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Telegraph: U K Outlook Grim-Austerity A Myth

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http://www.telegraph.co.uk/finance/comment/liamhalligan/8224342/The-UK-inflation-genie-is-out-of-the-bottle.html

The UK inflation genie is out of the bottle
As 2010 draws to a close, it's becoming ever clearer that the UK's economic prognosis is not good.
During 2011, the British economy will suffer from rising inflation and sluggish (in some quarters, possibly negative) growth. This grim combination will be set against a
budgetary situation that can only be described as ghastly.
*
George Osborne was recently in New York, soaking up plaudits for boldly leading Britain into fiscal austerity at a time when, apparently in contrast, America's feckless political elite has allowed the national debt to balloon.
The problem is that UK austerity, so far at least, is a myth.

Agree with this assessment. The "cuts" have not really begun so that anyone would notice and we carry on spending and buying overpriced houses (maybe 20% off from peak) as if the crash had not happened.

2011 will be the year the bill for Gordon's lunch will be presented.

Want to buy a house this year but everyone is now on board with crash estimates ranging from barely nothing at 5% to a sheepish 15%. Academagictrix are alone is saying HPI is still with us.

____________________________________

* The pound headed for weekly declines against all 16 of its most-actively traded counterparts. Sterling reached a three- month low against the U.S. currency on Dec. 22 as the Office for National Statistics said gross domestic product rose 0.7 percent in the three months to September, below the initial estimate of 0.8 percent announced in October. Second-quarter growth was revised lower to 1.1 percent from 1.2 percent. The budget deficit swelled to a record and home-loan approvals dropped to the lowest since March 2009. http://www.bloomberg.com/news/2010-12-24/pound-strengthens-for-second-day-against-the-dollar-paring-weekly-decline.html

Edited by Realistbear

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printing for the government spend to keep "growth", and interest rate rises for the inflation.

garbage in, and garbage out.

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printing for the government spend to keep "growth", and interest rate rises for the inflation.

garbage in, and garbage out.

I'm going to do a WIKILEAKS.

The BoE and Government plan is as thus:

A Print money

If A fails go to B

B Go to A.

Harare here we come?

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Trouble is the 'left' has no answers either.

Their 'stimulus' hasnt created any jobs, all its done is created inflation for the poor. Its like the 70s stagflation episode all over again.

Albert Einstein once said, "The definition of insanity is doing the same thing over and over again and expecting different results".

Plan B is Plan A 2.0.

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Wouldn't expect anything else from a Lunatic right winger. Firstly most of the west knows that in our situation austerity won't work.

London may be seeing a recovery but the rest of the country is sinking. When the cuts finally hit in 2011, the north of England will sink into a deep recession.

For the telegrapgh to argue that there isn't austerity is right wing selfish ignorance. If they cut any more there would public revolt and almost certain change of government.

While this forum appears to be becoming a sounding block for the minority of right wing idiots, the majority of this country wants to preserve public services. They might want to cut waste and the greed of the chiefs, but they won't be happy when they start to see friends and familiy lose their jobs and services removed.

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Wouldn't expect anything else from a Lunatic right winger. Firstly most of the west knows that in our situation austerity won't work.

London may be seeing a recovery but the rest of the country is sinking. When the cuts finally hit in 2011, the north of England will sink into a deep recession.

For the telegrapgh to argue that there isn't austerity is right wing selfish ignorance. If they cut any more there would public revolt and almost certain change of government.

While this forum appears to be becoming a sounding block for the minority of right wing idiots, the majority of this country wants to preserve public services. They might want to cut waste and the greed of the chiefs, but they won't be happy when they start to see friends and familiy lose their jobs and services removed.

What 'cuts'?

What 'austerity'?

When the country stops borrowing money and importing more than it exports you can talk about 'cuts' and 'austerity'.

As for northern England manufacturing here is doing very well at the moment though with a lot of ground to recover after the disaster of the last few years.

And the public sector will still be spending at least as much but the 'executives', 'managers' and 'professionals' will make sure they get an ever increasing slice of the pie with front line workers getting less.

If Cameron and Osborne want to really help this country the best thing to do would be to take action against the parastical public sector high earners.

In fact they're the only people who can do it as Labour certainly wouldn't.

