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Would A Genuine Economic Recovery Not Be Good News?

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I can imagine rates being held artificially low for a long while yet, regardless of inflationary consequence. House price growth will remain a key priority.

Edited by Turnbull2000

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The UK government is printing money.

The UK national debt is spiralling to levels never seen before, all on a public sector and bailout splurge.

We have 40% of our working population on pension promises, where not 1 penny is set aside to fund this, a truly unique situation in the world.

Interest rates are set at 0.5%, a situation that has 12 months to run at the most.

We have 3 months of mortgage company data, on historically low turnover figures, showing marginal increases. ZZZZZZZZZZ

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I can imagine rates being held artificially low for a long while yet, regardless of inflationary consequence.

If you mean commanded rates ("base rates"), then there is every chance of "decoupling", i.e. what a soviet commander demands may not be compatible with how the bond market sees things: it can riot at a point. As I understand the anecdotal evidence suggests rates have already been going up for mortgages in the UK, or?

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I can imagine rates being held artificially low for a long while yet, regardless of inflationary consequence. House price growth will remain a key priority.

I think none of the problems have been solved. Only postponed. They are creating more distortions in the economy, larger imbalances. They are creating a new bubble in government debt. The last time they raised rates they burst the bubble. I think with more debt issuance and bigger deficits, it will become very difficult to push interest rates up with very negative consequences.

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I think none of the problems have been solved. Only postponed. They are creating more distortions in the economy, larger imbalances. They are creating a new bubble in government debt. The last time they raised rates they burst the bubble. I think with more debt issuance and bigger deficits, it will become very difficult to push interest rates up with very negative consequences.

+1

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There cannot be a recovery yet. Too soon. No 'proper' solutions have been implemented. Cracks have been papered over.

They've been putting low quality fuel in the fuel tank for far too long. The engine has coughed and spluttered and nearly stalled. We should have drained the tank, took the engine apart, cleaned everything up with a toothbrush and insisted on high grade fuel ongoing. Instead, they've just half filled the tank to keep us going- the shits still there, swirling around the tank, the engines still running poorly and this extra strain might just blow it.

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I think none of the problems have been solved. Only postponed. They are creating more distortions in the economy, larger imbalances. They are creating a new bubble in government debt. The last time they raised rates they burst the bubble. I think with more debt issuance and bigger deficits, it will become very difficult to push interest rates up with very negative consequences.

Good point, I am starting to think that rates will be low for years to come unless inflation does start to take hold. We could of course be heading for the double-dip: HOW exactly is the economy going to cope without ultra low IR's and QE? Anyone got any ideas?

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