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Realistbear

Brown Urged To Print Money As Economy, Er, "recovers"

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http://www.bloomberg.com/apps/news?pid=206...id=a284I1VDpGWU

Pound Falls as Lobby Group Urges BoE to Extend Asset Purchases

By Gavin Finch

July 7 (Bloomberg) -- The pound fell against the dollar for a fourth day, its longest losing streak since April, after the British Chambers of Commerce recommended the Bank of England expand its asset-purchase program to revive the economy.

The U.K. currency also weakened against the yen, euro and Swiss franc after the Chambers of Commerce said an economic recovery “is not guaranteed,†and the central bank should extend its program to the full 150 billion pounds ($243 billion) authorized by Chancellor of the Exchequer Alistair Darling and it should seek permission to spend even more.

This “may weigh on the pound,†a team of analysts at Royal Bank of Scotland Group Plc wrote in a research report today. The Bank of England is likely to extend quantitative easing through to its quarterly August inflation report on Aug. 12, RBS said.

The pound declined to $1.6190 as of 7:46 a.m. in London, from $1.6286 yesterday, the first time it dropped for four consecutive days since April 10. It weakened to 85.97 pence per euro, from 85.85 pence..../

So, according to the BCC today the recession is over and everything is going back to "normal" with house prices soaring and estate agents being rehired? If the "recovery" is dependent on further stimulus (printing) the pound will sink like a stone, IR will soar and our credit rating will join the pound on the way down. To think that the worst recession, as evidenced by the soaring levels of unemployment,* will be over before it has even begun is pure and unadulterated Nulabour proganda ahead of a general election. An attempt to keep the plates spinning long enough to keep Brown in power.

___________________________

*example:

http://www.bloomberg.com/apps/news?pid=206...id=a2MI3aqRtKPs

July 7 (Bloomberg) -- Michael Page International Plc, the U.K.’s second-largest recruitment company, said second-quarter profit fell 45 percent as the recession continued to stifle demand for jobs.

Edited by Realistbear

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Guest KingCharles1st

We must be the world's laughing stock by now :angry:

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Reality check for those who think the recession is already over allowing the thing that caused it, house prices, to rise against a backdrop of economic collapse:

http://www.bloomberg.com/apps/news?pid=206...id=aEVdnjdCm1W0

By James "Jim" Neuger

July 7 (Bloomberg) -- The world’s most affluent nations will take decades to work off the biggest buildup in debt since World War II. The political costs may be permanent, laid bare at this week’s Group of Eight summit of leading industrial powers.

Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, more than triple the 35 percent of the main emerging economies including China, the International Monetary Fund forecasts.

___________________

not forgetting:

http://news.bbc.co.uk/1/hi/business/8125898.stm

The UK economy contracted 2.4% in the first quarter of 2009, a decline not exceeded in 51 years, according to the latest official data.

Edited by Realistbear

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http://www.bloomberg.com/apps/news?pid=206...id=a284I1VDpGWU

Pound Falls as Lobby Group Urges BoE to Extend Asset Purchases

By Gavin Finch

July 7 (Bloomberg) -- The pound fell against the dollar for a fourth day, its longest losing streak since April, after the British Chambers of Commerce recommended the Bank of England expand its asset-purchase program to revive the economy.

The U.K. currency also weakened against the yen, euro and Swiss franc after the Chambers of Commerce said an economic recovery “is not guaranteed,†and the central bank should extend its program to the full 150 billion pounds ($243 billion) authorized by Chancellor of the Exchequer Alistair Darling and it should seek permission to spend even more.

This “may weigh on the pound,†a team of analysts at Royal Bank of Scotland Group Plc wrote in a research report today. The Bank of England is likely to extend quantitative easing through to its quarterly August inflation report on Aug. 12, RBS said.

