanks, for that. New to this site, but finally starting to get it. God this government stinks. Quote Link to comment Share on other sites More sharing options...
6538 Posted March 5, 2009 Share Posted March 5, 2009 What's the alternative to savings then? Please don't say gold... Ok, I won't - but I'm going to pop down the coin dealers this afternoon. Quote Link to comment Share on other sites More sharing options...
Ruffneck Posted March 5, 2009 Share Posted March 5, 2009 if the elderly do spend all their money on holidays then does it really help the UK economy that much? or are they talking about holidays within the uk now that sterling has fallen so much Quote Link to comment Share on other sites More sharing options...
Newy Posted March 5, 2009 Share Posted March 5, 2009 By my calculations ( quite possibly wrong ) If the BOE shoves 150bn into the money supply of 1.8trn that means a 7.7% devaluation of the pound. Am I even close ? Quote Link to comment Share on other sites More sharing options...
Extradry Martini Posted March 5, 2009 Share Posted March 5, 2009 (edited) And you still don't get it. When Bernake said that the "threat" of printing money would be enough to increase spending, he was'nt looking at a formula, he well understands the pychology behind money (but he's still and idiot) - whereas you are happy with your spreadsheet view of the world. A word of advice: You would look less of an “idiot” yourself if you weren’t so quick to dismiss people who clearly know a great deal more than you…. You’d also do well to look up what Bernanke actually said, rather than that citing that whaich you want to believe he said. Edited March 5, 2009 by Extradry Martini Quote Link to comment Share on other sites More sharing options...
Extradry Martini Posted March 5, 2009 Share Posted March 5, 2009 1. The scale of the QE happening now is tiny compared to the deflationary forces at work. 2. Any move in sterling today has nothing to do with QE – it has been expected for ages, so the market would hardly move as a result of it today. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted March 5, 2009 Share Posted March 5, 2009 if the elderly do spend all their money on holidays then does it really help the UK economy that much?or are they talking about holidays within the uk now that sterling has fallen so much My parents were talking about holidays entirely outside the UK - they don't pay to 'holiday' in the UK (they stay in my house and my brothers house a couple of times a year when we are holiday). Basically, they have well funded pensions and the savings were a 'backup', they now see that being eroded and want to use it before any more disappears. The other thing my Dad was talking about was going back to growing his own veg - they have a fairly big garden and have some experience (which got me into Allotments). Quote Link to comment Share on other sites More sharing options...
EmpiricalBear Posted March 5, 2009 Share Posted March 5, 2009 The BoE prints money all the time - this is just a biiger version of it. It's not that big though, given what is happening. +1 Quote Link to comment Share on other sites More sharing options...
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