Jump to content
House Price Crash Forum
gruffydd

Newsnight Tonight - Seltzer, Tett, Hutton

Recommended Posts

Tett (FT), Hutton, Seltzer.

Completely doom-laden coverage

Seltzer said everyone would end up inflating their way out, mentioned fiat money, etc.

Tett very negative about prospects for EU, bailout working.

Hutton said we're on the edge of a second financial crisis.

General agreement contagion couldn't be stopped.

My question is this. How can you inflate your way out without (1)Causing currency and economic wars, perhaps worse (2)Squeezing already super-squeezed consumers so much that consumer spending, the driver of western economies, gives up the ghost.

Surely the only way to get out of this death spiral is through wage inflation. Globalisation means we don't and won't see that.

This is looking increasingly alarming. Look, I'm no economist, though I did study economics at university. I just can't see how Seltzer's only solution to the current crisis will work? HOW?

Share this post


Link to post
Share on other sites

Hutton started to say something about our house prices but his brain appeared to trip over his mouth and it didn't come out as he rapidly moved on to say something else.

Yeah, Hutton was pointing out that there's no way to stop house prices falling because of all the economic imbalances - I think he was trying to suggest falls would be dramatic but Paxo cut him off.

Share this post


Link to post
Share on other sites

Well, well, well.... Fiat currencies inflating their way out of debt, people loosing faith in their belief in the curencies, where did I hear all this before? Years ago...Right here in the goldbug camp that was dismissed by the cash is king brigade.

Share this post


Link to post
Share on other sites

Well, well, well.... Fiat currencies inflating their way out of debt, people loosing faith in their belief in the curencies, where did I hear all this before? Years ago...Right here in the goldbug camp that was dismissed by the cash is king brigade.

It was a bit like a HPC commentary from a few years ago. Made me laugh.

Share this post


Link to post
Share on other sites

Not any more. We're going to have a period of global inflation.

It's all fiat currency. It's all based on fresh air and promises. If investors won't buy your debt, feck em. Print the stuff. It's already happened in a relatively small way. It's going to happen in a big way.

But will incomes keep up with inflation or will they be eroded further. I suggest the latter.

Share this post


Link to post
Share on other sites

Trade barriers, trade war, cold war would solve this problem.

Alas, it would create an Asian USSR and we all might nuke each other in 50 years times.

Unless, of course, you believe that it will be all a front with the super-rich of the US and China pulling the strings from behind the bamboo and fast food curtains.

Share this post


Link to post
Share on other sites

Trade barriers, trade war, cold war would solve this problem.

Alas, it would create an Asian USSR and we all might nuke each other in 50 years times.

Unless, of course, you believe that it will be all a front with the super-rich of the US and China pulling the strings from behind the bamboo and fast food curtains.

Can you imagine the endless wars for resources. Doesn't bear thinking about.

Share this post


Link to post
Share on other sites

I think you may be running the risk of assuming 'globalisation' (as is) will continue (as is).

The surplus countries do not have some sort of divine right for this to happen.

We'll see rebalancing, shrinking surpluses (with concomittant deficits) and some degree of reversal of the last 20 years.

It's inevitable - the only real question is what form this will take.

Inflation (modest or otherwise) is but one path. China may deploy its reserves in the West (use them or lose them) and/or the US may do it for them via tariffs etc.

Looking at it purely from the Western debt side is like focusing on the Yin and ignoring the Yang. As a whole the system 'balances' - just not in the right places.

Share this post


Link to post
Share on other sites

I think you may be running the risk of assuming 'globalisation' (as is) will continue (as is).

The surplus countries do not have some sort of divine right for this to happen.

We'll see rebalancing, shrinking surpluses (with concomittant deficits) and some degree of reversal of the last 20 years.

It's inevitable - the only real question is what form this will take.

Inflation (modest or otherwise) is but one path. China may deploy its reserves in the West (use them or lose them) and/or the US may do it for them via tariffs etc.

Looking at it purely from the Western debt side is like focusing on the Yin and ignoring the Yang. As a whole the system 'balances' - just not in the right places.

you mean not in the places you would like them to!

Share this post


Link to post
Share on other sites

If the indebted countries try to inflate their way out of debt, but wage inflation does not keep up with price inflation, then surely this will just make the situation worse.

Can anyone explain how wages will be inflated in an economy where businesses are struggling, inflation reduces profit margin and there is lots of extra capacity due to high unemployment???

Share this post


Link to post
Share on other sites

A good dose of wage inflation at 5% per annum for 10 years will sort the mess, yes, but can you really see the nominal wage at say £55k in ten years. Debts remain constant, wages increase costs increase, we are no richer, but we can restart the debt boom again?

Who gains, because someone at teh top must gain, otherwise why?