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Wouldn't expect anything else from a Lunatic right winger. Firstly most of the west knows that in our situation austerity won't work.

London may be seeing a recovery but the rest of the country is sinking. When the cuts finally hit in 2011, the north of England will sink into a deep recession.

For the telegrapgh to argue that there isn't austerity is right wing selfish ignorance. If they cut any more there would public revolt and almost certain change of government.

While this forum appears to be becoming a sounding block for the minority of right wing idiots, the majority of this country wants to preserve public services. They might want to cut waste and the greed of the chiefs, but they won't be happy when they start to see friends and familiy lose their jobs and services removed.

everybody would like them but we do not have enough money to pay for them. right now we are 13% in red every year .... you can not live on debt for ever ...

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I don't think the csr (comprehensive spending review ) period starts until financial year beginning apr'11 so imo a bit early to say its a myth. Happy to be proved wrong.

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I think he really missed the point here. I don't care a toss if a shopping trolley of food has gone from £100 last year to £105 this year. It's the 23 billion over spend last month that is the story here. If ever single person man women and child had to send a cheque of £350 to cover the over spend the money the government has borrowed for them on their behalf last month then a lot of people wouldn't have any money to buy anything making inflation unimportant.

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I think he really missed the point here. I don't care a toss if a shopping trolley of food has gone from £100 last year to £105 this year. It's the 23 billion over spend last month that is the story here. If ever single person man women and child had to send a cheque of £350 to cover the over spend the money the government has borrowed for them on their behalf last month then a lot of people wouldn't have any money to buy anything making inflation unimportant.

Quite.......easy money has to be paid for.

The poor they spoil it for the rich.

Edited by winkie

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everybody would like them but we do not have enough money to pay for them. right now we are 13% in red every year .... you can not live on debt for ever ...

We don't have to, tax the banks.....they are booming at the moment....tax them 90% on everything they earn. If they try and leave the country then arrest them and bang the lot in jail.....they'll soon change their tune..Time to bring out the big state stick on these greedy leeches.

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Wouldn't expect anything else from a Lunatic right winger. Firstly most of the west knows that in our situation austerity won't work.

If you think printing money in exchange for nothing productive activities will work then we can skip the middle man (those who leech off public sector)

by crediting, say half of that the major retailer, 'social' Landlords, Sky and China Central Bank account directly, do you think that will work then ?

For stimulus to work, the government 'demand' has to be directed the 'demand' at real investments (e.g. trains, power, proper education (e.g. the type if you fail your uni/

escape to work abroad, you are expected to pay it back double - which is about the same as a mortgage when the total repayment is about double the initial amount

if you get first class then free, second class 50%) ).

Of course, HMG is doing none of those.

The economy needs to be restructured. As it is, no fiddling whatsoever will work.

Austerity = budget surplus. UK is now having a 11%+ deficit? Austerity? You got to be joking.

Saying UK is in 'austerity' is like saying a company that Lost £150bn who now cut back and lost £130bn a year 'profitable'.

And you know.. it is not just UK has the technology to print money or to borrow and so far, no country has ever managed to borrow to prosperity.

Edited by easybetman

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Trouble is the 'left' has no answers either.

Their 'stimulus' hasnt created any jobs, all its done is created inflation for the poor. Its like the 70s stagflation episode all over again.

+ 1

And there is no alternative. We have borrowed too much. We are still borrowing.

And it looks like we will run out of credit before being able to land this "sucker" gently. It was all a matter of timing, but the coalition is landing it way too slowly. We will probably run out of fuel (credit/gilt buyers) before landing. We'll probably crash.

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We don't have to, tax the banks.....they are booming at the moment....tax them 90% on everything they earn. If they try and leave the country then arrest them and bang the lot in jail.....they'll soon change their tune..Time to bring out the big state stick on these greedy leeches.

And you call other people lunatics, ironic, Comrade.

Time for the liquidation of the banker class in the name of the dictatorship of the proletariat?

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+ 1

And there is no alternative. We have borrowed too much. We are still borrowing.

And it looks like we will run out of credit before being able to land this "sucker" gently. It was all a matter of timing, but the coalition is landing it way too slowly. We will probably run out of fuel (credit/gilt buyers) before landing. We'll probably crash.

I don't think we can run out of fuel when we can (and are) purchasing our own gilts. The bond market now = central banks funded with QE.