The pound declined to $1.6190 as of 7:46 a.m. in London, from $1.6286 yesterday, the first time it dropped for four consecutive days since April 10. It weakened to 85.97 pence per euro, from 85.85 pence..../

So, according to the BCC today the recession is over and everything is going back to "normal" with house prices soaring and estate agents being rehired? If the "recovery" is dependent on further stimulus (printing) the pound will sink like a stone, IR will soar and our credit rating will join the pound on the way down. To think that the worst recession, as evidenced by the soaring levels of unemployment,* will be over before it has even begun is pure and unadulterated Nulabour proganda ahead of a general election. An attempt to keep the plates spinning long enough to keep Brown in power.

Sorry RB, I'm missing something.

Bloomberg quote the BCC saying that economic recovery is not guranteed, and then you state that the BCC claim "everything is going back to normal...." I can't reconcile this with the quote. I've googled for the BCC saying house prices are going to soar, or that estate agents are being rehired. I can't find it, although I do find references to the BCC saying the economy remains fragile and quotes such as "a risk that the economy could "drop off suddenly" and the UK could be heading towards a "W-shaped" recession".

Please would you post the link to where the BCC say things are going to soar. One of my interests is collecting such reporting discrepancies in different media.

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Sorry RB, I'm missing something.

Bloomberg quote the BCC saying that economic recovery is not guranteed, and then you state that the BCC claim "everything is going back to normal...." I can't reconcile this with the quote. I've googled for the BCC saying house prices are going to soar, or that estate agents are being rehired. I can't find it, although I do find references to the BCC saying the economy remains fragile and quotes such as "a risk that the economy could "drop off suddenly" and the UK could be heading towards a "W-shaped" recession".

Please would you post the link to where the BCC say things are going to soar. One of my interests is collecting such reporting discrepancies in different media.

bbc headline

http://news.bbc.co.uk/1/hi/business/8137424.stm

Worst of the recession 'is over'

The worst of the UK's recession is over, according to the British Chambers of Commerce (BCC) business group

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surely it's good news for britain

more exports (or what is left of export industry) , fewer imports

the first monthly trade surplus since 1997? :lol:

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The worst of the UK's recession is over, according to the British Chambers of Commerce (BCC) business group

once you have no manufacturing left, how much worse can it get?

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One of things you'd need to purchase to kick start manufacturing is machine tools. We don't make those any more so the cost of putting in place a modern manufacturing plant is going UP with a decreasing pound.

Besides there are no new facilities or land available for which manufacturing would be economic, the brownfield sites have covered in ticky tacky lending boxes and what remains is still obscenely expensive. There is going to be no manufacturing renaissance as a result.

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Guest KingCharles1st
One of things you'd need to purchase to kick start manufacturing is machine tools. We don't make those any more so the cost of putting in place a modern manufacturing plant is going UP with a decreasing pound.

Besides there are no new facilities or land available for which manufacturing would be economic, the brownfield sites have covered in ticky tacky lending boxes and what remains is still obscenely expensive. There is going to be no manufacturing renaissance as a result.

What actually happens is that when people close, or are forced into receivership, the accountants may quite possibly sell off 100k of toolmaking machinery for 2-5K

This is then bought by people in China- who enjoy making things so they can export them to the West

Great innit

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Guest DissipatedYouthIsValuable
once you have no manufacturing left, how much worse can it get?

Hungry shoeless unwashed, uneducated children grabbing hold of your jacket as you exit Waitrose with provisions purchased using your generous final salary pension. The bodyguards throwing them out of the way to clear a path to your bulletproof, airconditioned 4WD as you drive back to your gated mansion, replete with surveillance.

In a lonely corner of the supermarket carpark, a small boy, thrown down by your goons, spleen unprotected by his feeble ribs and ruptured by the fall, dies piteously while other street children rob him of his meagre belongings.

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What actually happens is that when people close, or are forced into receivership, the accountants may quite possibly sell off 100k of toolmaking machinery for 2-5K

This is then bought by people in China- who enjoy making things so they can export them to the West

Great innit

True, then why not buy this stuff up - because it is uneconomic in the UK, but it makes financial sense in the China becuase of costs - space and employees.

The sort fo equipment that would need to be purchased is probably way beyond any level that investment starved UK manufacturers can afford - even more so with the 30%+ fall in the pound against the manufacturing nations. Good job banks - spruced up the costs and starved the real economy.

