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Time To Reflect - 2

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There were so many replies its taken a while to coordinate some thoughts. But here you go.

CrashCon: There is nothing wrong in my mind about inflation targeting - if the purpose is to balance the growth of money supply and expansion of the economy. Are you suggesting the mechanism, not the principle, is at fault? If so, there is no doubt that our rulers have some funny peculiar ideas about how to measure our wealth and output.

Scepticus: The graph of debt as a function of GDP is interesting but doesn't tell the whole story and I suspect the ratio is somewhat meaningless because of the way GDP is measured. If you start by looking at the absolute debt in today's money the picture is very different. You will see that the curve of gross debt is parabolic up to 2000 and then goes exponential under Bush and Greenspan. The catalyst is low interest rates and supply side fiscal policies. Ask your self if you really believe that during the period from 2000 to 2011 the economy really grew at an exponential rate. It would certainly have to if you are to believe the curve of debt/gdp. I live in the USA and can tell you it's bunkum - since moving here, all I have seen is decline in infrastructure, public services, real wages, manufacturing, etc. and Americans know it. Of course, if yo look at the wealth distribution curves you will see the rich are a lot richer today. So perhaps CrashCon is correct, perhaps the mechanics of measuring GDP are being distorted.

Overall - still lay the blame for this mess at the feet of Wall St and the Fed. Their willingness to inflate the economy using liquidity and low interest rates caused bubbles all over the world. I can still recall a comment by Greenspan who chided the ECB about its' high interest rates and slow Eurozone growth. Greenspan must have had other motives. Of course, InterestrateRipoff is right in that Government was complicit, but you only have to watch the lobbying in Washington and London to know how poisonous politics has become: Wall St. simply buys the policy it wants, and the wants of a few determine policies that affect us all:

http://zfacts.com/p/1170.html

Krugman is correct in some regards. The banks have issued vast amounts of Bonds at low rates. These bonds will collapse in value as interest rates rise and we're at the start of a terrifying feedback cycle where QE / loose money supply causes inflation which forces central banks to raise base rates, which reduce the yield on bonds and simultaneously increases mortgage defaults which trigger a second crisis in the ABX market (CDOs/ CMOs). The later results in recession and the need for more QE and loose money supply.

trick5t3r: you have it about right. We should all be asking this. After Peter Mandelson was sacked for having taken 350k GBP from a 'friend' he somehow manages to buy a flat on Trafalgar Square on an MPs salary!!! Where did the money come from? Corporations and large funds are buying favors and justice.

Thanks to TiredofWaiting! I have just finished reading Peter Mandelson's memoirs. Some 2/3rds of the book repeatedly highlights what a self-centered, ignorant, devious and vain person Gordon Brown was. It also makes it clear he was the cause of Britain's woes with policies designed to invest in Britain being nothing more than an attack on the youth of our country. His tax, and borrow, and spend, policies have ruined the country.

No comment on the elephant!

Thanks Chicken Little - looks like we have similar thoughts.

The report 'Verdict on the Crash' seems to me to be little more than self-serving twaddle. Most (perhaps all) of the authors are lightweights. And note, they undermine their own case within the first few pages by stating that stricter regulation would not work. By that do they mean the banks would still find loopholes, and still act immorally - would they still seek to create the likes of CDOs and CMOs - special vehicles for exporting US mortgage debts to the EU and Asia via investment banks in London and Frankfurt? The Banks behaved immorally with filth like 'Fabulous Fab' as evidence of how low people in finance have become. The problem stems from the bonus culture which they insist is needed to compete with each other!! This goes back to the argument above that the Reagan-Bush era 'supply side policies' are the root cause of our woes. Contrast that with say German government policies which built the worlds finest industrial base and kept house prices low.

(BTW - Fu-uk me Injin and Lepista you need to get a life!)

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Thanks to TiredofWaiting! I have just finished reading Peter Mandelson's memoirs. Some 2/3rds of the book repeatedly highlights what a self-centered, ignorant, devious and vain person Gordon Brown was. It also makes it clear he was the cause of Britain's woes with policies designed to invest in Britain being nothing more than an attack on the youth of our country. His tax, and borrow, and spend, policies have ruined the country.

(...)

You are very welcome.

( But did I recommend Peter Mandelson's book?! I don't remember that. Actually I find him one of the scariest persons alive! :ph34r: )

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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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