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I don't think we can run out of fuel when we can (and are) purchasing our own gilts. The bond market now = central banks funded with QE.

You can QE (print, inflate the money supply) only if (and as long) price inflation is low.

But inflating the money supply with QE will eventually inflate prices.

And once price inflation starts (like now) you can't QE any-more, because if you do, it will be increasingly difficult to find gilt buyers. The interest rates you would have to offer spirals upwards, very fast, and you have a sovereign debt/deficit crisis.

And if you then insists in even more QE you'd go Zimbabwe.

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You can QE (print, inflate the money supply) only if (and as long) price inflation is low.

But inflating the money supply with QE will eventually inflate prices.

And once price inflation starts (like now) you can't QE any-more, because if you do, it will be increasingly difficult to find gilt buyers. The interest rates you would have to offer spirals upwards, very fast, and you have a sovereign debt/deficit crisis.

And if you then insists in even more QE you'd go Zimbabwe.

You forget one important thing, the government can print money and buy its OWN bonds, exactly like they did in 2008/9.

A second bigger thing is that you can also fiddle the indexes. Remember the classic Injin quote?

"What does an index have to do with inflation?"

Hence the CPI will be filled with air and gravel for 364 days a year. Or the weightings will be adjusted so that people buy 1000 Ipods a year.

Edited by ken_ichikawa

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Wouldn't expect anything else from a Lunatic right winger. Firstly most of the west knows that in our situation austerity won't work.

London may be seeing a recovery but the rest of the country is sinking. When the cuts finally hit in 2011, the north of England will sink into a deep recession.

For the telegrapgh to argue that there isn't austerity is right wing selfish ignorance. If they cut any more there would public revolt and almost certain change of government.

While this forum appears to be becoming a sounding block for the minority of right wing idiots, the majority of this country wants to preserve public services. They might want to cut waste and the greed of the chiefs, but they won't be happy when they start to see friends and familiy lose their jobs and services removed.

I'm sorry, is this the same Dubsie that was singing the praises of the BNP about six month's before the last election?

When, precisely did your damascene conversion occur?

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You can QE (print, inflate the money supply) only if (and as long) price inflation is low.

But inflating the money supply with QE will eventually inflate prices.

And once price inflation starts (like now) you can't QE any-more, because if you do, it will be increasingly difficult to find gilt buyers. The interest rates you would have to offer spirals upwards, very fast, and you have a sovereign debt/deficit crisis.

And if you then insists in even more QE you'd go Zimbabwe.

Agree with Ken above.

Theres nothing to stop the gov carrying on printing and buying. One of the bonus points of QE is you get to sidestep the bond market entirely.

I can't see really bad inflation kicking in unless wages start to rise as well which at the minute they're not doing.

Stagflation all the way for me.

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Agree with Ken above.

Theres nothing to stop the gov carrying on printing and buying. One of the bonus points of QE is you get to sidestep the bond market entirely.

I can't see really bad inflation kicking in unless wages start to rise as well which at the minute they're not doing.

Stagflation all the way for me.

Not how the financial market works for the moment I am afraid. Once you do those 'QE', you will see traders dumping the Gilts and exchange

that into err...maybe RMB or properties etc. So, Gilt yield will rise. The government may be able to ignore those and get BoE to lend them at 0.01%

but the rest of the financial system will price off those 'open market' traded gilts. BoE can then of course start buying every series of the old gilts

to bring the 'yield' down but remember we are in at Fiat system where confidence is everything...

There is no law that says prices cannot rise if wages stays the same and there is no law that says average working person in the UK is entitled to afford anything either..

Otherwise, there won't be riots in the emerging market when prices of essential rise.

Edited by easybetman

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BoE can then of course start buying every series of the old gilts

to bring the 'yield' down but remember we are in at Fiat system where confidence is everything...

ah but you forget the international community. I.e. the USA prints £200bn and buys UK bonds, the UK prints £200bn and buys USA bonds! Thus even though they are ineffect buying their own bonds it doesn't look like they are doing this.

They then make a devil's pact deal with China, which china will like as it keeps the hot money OUT of their system, about restricting capital movements into China. At which everybody keeps on printing as before and M4 is reported in powers rather than numbers.

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  • 285 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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