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Daz

Adam Posen Calls For Another Round Of Quantitative Easing And Insists The Bank Should Not Raise Interest Rates

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almost giving up hope with comments like this from a MPC member. Just wondering if he has an index linked pension and maybe numerous highly geared BTL's or perhaps doesn't have cash savings? just NSI index linked savings :)

I am no expert but surely printing more money will make inflation even worse????

http://www.guardian.co.uk/business/2011/mar/27/inflation-cuts-consumer-spending-mpc?INTCMP=SRCH

"Inflation will drop to 1.5% as cuts hit spending, MPC member predictsAdam Posen calls for another round of quantitative easing and insists the Bank should not raise interest rates"

Edited by Daz

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I'm not going to read the article because of the source. In my view, anyone who thinks that inflation is going to be high is either a fool or a salesman, neither of which can be trusted, or a DT writer. The collapse in CPI here and overseas is inevitable. Banks will keep on selling as much gold and silver as they can print to the foolish masses. :lol:

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I'm not going to read the article because of the source. In my view, anyone who thinks that inflation is going to be high is either a fool or a salesman, neither of which can be trusted, or a DT writer. The collapse in CPI here and overseas is inevitable. Banks will keep on selling as much gold and silver as they can print to the foolish masses. :lol:

I am neither a salesman, and hopefully not a fool either.

But by definition, inflation means an increase in the overall money supply, which has the net effect of lowering the value of each unit of currency, which can then result in price increases due to more money going chasing after more or less the same amount of real world goods and services. Of course, there is always the argument that because people will have less money to spend on goods and services that means that the cost of those goods and services will have to come down. Whilst this may be true of the hooker who sucks your knob off down the docks, it may not be true of core goods whose price is very much related to the cost of the raw materials used to make them. Perhaps it is much more likely that everyone will have less money to spend, but prices will rise as result of inflation (of the money supply) and all the resulting extra currency that is bidding after the raw materials in question, not to mention future markets trading also having the effect of pushing the prices up (as a result of freed up liquidity going on the hunt for real world investments that aint gonna blow up in someones face).

Anyways, there has been a huge increase in base money M0, supposedly to counter a big decrease in broad money (M4) from debts being defaulted upon or repaid, whilst the banks are shying away from creating new loans, however, all this extra M0 being pumped into the system is setting the system up for a period of potentially wild hyper-inflation, if/when confidence is restored to the system enabling the banks to restart rampant credit creation and go on the high risk investment trail once again. On the otherhand, if we dont experience another phase of rampant credit creation, the banks continue to hold on to the capital to buffer the slow deleveraging of the derivatives trade, and the trend for freed up liquid capital to go chasing commodites continues, thus pushing prices up their........ this will all result in a collapse in the CPI because?

I look forward to reading your explanation.

Edited by Retardstic

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Anything to keep nominal property values the UK afloat.

As goes house prices so goes the economy. They have no choice but to keep alive that which drives our economy.

We need a fresh vision for our economy, let the hpi leech die, and rebuild on the German model of high quality manufacturing.

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Clearly low inflation is a threat to govt projections.

High inflation at all costs.

Attempting the impossible: elimination of the economic cycle or, as Milton Friedman would have put it, avoiding the lunch bill.

Brown tried to do away with the cycle (boom and bust) and this current shower will have the same measure of success he had.

Inflation begets deflation and deflation eventually begets inflation and so the cycle goes on and on and on..........................................

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Attempting the impossible: elimination of the economic cycle or, as Milton Friedman would have put it, avoiding the lunch bill.

Brown tried to do away with the cycle (boom and bust) and this current shower will have the same measure of success he had.

Inflation begets deflation and deflation eventually begets inflation and so the cycle goes on and on and on..........................................

Please list all deflations of fiat money you know of that occured before full blown economic collapse and state failure.

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I am neither a salesman, and hopefully not a fool either.

But by definition, inflation means an increase in the overall money supply, which has the net effect of lowering the value of each unit of currency, which can then result in price increases due to more money going chasing after more or less the same amount of real world goods and services. Of course, there is always the argument that because people will have less money to spend on goods and services that means that the cost of those goods and services will have to come down. Whilst this may be true of the hooker who sucks your knob off down the docks, it may not be true of core goods whose price is very much related to the cost of the raw materials used to make them. Perhaps it is much more likely that everyone will have less money to spend, but prices will rise as result of inflation (of the money supply) and all the resulting extra currency that is bidding after the raw materials in question, not to mention future markets trading also having the effect of pushing the prices up (as a result of freed up liquidity going on the hunt for real world investments that aint gonna blow up in someones face).

Anyways, there has been a huge increase in base money M0, supposedly to counter a big decrease in broad money (M4) from debts being defaulted upon or repaid, whilst the banks are shying away from creating new loans, however, all this extra M0 being pumped into the system is setting the system up for a period of potentially wild hyper-inflation, if/when confidence is restored to the system enabling the banks to restart rampant credit creation and go on the high risk investment trail once again. On the otherhand, if we dont experience another phase of rampant credit creation, the banks continue to hold on to the capital to buffer the slow deleveraging of the derivatives trade, and the trend for freed up liquid capital to go chasing commodites continues, thus pushing prices up their........ this will all result in a collapse in the CPI because?

I look forward to reading your explanation.

