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Charlie The Tramp Returns

Bank Of England Governor Mervyn King Calls For 'grand Bargain' On Global Imbalances

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The Telegraph

In a speech to the Stanford Institute for Economic Policy Research in California, Mr King called for a reformed International Monetary Fund (IMF) to lead international cooperation so a path towards a more sustainable global economy can be found.

The global imbalances, where "surplus" countries relied too heavily on exports while "deficit" nations consumed too much, have been identified as the root cause of the financial crisis and ensuing recession. However, little has changed in the past few years.

Mr King said the issue is now critical as the threat of protectionism is rising. So far, emergency measures such as fiscal and monetary stimulus programmes have "simply postponed much of the required adjustment in spending patterns around the world". He added: "Long-term real interest rates are unsustainably low."

Too true Mervyn. :rolleyes:

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have been identified as the root cause of the financial crisis and ensuing recession

Tw@t, you spent the best part of your tenure ensuring the above happenened, pricing the UK out of comeptition and providing the free credit that posioned this country's economy and boosted imports from countries that did not concentrate on stimulating consumer demand, land and building prices and overall costs with copious gobs of debt.

Edited by OnlyMe

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The Telegraph

Too true Mervyn. :rolleyes:

Don't know. 20 year TIPS (Inflation protected bonds) in the US are yielding only about 0.5%, 0.3% if you bought last week, lower now than they were in 2004. I'd like to see comparative yields for the UK before making any judgement.

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Tw@t, you spent the best part of your tenure ensuring the above happened,

Well he had to follow the little Red Book of Brown to ensure his Tenure as Governor was extended by a further 5 years increasing his final pension beyond the dreams of ordinary working people. ;)

Scottie, beam me back to the 1960s and 1970s, at least the ordinary man/women ( must not be sexist :D ) knew where they stood in difficult times as that was the time when my financial success was at its greatest. ;)

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have been identified as the root cause of the financial crisis and ensuing recession

Tw@t, you spent the best part of your tenure ensuring the above happenened, pricing the UK out of comeptition and providing the free credit that posioned this country's economy and boosted imports from countries that did not concentrate on stimulating consumer demand, land and building prices and overall costs with copious gobs of debt.

I'm sure we will have another speech where he bemoans the failure to raise interest rates in 2011.

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"The main lesson from the experience of the imbalances is that national policy frameworks alone were unable to prevent domestic demand from growing at an unsustainable rate," he said.

:lol::lol::lol::lol:

What "national policy frameworks" were those then. The liar loan and fraud framework, the nil regulation framework, the not meet the inflation target framework, the bigger the bank bonus the better framework, the bailout framework, the everything's unexpected framework, the dodgy rating framework, the increase domestic demand at all costs framework, the cpi manipulation framework, the borrow and spend like there's no tomorrow framework ......

Come on, there was no attempt "to prevent domestic demand from growing at an unsustainable rate", growth in domestic demand was actively encouraged year after year.

Edited by billybong

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And what's really funny is that he still refuses to raise UK interest rates

Increasing rates would depress the UK's spending, so fewer imports would be sucked into our living dead service economy. Reduced import expenditure would reduce our current account deficit

Merv takes us for idiots

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And what's really funny is that he still refuses to raise UK interest rates

Increasing rates would depress the UK's spending, so fewer imports would be sucked into our living dead service economy. Reduced import expenditure would reduce our current account deficit

Merv takes us for idiots

If you think less spending is the answer wouldn't it be better to increases tax's instead?

personal I think Merv is quite a good governor and has been quite out spoken against the banks. I think a lot of people on here will criticise him what ever he says or does.

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If you think less spending is the answer wouldn't it be better to increases tax's instead?

personal I think Merv is quite a good governor and has been quite out spoken against the banks. I think a lot of people on here will criticise him what ever he says or does.

Of course...he is a MAN after all.

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Bloo loo what's has happened to your face? :o

Im going into Diversity...Its HUGE in the public sector...much bigger than I realised and much more than many posters here would think.

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The Telegraph

Too true Mervyn. :rolleyes:

Spot on Merv.

Chinese don't care, so we may as well cut to the chase and get the cap controls in place whilst we still have an economy, such as it is.

Practically speaking I can't see anything much happening before the US get a grip, tax their offshore corporates and stick tariffs on surplus country exports. Then we can follow suit.

Current system has been f*cked since Reagan.

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The Chinese have already said to the US and thus the ROW they will do things their way becuase whilst they might have the second largest economy in the world their GDP per capita is still very low compared to developed countries, so going back to nationalism and protectionism isnt really going to this planet any favours.

They are already encouraging internal consumerism but you cant switch these sorts of things on overnight, it takes time for the general populace to get the message, process it and change. Some adapt to change more quickly than others not to mention the problem of lack of education. We have the same problems here, some jobs have gone becuase its cheaper to outsource so those unemployed people need to up their game by re-educating themselves in a skillset thats relevent to today. And I dont buy the arguement thats its harder to learn the older you get, thats a psychological barrier that people put up themselves. When we were kids learning, we didnt know what was hard and what wasnt, its something invented to justify their inability to do well. If you can overcome this mindset you can adapt easily.

Take drivers of vehicles, give it another decade and I think you will start to see vehicles driving themselves. What is Bob Crow going to do then when there is no need for drivers on the underground for example? We already have driverless trains in various parts of the world. http://en.wikipedia.org/wiki/List_of_driverless_trains What about all the lorry drivers that will no longer be needed becuase a computer can do the job more safely than a human?

