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Interest Rates Need To Rise Globally - Bis

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http://uk.reuters.com/article/2011/06/26/uk-interest-rates-idUKTRE75P0WC20110626

Global interest rates must rise to avoid high inflation becoming entrenched, the Bank for International Settlements said on Sunday.

It also warned that delaying deficit cuts could risk intensifying the sovereign debt crisis and have grave consequences were investors to lose confidence in a major economy such as the United States.

"With the arrival of sharper price increases for food, energy and other commodities, inflation has become a global concern," the BIS said in its annual report.

"Tighter global monetary policy is needed in order to contain inflation pressures and ward off financial stability risks."

http://www.bis.org/about/board.htm

Board of Directors

Christian Noyer, Paris (Chairman of the Board of Directors)

Masaaki Shirakawa, Tokyo (Vice-Chairman)

Ben S Bernanke, Washington, DC; Mark Carney, Ottawa; Agustín Carstens, Mexico City; Luc Coene, Brussels; Mario Draghi, Rome; William C Dudley, New York; Philipp Hildebrand, Zürich; Stefan Ingves, Stockholm; Mervyn King, London; Jean-Pierre Landau, Paris; Baron Guy Quaden; Brussels; Fabrizio Saccomanni, Rome; Jean-Claude Trichet, Frankfurt am Main; Paul Tucker, London; Jens Weidmann, Frankfurt am Main; Nout H E M Wellink, Amsterdam; Zhou Xiaochuan, Beijing

How nice all 3 which have allowed central banks to fund deficit spending are on the board of the BIS who now want interest rates to raise. Mystic Merv needs to tell them all it's only wage inflation that counts.

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Isn't it funny how all the pundits in the UK and that Bunteresque buffoon King argue that low interest rates are vital for our export trade and without them we would all turn into marshmallows and come to a sticky end.

Yet despite those low interest rates of over 4 years, manufacturing still hasn't surged ahead and growth is moribund yet over in Paddyland, which has to endure a rate 3x that of ours, they have achieved a positive growth rate and are now officially out of recession.

Incredible isn't it?

Could this mean that a piddling devalued £ isn't the way to go and all those billions of £ stagnating in moribund deposit accounts are actually being wasted when they could be achieving a return sufficient to improve consumption and improving growth.

But of course no one in the world could possibly be right if their opinions don't accord with that fat Bunter who, in his dotage, is sounding more and more like Greenspan by the day.

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http://uk.reuters.com/article/2011/06/26/uk-interest-rates-idUKTRE75P0WC20110626

http://www.bis.org/about/board.htm

How nice all 3 which have allowed central banks to fund deficit spending are on the board of the BIS who now want interest rates to raise. Mystic Merv needs to tell them all it's only wage inflation that counts.

The huge loose monetary expansion both currently and previously, (especially since 2003), has been perpetrated to shield the UK and its populous from the unaffordable true debt rates. This will change but when is my question, and to who's real benefit is the suspense of reality?

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that fat Bunter who

Bunter is the polite version of what I call him, as do many ex-pats for whom he has made living abroad very costly, and many savers whose income he wiped out - ironically the very people who were a safe engine of retail spending and doubtless their inactivity made things worse. If they're anything like me, his almost blackmailing savers and STRs to spend will have prompted the very opposite reaction. Now they're inflating but the wheels are coming off so they may need to cancel that little lark

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How nice all 3 which have allowed central banks to fund deficit spending are on the board of the BIS who now want interest rates to raise. Mystic Merv needs to tell them all it's only wage inflation that counts.

:)

All 3? Not all three, every single one of them!!!

The statement can be interpreted in two ways:

1 - they're fools who know nothing, they are warning the central banks (themselves...) that the interest rates they themselves set are too low. Ah ah ah what fools, they haven't got a clue what they are doing.