Great post. There will be huge inflation in the next decade and the pound will fall considerably against most other currencies. There might be a considerable fall in house prices before that as well.

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Great post. There will be huge inflation in the next decade and the pound will fall considerably against most other currencies. There might be a considerable fall in house prices before that as well.

The plan is to have the pound fall in lockstep with the other currencies - so relative currency declines might not happen.

Currency measured against the loaf though....that's a given.

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Posen is the federal reserves' bitch on the mpc. Anything that makes the fed's economic incompetence look better and disguise their actions is good for the fed.

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Please list all deflations of fiat money you know of that occured before full blown economic collapse and state failure.

Its always in a state of flux. As of today there are powerful deflationary forces at work in 2 major areas of the economy: wages and house prices.

Japan is a classic example of wider, or macro-deflation, at work. Unless, of course, the Japanese statements to this effect are imaginary.

You cannot have constant inflation as that would defy all the laws of economics and deny the existence of the cyclical (deflation-inflation-deflation) nature of economies.

Even the Guardian seem to accept deflation as an economic possibility:

http://www.guardian.co.uk/business/2009/nov/20/japan-econony-deflation-recession

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>question avoiding cobblers<

Please list all deflations of fiat money you know of that occured before full blown economic collapse and state failure.

And if you can't find any* please stop posting about deflation.

*You can't and you know you can't, there haven't been any, ever.

Edited by Injin

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Great post. There will be huge inflation in the next decade and the pound will fall considerably against most other currencies. There might be a considerable fall in house prices before that as well.

sadly, firms wont be able to borrow in the main, as the inflation we are experiancing is the wrong type.

Its not yet down to money supply, its down to money supply growth in the US, the home of the World reserve curency.

while this dollar buys less and less, so our consumers and industry will have their margins crushed...prices to end users cant rise if they have no money spare at the end of the month.

Public Sector Unions are posing this very point....the cuts will hurt everyone....what they dont tell you if that they cut the waste in thepublic sector and cut tax, then the rest of the population WILL spend their money...but, they wont spend it on DIVERSITY, smoking sign detector teams and 215K salaries and bonuses for troughers.

We have reached a limit on borrowing....so what inflation is at 20%, if your salary cant match, your borrowing reach wont rise by 20% either....they already in the last 7 years pushed the borrowing reach to the limit with double incomes, PAYE on self cert, buy with a friend, Homebuy and lastly, Self cert on PAYE with homebuy and a friend with deposit from the Government and Bank of Grandma and Pa.

How about a firm buys or makes some stuff, sells it and grows from the profits? Is that such a bad idea?

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QUOTE INJUN

Please list all deflations of fiat money you know of that occured before full blown economic collapse and state failure.
And if you can't find any* please stop posting about deflation.

Japan may not have failed, yet, but most rational people would agree with them in so far as they have had deflation for many years.

Deflation is a simple concept and it is illogical to argue that there is no economic cycle in which periods of inflation followed by deflation occur. Brown believed he could eliminate the cycle and it seems you have taken this one step further in believing there is no cycle? Why even have the word "deflation" in the dictionary if it does not exist? Are the Japanese wrong in their assessment along with everyone else who sees deflation in that country? Papers have been written acknowledging deflation exists--

http://www.bis.org/publ/work186.pdf

http://eh.net/encyclopedia/article/siklos.deflation

If you cannot accept there is 2 sides to every argument you should not post about inflation?

*You can't and you know you can't, there haven't been any, ever.

Edited by Realistbear

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Please list all deflations of fiat money you know of that occured before full blown economic collapse and state failure.

And if you can't find any* please stop posting about deflation.

*You can't and you know you can't, there haven't been any, ever.

Did you miss the 'Japan' bit?

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Japan may not have failed, yet, but most rational people would agree with them in so far as they have had deflation for many years.

Just list the fiat money deflations that have occured before full blown economic collapse.

Exporting inflation in a carry trade stylee doesn't equal deflation.

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Please list all deflations of fiat money you know of that occured before full blown economic collapse and state failure.

And if you can't find any* please stop posting about deflation.

*You can't and you know you can't, there haven't been any, ever.

of course, we DO have deflation, but, as you rightly coined...Printy Printy........it wont happen and we will have collapse...when we could have had nasty times followed quickly by a recovery.

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As goes house prices so goes the economy. They have no choice but to keep alive that which drives our economy.

We need a fresh vision for our economy, let the hpi leech die, and rebuild on the German model of high quality manufacturing.

Good luck with manufacturing now we've built crap houses on all the available brown field sites.

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Good luck with manufacturing now we've built crap houses on all the available brown field sites.

House building has been low has it not? And the size of the plots has got smaller. And as I drive around the outskirts of Sheffield every day, all I see is old derelict works, or space where old derelict works once were and has now been flattened with sod all on it. And only about 6% of the UK is built on. I don't think space is a worry.

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I can't see why people still talk about deflation... talk of it has only ever been a scare tactic to justify ever looser monetary policy.

Surely we can accept now that inflation is the chosen path and that they are getting their wish.

Interest rate rises will only happen if inflation expectations rise further and out of the BoE's comfort zone, and by then, as usual, it will be too late.

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The problem for Adam Posen is that he told us this last year and was wrong and he told us this the year before and was wrong too...Perhaps he is trying for third time lucky!

Is inflation at 1% now like he and his friends on the MPC predicted?

Edited by JaneTracy

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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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