For me yes wage inflation above cost inflation but more importantly haircuts on all investment vehicles.............

Edited by Panda

Share this post


Link to post
Share on other sites

There has been no wage inflation for the last ten years during which we had the boom, why will there be wage inflation now?

We will have inflation of fuel,food,etc but not wages. No credit and no wage inflation means no hpi, but subdued economy and underwater home 'owners' means the continuation of the stagnant housing market for the forseeable future. No one can afford to sell and no one can afford to buy. People are going to have to start dying off before their properties hit the market, assuming their relatives don't just move in themselves instead.

Slow grind down, make do and mend, homelessness, hunger, poverty. No social mobility. If you haven't made your nest already, you need to leave. There was never going to be a happy ending for any of us from this mess, but if you'd have capitulated and bought something you couldn't afford within the last few years you'd be in a much worse state.

At least us renters can leave. We're the lucky ones. Where to go?

Share this post


Link to post
Share on other sites

Not any more. We're going to have a period of global inflation.

It's all fiat currency. It's all based on fresh air and promises. If investors won't buy your debt, feck em. Print the stuff. It's already happened in a relatively small way. It's going to happen in a big way.

Nailed it there ... but unfortunately some just don't get it.

Yeah, we're going to see deflation as bank after bank collapses taking down the money supply and hence the economy in a death spiral because there is absolutely no way, no way whatsoever I'm telling you, that governments would resort to simply printing money out of thin air to get themselves and the banks out of trouble (or so they imagine) ... :lol:

The only deflation is going to happen as money takes its time to slosh around the economy. That means a rapid rise in lower order consumer goods prices and a relatively muted drop in higher order capital goods. There will be a house buying window but sooner or later prices of everything will be rocketing (as has already begun).

Share this post


Link to post
Share on other sites

Nailed it there ... but unfortunately some just don't get it.

Yeah, we're going to see deflation as bank after bank collapses taking down the money supply and hence the economy in a death spiral because there is absolutely no way, no way whatsoever I'm telling you, that governments would resort to simply printing money out of thin air to get themselves and the banks out of trouble (or so they imagine) ... :lol:

The only deflation is going to happen as money takes its time to slosh around the economy. That means a rapid rise in lower order consumer goods prices and a relatively muted drop in higher order capital goods. There will be a house buying window but sooner or later prices of everything will be rocketing (as has already begun).

Wages sky rocketting, i just do not see it, sorry, i agree but we will get poorer, very little wage infaltion..............

There has been no wage inflation for the last ten years during which we had the boom, why will there be wage inflation now?

We will have inflation of fuel,food,etc but not wages. No credit and no wage inflation means no hpi, but subdued economy and underwater home 'owners' means the continuation of the stagnant housing market for the forseeable future. No one can afford to sell and no one can afford to buy. People are going to have to start dying off before their properties hit the market, assuming their relatives don't just move in themselves instead.

Slow grind down, make do and mend, homelessness, hunger, poverty. No social mobility. If you haven't made your nest already, you need to leave. There was never going to be a happy ending for any of us from this mess, but if you'd have capitulated and bought something you couldn't afford within the last few years you'd be in a much worse state.

At least us renters can leave. We're the lucky ones. Where to go?

Yes in agreement, its what i see............................

Share this post


Link to post
Share on other sites

What about Aussie style stimulus cheques, say everyone gets GBP 5,000 in the post? Or if you want to keep some wealth imbalances, everyone gets a "tax refund" of 50% of the income tax that they paid last year. You can print and push up spending power without directly lifting wages. It's a one off so would work its way through the system. Some would use the cash to pay down debt, others would spend it stimulating the economy. The GBP would be devalued relative to other currencies encouraging exports.

Share this post


Link to post
Share on other sites

What about Aussie style stimulus cheques, say everyone gets GBP 5,000 in the post? Or if you want to keep some wealth imbalances, everyone gets a "tax refund" of 50% of the income tax that they paid last year. You can print and push up spending power without directly lifting wages. It's a one off so would work its way through the system. Some would use the cash to pay down debt, others would spend it stimulating the economy. The GBP would be devalued relative to other currencies encouraging exports.

Real money printing, not shuffling, you outline giving money out for free, not a chance, suffer now, that would be inflationary............

Share this post


Link to post
Share on other sites

Real money printing, not shuffling, you outline giving money out for free, not a chance, suffer now, that would be inflationary............

Money given out "for free. Two examples:

Australia: http://www.news.com.au/breaking-news/first-bonus-payments-in-bank-tomorrow/story-e6frfku0-1225697325961

USA: http://en.wikipedia.org/wiki/Economic_Stimulus_Act_of_2008

GBP 5,000 per UK taxpayer (about 26million people) would 'cost' about 130 Billion. Not a problem for the magical QE presses at the Bank of England.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.