2 - They're keeping an eye on things and are making themselves heard. They're on the ball so we shouldn't worry about this because being the central bankers central bank, they'll do something if things get out of hands. So no need to start writing to our MPs or protest in front of the Bank of England or anything, it's all taken care of. We can get back to sleep.

Propaganda 101 says #2 is the correct interpretation: we are being played.

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Option 3:

They have inflated the base money supply to rebalance the system, and realise they need to do more of this. However, this risks a sudden explosion in the credit money supply, which would need to be controlled via interest rates.

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Option 3:

They have inflated the base money supply to rebalance the system, and realise they need to do more of this.

That's the base premise of two.

However, this risks a sudden explosion in the credit money supply, which would need to be controlled via interest rates.

Yes, hence the reassuring noise. Remember that when making this announcement these people are telling themselves :). The publicity is aimed at keeping quiet the mass of cash and bondholders who are being robbed in broad daylight by these very central bankers. By keeping them quiet and content they avoid having to raise interest rates which is the last thing they want to do. :):):)

Edited by _w_

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2 - They're keeping an eye on things and are making themselves heard. They're on the ball so we shouldn't worry about this because being the central bankers central bank, they'll do something if things get out of hands. So no need to start writing to our MPs or protest in front of the Bank of England or anything, it's all taken care of. We can get back to sleep.

Propaganda 101 says #2 is the correct interpretation: we are being played.

They do say "must rise" rather than "should rise if". Not saying you're wrong, I don't know, but they do speak in the present tense if the news release was faithfully relayed. IF!

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Another bunch of idiots who don't know what they are talking about. Or maybe this is another play on the sheeple to manage inflation expectations so rates can stay low for even longer.

Significantly higher rates without massive money printing would result in default of most western countries. End of.

People calling for rate rises have got so much money they don't factor in the majority population of western countries who are drowning in debt and struggling even with very low rates.

Maybe rates will be up to 3% (doubt it) within the next 5 years and they will say that counts as rates having to rise fast!

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BIS-ing in the wind:

Pissing-into-the-windW1.jpg

[Edit, that was an image of a person pissing in the wind, removed by the swear filter. Link here if you really need to double check:

http://www.*****sinthenews.co.uk/wp-content/uploads/2010/12/Pissing-into-the-windW1.jpg

]

Ofc this is mainly a message to the EMs, since even zirp won't accelerate growth in the west. The BIS want EMs to tighten (which requires fiscal retrenchment AND interest rate rises, just one won't do).

The main idea here is to try and contain EM consumer demand so the rest of the west can go back to their old ways.

Silly, really.

Edited by scepticus

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In the FT it is reported as them saying that economic growth 'must slow'.

There's a lot of 'talking in tongues' going on here... coupled with a fair amount of intentional ambiguity.

"Economic Growth must slow" -- do we mean that it is imperative that monetary or fiscal policies adapt to slow economic growth? What exactly do we mean by "Economic growth" in this context - are we talking GDP or some more meaningful metric? Do we really mean that economic growth is a pipe-dream and the figures we like to show growth soon won't? Are any of those figures relevant?

I think the BIS statement is a little easier to interpret. The central banks need to quash inflationary expectations - and the way to do that is to suggest raising rates without actually raising them. The BIS can do this because it doesn't actually set any rates... it can sow the seed of doubt on forever-near-zero interest rates and thus keep demand in check. Personally, I don't think that the statement demonstrates anything other than that there is considerable pressure both to keep interest rates very low to avoid mass bankruptcies - and to raise interest rates to keep commodity prices in check -- to avoid mass bankruptcies. There isn't much realistic space in which to manoeuvre - the only real option is bold statements from authoritative sounding organisations who are not required to implement the proposals they make.

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There's a lot of 'talking in tongues' going on here... coupled with a fair amount of intentional ambiguity.

"Economic Growth must slow" -- do we mean that it is imperative that monetary or fiscal policies adapt to slow economic growth? What exactly do we mean by "Economic growth" in this context - are we talking GDP or some more meaningful metric? Do we really mean that economic growth is a pipe-dream and the figures we like to show growth soon won't? Are any of those figures relevant?

