Flight From Euro Underway On Downgrades

[Realistbear]

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7964328/Fresh-flight-to-Swiss-franc-as-Europes-bond-strains-return.html

Fresh flight to Swiss franc as Europe's bond strains return

The Swiss franc has surged to an all-time high against the euro on capital flight from the eurozone after Irish, Greek, and Portuguese bonds came under renewed fire.

By Ambrose Evans-Pritchard

Published: 5:25PM BST 25 Aug 2010

5,267,423 Comments

The Swiss National Bank appears to have abandoned efforts to halt the appreciation of the Swiss franc. Photo: Getty Yields on 10-year Swiss bonds fell to 1.02pc as investors flocked into the ultimate safe-haven asset, now outperforming gold.

No country in the developed world apart form Japan has ever seen 10-year yields drop below 1pc

. Rates remained significantly higher during the two great depressions of the 1870s and the 1930s.

Its been a bit boring lately so a good old shakeup was overdue. The stress test fiasco obviously did not good at all in restoring confidence.

Euro's anyone? No thanks.

[Traktion]

Morgan Stanley said investors are taking a risk buying sovereign bonds at this level, arguing that debt-to-GDP ratios in the developed world greatly understate the true liabilities and aging costs that threat public finances. "It’s not whether governments will default, but how, and vis-a-vis whom," said Arnaud Mares in a client report.

So, what are people going to consider holding more of when they start defaulting admitting they are defaulting (via the printing press)? I suppose the Euro countries don't even have that choice, so hair cuts all round?

Edited August 26, 2010 by Traktion

[ken_ichikawa]

Why do you constantly bang this drum of deflation?

Bread could be £10000 and you'd say deflation. We have inflation.

[Bloo Loo]

Why do you constantly bang this drum of deflation?

Bread could be £10000 and you'd say deflation. We have inflation.

bread isnt 10,000, if anything its cheaper than last year by a few coppers.

And thats WITH energy bills and council taxes, and VAT UP.

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

Food inflation is heading skywards - farmers across the UK have been tackling mass thefts of hay, etc., due to lack of fodder due to terrible year for grass growth - meat prices heading strongly up, wheat prices heading up...

[Mega]

Another attempt to break the EURO...........but China got its back............the Anglo-saxon's are the ones to be broken.

mike

[ken_ichikawa]

definitions ken,definitions.we have rising prices but the broader money supply is deflating.

The problem is broad money is an accounting trick (fraud), therefore all you are destroying is imaginary money which never existed in the first place.

The problem is more and more promises are being made and more and more promises cannot be fulfilled therefore requiring this to be made good (i.e. printers) which is uber inflationary.

Edited August 26, 2010 by ken_ichikawa

[Injin]

definitions ken,definitions.we have rising prices but the broader money supply is deflating.

Is it?

[the_duke_of_hazzard]

bread isnt 10,000, if anything its cheaper than last year by a few coppers.

And thats WITH energy bills and council taxes, and VAT UP.

RPI hasn't risen in two months.

[Injin]

RPI hasn't risen in two months.

hmm tasty moustache wax and beverly hills cop video tapes.

nom nom nom.

[ken_ichikawa]

RPI hasn't risen in two months.

What has an index got to do with inflation?

[azogar]

bread isnt 10,000, if anything its cheaper than last year by a few coppers.

And thats WITH energy bills and council taxes, and VAT UP.

hmm, no cheaper for me, but granted, different shops / brands, etc. so we are both possibly correct

i wonder how long until the wheat price rises come into effect though?

[Alan B'Stard MP]

The problem is broad money is an accounting trick (fraud), therefore all you are destroying is imaginary money which never existed in the first place.

The problem is more and more promises are being made and more and more promises cannot be fulfilled therefore requiring this to be made good (i.e. printers) which is uber inflationary.

Now I understand why you can't find a job in your chosen profession.

[Alan B'Stard MP]

Is it?

I believe it's still rising...?

...and of course the actual breakdown of holdings is completely hidden by the headline figure.

Edited August 26, 2010 by Alan B'Stard MP

[South Lorne]

bread isnt 10,000, if anything its cheaper than last year by a few coppers.

And thats WITH energy bills and council taxes, and VAT UP.

..and wheat shortage...so far.....

[Injin]

I believe it's still rising...?

...and of course the actual breakdown of holdings is completely hidden by the headline figure.

Afaik the indexes, money supply and broad money are all still rising.

Our deflationista friends like to point to a fall in the rate of growth though. Either they are very poor thinkers or are relying on poor thinking in enough of their audience or something.

After all, if people don't expect inflation you can put add two squillion quid to the economy and nothing will alter.

[R K]

the SNB have burned some serious cash trying to stop the tide.

santayana anyone?

Particleman trailed this trade quite some time ago. Mismatch overwhelming the swissie.

Well done him.

[RufflesTheGuineaPig]

Why do you constantly bang this drum of deflation?

Bread could be £10000 and you'd say deflation. We have inflation.

Bi-Flation.

[@contradevian]

Now I understand why you can't find a job in your chosen profession.

Bankf Of England economist?

Theres life in the old € yet.

Edited August 26, 2010 by Sir John Steed

[the_duke_of_hazzard]

Afaik the indexes, money supply and broad money are all still rising.

Our deflationista friends like to point to a fall in the rate of growth though. Either they are very poor thinkers or are relying on poor thinking in enough of their audience or something.

After all, if people don't expect inflation you can put add two squillion quid to the economy and nothing will alter.

http://www.wolfbane.com/rpi.htm

I like facts too. If you think the index is fiddled, please state why. I'll assume you've read all the documentation concerning how it's compiled, freely available from the BoE website.

[Injin]

http://www.wolfbane.com/rpi.htm

I like facts too. If you think the index is fiddled, please state why. I'll assume you've read all the documentation concerning how it's compiled, freely available from the BoE website.

Oh okay, one index isn't showing rises.

No problem with that.

As for it being a fiddle, the idea of the index itself is the fiddle.

[Alan B'Stard MP]

being a bad economist is surely no barrier to being an accountant?

Being a bad accountant is a barrier to being an accountant.

[Injin]

Being a bad accountant is a barrier to being an accountant.

pfft, just make it up as you go along and collateralise it.

[ken_ichikawa]

Being a bad accountant is a barrier to being an accountant.

Why don't you run it through a DR and CR T account?

Run it through a collateralised loan and you'll notice it doesn't balance from the point of view of the bank. Unless you double count something. This is the big kicker and the fraud and the trick.

Edited August 26, 2010 by ken_ichikawa

[Traktion]

Oh okay, one index isn't showing rises.

No problem with that.

As for it being a fiddle, the idea of the index itself is the fiddle.

Agreed. If less people spend their money, the price indexes will tend to go down. If more people spend their money, the price indexes will tend to go up. They are as much about people's attitudes to spending and borrowing money (confidence and supply/demand for goods) than anything else.

That's not to say the indexes aren't useful for gauging the state of the economy, but they're not a measure of base money inflation or of credit inflation as such. They're a decent short term measure of the propensity to spend, I suppose.

IMO, this is one of the reasons why people point at the indexes and go 'where is the inflation then?' - it is waiting in the wings, for when sentiment changes, which could be either more confidence or panic (baked beans and tin foil prices may then rocket! ).

Edited August 26, 2010 by Traktion