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Calling All Sadists - Blanchflower: Rates Must Be Held Until 2013

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They will try but whether they will succeed is a different matter ,I get the feeling { mainly from the amount of how fecked we are stories in the MSM over the last month or so} the pressure is building from the outside

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They will try but whether they will succeed is a different matter ,I get the feeling { mainly from the amount of how fecked we are stories in the MSM over the last month or so} the pressure is building from the outside

doesn't matter what we do, we'll position ourselves between the FED and the ECB, cut the deficit a bit to keep the middle squeezy, maybe do a bit more QE here and there and perhaps move rates around betwen 0.25 and 1.25 and before you know it it'll be 2021!

The thing is, since zirp implies that the economy will never deleverage below its peak debt capacity, nothing much is going to change.

Won't stop a nice little decline of 10-20% in real estate though - maybe a bit more.

That'll get reversed though when the EMs really tighten and all that money comesback, so keep an eye out for the bottom. Blink and you'll miss it.

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Indeed!

Thing is though, squeezing the middle is going to squeeze the banks too. The outlook for bank profits with stagnant and declining lending is extremely poor, no matter how much QE there is. In fact this is already happening.

It'll be interesting to observe the shareholder meetings when the last of the profits are put forward as 'talent retention' initiatives.

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doesn't matter what we do, we'll position ourselves between the FED and the ECB, cut the deficit a bit to keep the middle squeezy, maybe do a bit more QE here and there and perhaps move rates around betwen 0.25 and 1.25 and before you know it it'll be 2021!

The thing is, since zirp implies that the economy will never deleverage below its peak debt capacity, nothing much is going to change.

Won't stop a nice little decline of 10-20% in real estate though - maybe a bit more.

That'll get reversed though when the EMs really tighten and all that money comesback, so keep an eye out for the bottom. Blink and you'll miss it.

this post reads as numbers on a spreadsheet completely ignoring sociology sceps.

they wish it was that easy.

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this post reads as numbers on a spreadsheet completely ignoring sociology sceps.

Fair point bendy but the sociology takes more words and always draws a tedious response from Injin. I don't ignore sociology at all, in fact my blog is mainly about that, and derives the numbers from that.

Anyway, we have a nice case study with japan.

Look out, here comes the sociology:

Try forgetting about money for a moment. If there ain't no growth then the average joe can't expect to get a yield on a given average asset can he?

The individual players in the so called 'market' might indivudually want nice high yields and interest rates and write articles on tinternet saying how terrible it is they can't have them, but collectively they can't all succeed and as a group they will therefore default to taking whatever they can get, which will increasingly trend to zero. In particular, those who want no risk at all (savers in insured bank deposits) will get less than nothing.

No amount of revolutions or policies or bond vigiliantes or save our savers nonsense will magic up a yield where none actually exists in reality. Revolutions don't lead to high interest rates, they lead to neative interest rates. History is with me on this point. Therefore I predict society as a whole will suck it up, just like the japanese have for 25 years.

I might be wrong, but at least there's a method to my madness.

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What will happen in 2013??

They are really clutching at straws now.

2013 ? I guess some crazy preacher must be saying the end of the world will happen, so they're just stalling until then :D

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Guest spp

Music to my ears! B)

Negative real rates to infinity, GO!!!

The sad problem being...the working and lower middle class will/are getting fcuked!

Wake up!!!!!!!!!!!!

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Guest spp

2013 ? I guess some crazy preacher must be saying the end of the world will happen, so they're just stalling until then :D

We know who they are...and they know we are coming for them! :D

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Every time they make such statements it just confirms that the UK economy is in a far worse state than even the Japanese economy turned out to be going back those 20 years or so (and still struggling) - far far far far worse.

Things are so bad and it's most likely so much UK debt and UK borrowing etc is so off balance sheet and still hidden, in the style of Enron and Greece etc, that in 20 years time in 2031 the likes of Blanchflower will be saying "Rates must be held until 2033.

That is if the crazies at the BoE still have the interest rate job.

Edited by billybong

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Guest spp

Scept - I think you are full of shite. You disagree for the sake of it. No red team/blue team here...wake up!

The whole financial system is a fraud...how the hell can you make an argument!?

edit: with Injin

Edited by spp

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Every time they make such statements it just confirms that the UK economy is in a far worse state than even the Japanese economy turned out to be going back those 20 years or so (and still struggling) - far far far far worse.

Things are so bad and it's most likely so much UK debt and UK borrowing etc is so off balance sheet and still hidden, in the style of Enron and Greece etc, that in 20 years time in 2031 the likes of Blanchflower will be saying "Rates must be held until 2033.

That is if the crazies at the BoE still have the interest rate job.

We are in a mess. 300 year low interest rates potentially holding for 5 years! That is fecked up.

One problem we have now is a chancellor who seems to want to take whatever route he chooses leaving the BoE to pick up the pieces. Problem is the BoE have nowere to go.

The UK government debt off balance sheet is not the key worry. We are talking PFI (scary at £200bn but not unmanageable) and public sector pension liabilities funded from cash flow (again manageable) as they are in many other countries.

What is more worrying is what off balance sheet debts financial insitutions have. That is where the next big feck up is coming from.

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We are in a mess. 300 year low interest rates potentially holding for 5 years! That is fecked up.

One problem we have now is a chancellor who seems to want to take whatever route he chooses leaving the BoE to pick up the pieces. Problem is the BoE have nowere to go.

The UK government debt off balance sheet is not the key worry. We are talking PFI (scary at £200bn but not unmanageable) and public sector pension liabilities funded from cash flow (again manageable) as they are in many other countries.

What is more worrying is what off balance sheet debts financial insitutions have. That is where the next big feck up is coming from.

You were WARNED years ago...GOLD and SILVER!

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We are in a mess. 300 year low interest rates potentially holding for 5 years! That is fecked up.

One problem we have now is a chancellor who seems to want to take whatever route he chooses leaving the BoE to pick up the pieces. Problem is the BoE have nowere to go.

The UK government debt off balance sheet is not the key worry. We are talking PFI (scary at £200bn but not unmanageable) and public sector pension liabilities funded from cash flow (again manageable) as they are in many other countries.

What is more worrying is what off balance sheet debts financial insitutions have. That is where the next big feck up is coming from.

It's the totally hidden (to date) unadmitted and secret off balance sheet UK government debt that's still to emerge that's very much a concern. According to bankers GS, in selling the idea to Greece, just about every country has been doing that and every country has that and it's just a matter of time, how and when it's discovered and revealed.

Edited by billybong

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  • 284 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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