I think the BIS statement is a little easier to interpret. The central banks need to quash inflationary expectations - and the way to do that is to suggest raising rates without actually raising them. The BIS can do this because it doesn't actually set any rates... it can sow the seed of doubt on forever-near-zero interest rates and thus keep demand in check. Personally, I don't think that the statement demonstrates anything other than that there is considerable pressure both to keep interest rates very low to avoid mass bankruptcies - and to raise interest rates to keep commodity prices in check -- to avoid mass bankruptcies. There isn't much realistic space in which to manoeuvre - the only real option is bold statements from authoritative sounding organisations who are not required to implement the proposals they make.

Yup, that. I do think there is an element of desperation in that the BIS knows the EMs will do what they damn well please.

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There's a lot of 'talking in tongues' going on here... coupled with a fair amount of intentional ambiguity.

I think there's a lot of blind panic here.

It's interesting that the BIS would come out with such a one-sided statement as 'interest rates must go up'. You would imagine they would say 'one one hand, if interest rates stay low... on the other, if they rise, these are the risks... the risks are finely balanced etc.

Noop - none of that - they are crapping themselves about a global loss of confidence in all bonds/currencies (towards gold, silver, anything not printable), and critically away from paper currencies and bonds. If that happens on a big enough scale, then it's hyper-inflation for all paper currencies, as everyone gets rid of them in minutes, hours and days, as fast as they can, and then they will be worthless.

It's really clear that they wanted to be VERY clear that this isn't a finely balanced argument. They don't even make the arguement. They just want to make paper currencies yield something to make them attractive to hold, stop printing, otherwise it's game over.

The BIS has decided that a great depression now, massive austerity with higher interest rates is a better outcome (for their banking buddies at least) than this pointless 'can-kicking until I'm out of office / something comes up' that is going on at the moment.

Edited by sesim

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I think there's a lot of blind panic here.

It's interesting that the BIS would come out with such a one-sided statement as 'interest rates must go up'. You would imagine they would say 'one one hand, if interest rates stay low... on the other, if they rise, these are the risks... the risks are finely balanced etc.

Noop - none of that - they are crapping themselves about a global loss of confidence in all bonds/currencies (towards gold, silver, anything not printable), and critically away from paper currencies and bonds. If that happens on a big enough scale, then it's hyper-inflation for all paper currencies, as everyone gets rid of them in minutes, hours and days, as fast as they can, and then they will be worthless.

It's really clear that they wanted to be VERY clear that this isn't a finely balanced argument. They don't even make the arguement. They just want to make paper currencies yield something to make them attractive to hold, stop printing, otherwise it's game over.

The BIS has decided that a great depression now, massive austerity with higher interest rates is a better outcome (for their banking buddies at least) than this pointless 'can-kicking until I'm out of office / something comes up' that is going on at the moment.

Won't happen as it helps the prudent amongst us.

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I think there's a lot of blind panic here.

Noop - none of that - they are crapping themselves about a global loss of confidence

They know they can't control inflation and once that genie is out the bottle it's almost impossible to get back in again. Yet this appears to be what global govts want.

I think they are more fearing the populace discovering they can make their own money and that the people really don't need the bankers.

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They know they can't control inflation and once that genie is out the bottle it's almost impossible to get back in again. Yet this appears to be what global govts want.

I think they are more fearing the populace discovering they can make their own money and that the people really don't need the bankers.

people can't manufacture their own money. They can manufacture and trade their own debt.

Money is manufactured from debt, not vice versa.

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people can't manufacture their own money. They can manufacture and trade their own debt.

Money is manufactured from debt, not vice versa.

The current fiat monetary system is manufactured from debt, money is whatever people make it.

64.jpg

Money can be anything, it isn't linked to debt or manufacturing of goods.

Edited by interestrateripoff

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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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