The Bankrupt of England are expecting manufacturing to come back. Most have never done a days productive work in their life and know nothing about running a business or investing their own money in anything productive. They will be proven to be spectacularly wrong about their assertions regarding a falling pound healing the wound.

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Sorry RB, I'm missing something.

Bloomberg quote the BCC saying that economic recovery is not guranteed, and then you state that the BCC claim "everything is going back to normal...." I can't reconcile this with the quote. I've googled for the BCC saying house prices are going to soar, or that estate agents are being rehired. I can't find it, although I do find references to the BCC saying the economy remains fragile and quotes such as "a risk that the economy could "drop off suddenly" and the UK could be heading towards a "W-shaped" recession".

Please would you post the link to where the BCC say things are going to soar. One of my interests is collecting such reporting discrepancies in different media.

Its all part of the "inference" that is, the worst is over. It hasn't begun.

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One of things you'd need to purchase to kick start manufacturing is machine tools. We don't make those any more so the cost of putting in place a modern manufacturing plant is going UP with a decreasing pound.

Since any viable business requires that turnover exceeds costs, and assuming that most manufactured items are (eventually) exported, it follows that the weak pound provides an overall benefit - more is gained through making cheaper exports than is lost through buying more expensive imported tools. Otherwise manufacturing in countries with weak currencies would never get off the ground in the first place.

Besides there are no new facilities or land available for which manufacturing would be economic, the brownfield sites have covered in ticky tacky lending boxes and what remains is still obscenely expensive. There is going to be no manufacturing renaissance as a result.

My understanding was that there is quite a lot of brownfield land that could easily be made available (can't find a link to an article to back myself up I'm afraid)

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Time for the next £150 billion of QE. This time all 150 should go to funding the fiscal deficit, instead of just 100 like last time.

I wouldn't worry too much about the national debt yet.. its only at ~50% of gdp. Japan is at 200% of gdp and they decided to increase their QE this year.

What the government should be doing is more than just QE though. In this period it should be addressing why manufacturing is leaving the UK.. instead of thinking of new laws that will further drive out manufacturing. Like new carbon taxes and even more regulations and bureaucracy. The usual excuses of high labour costs don't really add up, considering how much German and French manufacturing have grown with even higher labour costs.

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Time for the next £150 billion of QE. This time all 150 should go to funding the fiscal deficit, instead of just 100 like last time.

I wouldn't worry too much about the national debt yet.. its only at ~50% of gdp. Japan is at 200% of gdp and they decided to increase their QE this year.

The average Japanese person has millions of Yen sitting in the post office or banks, this is the money that the Japanese government borrows and pays a tiny interest rate on. The average amount of savings per household is probably around 15 million Yen (100k Gbp.) (please feel free to look it up and prove me wrong!)

On the other hand, most British people have housing equity....

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Hungry shoeless unwashed, uneducated children grabbing hold of your jacket as you exit Waitrose with provisions purchased using your generous final salary pension. The bodyguards throwing them out of the way to clear a path to your bulletproof, airconditioned 4WD as you drive back to your gated mansion, replete with surveillance.

In a lonely corner of the supermarket carpark, a small boy, thrown down by your goons, spleen unprotected by his feeble ribs and ruptured by the fall, dies piteously while other street children rob him of his meagre belongings.

Doesn't sound too bad. I am the one in the 4WD with the bodyguards though, right?

Time for the next £150 billion of QE. This time all 150 should go to funding the fiscal deficit, instead of just 100 like last time.

I wouldn't worry too much about the national debt yet.. its only at ~50% of gdp. Japan is at 200% of gdp and they decided to increase their QE this year.

They also have an export economy and a nation of savers. Contrast and compare. Besides, when you add in all the off the books crap, I'm pretty sure our debt/GDP is over 100% and climbing.

What the government should be doing is more than just QE though. In this period it should be addressing why we are in the position where we have to print our own money to balance our bloated books.

Fixed that for you.

Completely agree RE the manufacturing though.

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