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grjack

Boe Is The Gilt Market, Underpinning Low Rates

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Its a shame that this has already disappeared onto p2, so here is a free bump.

Summary :

Starts out well with....

UK is the most leveraged country in the world per capita

UK government is simply spending its way out. (Govt borrowing is still rising)

BoE is monetising the entire goverment debt

There will be a sovereign debt crisis and inflation will be the result

Unfortunately, the last twenty or so pages of the report are just standard goldbug stuff.

I think I have now positioned my assets optimally by buying a house that I can work on with a small net debt, mortgage linked to base rate (+1.69%) but savings linked to RPI (+1%) tax-free. I now just have to work out what to do with my pension which is still mostly in sterling and whithering away.

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The left hand is borrowing from the right hand. Scroll through the slide show. Chapter and verse,the UK is worse than Spain by any measure, worst in the world by some measures. Note Slide 28 "BoE becomes the gilt market".

http://www.businessinsider.com/ben-davies-presentation-2011-11#-16

What a pile of crap. Had to scroll through 46 slides before the author introduces his new fund. The whole thing is a sales pitch. Growth and inflation will erode the US debt over the coming decades. This Johnny Come Lately to the Gold bubble is just further proof that it hasn't got much further to run. Hyperinflation my **** - When will the comedy turn to tragedy?

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What a pile of crap. Had to scroll through 46 slides before the author introduces his new fund. The whole thing is a sales pitch. Growth and inflation will erode the US debt over the coming decades. This Johnny Come Lately to the Gold bubble is just further proof that it hasn't got much further to run. Hyperinflation my **** - When will the comedy turn to tragedy?

Sorry to ruin your day. I posted this because I see many people say they cannot understand why the fundamentals are so bad yet the bond prices are relatively low. I was not aware that all people knew the BoE was surreptitiously THE gilt market. Hinde Capital's numbers are either right or wrong, but I do agree that their gold sales pitch is weak, I know nobody here needs a gold sales pitch.

I in order to "erode" the US's total debt of about 360% of GDP, via inflation they will have to inflate pretty much to zero, in a competitve devaluation death spiral with the rest of the world. Currently the US credit mountain is worth $55Trillion, and that represents multiple claims on a fractionally smaller real asset base. That credit mountain falling is DEFLATION, and in order to offset that entire collapse(without overshoot)they will have to create $55Tn in new cash, and then they have just broken even and only swapped one debt based instrument for another. Even if they only swap 2/3rds that is still a huge number. Savers and pensions gone many times over. The profligate stealing from the prudent.

As for growing their way out of it. Their peak GDP was about 3-4% more than their current GDP, and that was in a false fiancial sector/housing bubble. That debt of 360% of GDP was measured during the bubble(See PIMCO talking about that number at least 3 years ago, it is probably more now). So how much GDP do you need to get and how is that going to be achieved , to grow your way out of the debt and sooner than within 2 or 3 generations or more ?

The UK is in far worse trouble, our total debt is at least 466% of GDP. Bust in all but name.

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  • 312 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%



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