Its the rate of change in technology and the inability of the wider populace to adapt which will cause the problems. We already have to a lessor degree self serving shops beit a simple vending machine or self service tills and scanners in the supermarkets.

We dont really need high street bank branches any more as its possible to conduct transactions electronically right now but if you take someone like PayPal they have already set a precedent with their higher than credit/debit card processing fees if you use the paypal service, so any new emerging technology and service that can set a precendant with higher fees for their service will do well long into the future.

An interesting question to ask is why theres so much change when theres obviously no market driven need for it?

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Mr King said the issue is now critical as the threat of protectionism is rising. So far, emergency measures such as fiscal and monetary stimulus programmes have "simply postponed much of the required adjustment in spending patterns around the world". He added: "Long-term real interest rates are unsustainably low negative (corrected) ."

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It is great to see people start to get to the very heart of these issues.

But where do imbalances start and where do they end? Imbalances can occur between any two trading entities. Easy to spot when there are just two. But in a complex trading environment, it is not always so obvious as to who is holding the bag with whom - apart from when suddenly debt created by imbalanced trade is finally defaulted on...and usually this is sudden and triggered by a rise in interest rates.

When they went to 'globalisation', they effectively went from a relatively simple series of bi-partisan managed relationships, to what we would call a complex economy. What they haven't ever done is put in any rules whatsoever for running trade in a complex economy.

This in fact is no different to the type of complex economy that companies and individuals as trading entities exist in. Our governments run a series of measures from interest rates to inflation levels to taxation and transfer payments to try and keep some semblance of 'balance' within the economy and keep good order...but even here they are failing badly I think.

So, if that is the case, what tools do they have to manage globalised trade and which would be acceptable to all global 'citizens'?

I think you might just be suffering from a delusion of what the bank of england is for.

hint : it's a counterfeit ring. They couldn't give a toss as long as they get paid up handsomely.

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It is great to see people start to get to the very heart of these issues.

But where do imbalances start and where do they end? Imbalances can occur between any two trading entities. Easy to spot when there are just two. But in a complex trading environment, it is not always so obvious as to who is holding the bag with whom - apart from when suddenly debt created by imbalanced trade is finally defaulted on...and usually this is sudden and triggered by a rise in interest rates.

When they went to 'globalisation', they effectively went from a relatively simple series of bi-partisan managed relationships, to what we would call a complex economy. What they haven't ever done is put in any rules whatsoever for running trade in a complex economy.

This in fact is no different to the type of complex economy that companies and individuals as trading entities exist in. Our governments run a series of measures from interest rates to inflation levels to taxation and transfer payments to try and keep some semblance of 'balance' within the economy and keep good order...but even here they are failing badly I think.

So, if that is the case, what tools do they have to manage globalised trade and which would be acceptable to all global 'citizens'?

Trade is not the problem.

Trade is simple..If you want something from me, I suggest a price and you accept, or not, and pay..or not.

The problem comes when trade is FINANCED...prices in the supported economy rise as finance allows people to "afford" things they couldnt afford before.

CHina at first couldnt afford a western lifestyle, but FINANCE was put in place to build factories and take advantage of their 3rd world cost base of labour.

We now have a market in China that can afford our goods...sadly, China can make our goods too...and THEY dont need to borrow to pay for them.

Trade hasnt failed....FINANCE has failed.

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That is part and parcel of globalisation where people exchange their fiat. Previously you either went with barter (I'll swap you 50,000 bushels of wheat in exchange for a tractor) or limited gold money - if you ran out you couldn't buy unless someone was prepared to lend their gold to you...somehow this was more important than purchasing with endless fiat.

As soon as you start trading for fiat (that can be recycled into your economy an infinite number of times until you have nothing to sell) or using ordinary trade credit then you're into debts somewhere being associated with trade.

So I don't disagree with you - it's just that what you're saying is rather obvious. :)

to you and me maybe.....but to the comptrollers of the central banks...it wasnt so clear....Now..I have an excuse for not knowing why all this was happening in the run up to 2007...I didnt have the information or learning to understand it....I was told, as most are and still, there is a wall of money out there looking for a home, and that Globalisation is marvelous...

Mervyn King, and his ilk, do not have that excuse and either wilfully or negligently allowed the thing to blow up...now they are offering their solutions for something that they helped fail to prevent.

Of course, just about every globalist business that gets its kit built in a cheaper regime is contributing to the deflation of the British Economy.

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to you and me maybe.....but to the comptrollers of the central banks...it wasnt so clear....Now..I have an excuse for not knowing why all this was happening in the run up to 2007...I didnt have the information or learning to understand it....I was told, as most are and still, there is a wall of money out there looking for a home, and that Globalisation is marvelous...

Mervyn King, and his ilk, do not have that excuse and either wilfully or negligently allowed the thing to blow up...now they are offering their solutions for something that they helped fail to prevent.

Of course, just about every globalist business that gets its kit built in a cheaper regime is contributing to the deflation of the British Economy.

Whilst at the same time the bankrupt of england were doing everything they could to inflate the briitsh economy and run teh housing ponzi scheme at full tilt - which in iteself paid for and enoucraged even more production abroad. If Kunt is looking for some answers he should try looking in the mirror first.

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  • 276 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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