Jump to content
House Price Crash Forum
Sign in to follow this  
FreeTrader

Mervyn King Defends Quantitative Easing

Recommended Posts

Accused of not supporting SMEs with Qe money not being lent Benny Hill said it was nonsense.

I sought a loan this week to expand my business (and create 2 further jobs)and rate would now be between 3.45 aan 3.75 % above base. This would mean our risk and work would only reward the bank.

RESULT = no loan, no jobs created.

Share this post


Link to post
Share on other sites

Accused of not supporting SMEs with Qe money not being lent Benny Hill said it was nonsense.

I sought a loan this week to expand my business (and create 2 further jobs)and rate would now be between 3.45 aan 3.75 % above base. This would mean our risk and work would only reward the bank.

RESULT = no loan, no jobs created.

you mean they are actually charging a risk premium for credit extension, ooo how nasty

Share this post


Link to post
Share on other sites

Thx for the link

Mervyn's just confirmed that their actions are inflationary. He says SME's would be hit harder had they taken no action (long term Merv?).

I'm pretty sure an MP just said the Treasury will need to borrow £600Bns over next few years (on top of Bank's borrowings). Do you think our LT rates will rise? Er...

Share this post


Link to post
Share on other sites

you mean they are actually charging a risk premium for credit extension, ooo how nasty

Nope - expansion not extension.

We have successfully paid down the loan we had on our first business (at 1.5 over base) and would now take out another loan to set up the same type of business.

Share this post


Link to post
Share on other sites

he just admitted the devaluation of the currency was intentional/needed.

They aren't trusting his forward predictions, asking for a timeline on how inflation will get to 2% in a year

Edited by AteMoose

Share this post


Link to post
Share on other sites

Accused of not supporting SMEs with Qe money not being lent Benny Hill said it was nonsense.

I sought a loan this week to expand my business (and create 2 further jobs)and rate would now be between 3.45 aan 3.75 % above base. This would mean our risk and work would only reward the bank.

RESULT = no loan, no jobs created.

That doesn't seem unreasonable?

1% is probably their costs, so they're gambling on less than 1 in 40 companies to default to make a profit?

Actually, I really surprised it's that low. Is is secured against something?

Share this post


Link to post
Share on other sites

Nope - expansion not extension.

We have successfully paid down the loan we had on our first business (at 1.5 over base) and would now take out another loan to set up the same type of business.

you should consider that it is the BOE rate that is underpricing economic risk rather than the bank, (id have thought printing another 75Bn to supress rates should highlight that)

Share this post


Link to post
Share on other sites

That doesn't seem unreasonable?

1% is probably their costs, so they're gambling on less than 1 in 40 companies to default to make a profit?

Actually, I really surprised it's that low. Is is secured against something?

Yes - secured.

Look at the change though. In less than 5 yrs.

Last time I asked rate was less and is continuing to rise. Potential improvement in lifestyle is great and profit would be good so still tempted.

Life has been on hold for property prices to fall and nose to grindstone for too long. May as well use deposit money in business.

Share this post


Link to post
Share on other sites

http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html

10.30 Back to Sir Mervyn King at the House of Commons - he says whatever is decided at tomorrow's EU summit will not solve the region's underlying problems - it will only buy one or two years of breathing space...

President Sarkozy will have a new target for his rage...

Wow upto 24 months breathing space, he's feeling generous.

Share this post


Link to post
Share on other sites

Telegraph is reporting the following.

"10.30 Back to Sir Mervyn King at the House of Commons - he says whatever is decided at tomorrow's EU summit will not solve the region's underlying problems - it will only buy one or two years of breathing space... "

Does Merv suggest what is needed to resolve the underlying problems? I can only see bankruptcy as the solution, or is he suggesting anything else?

Share this post


Link to post
Share on other sites

Yes - secured.

Look at the change though. In less than 5 yrs.

Last time I asked rate was less and is continuing to rise. Potential improvement in lifestyle is great and profit would be good so still tempted.

Life has been on hold for property prices to fall and nose to grindstone for too long. May as well use deposit money in business.

Last time, if 5 years ago, everything in the garden was rosy, and they would lend to anyone who could "fog a mirror". That was not normality.

Normality is lending at a rate over the rate of inflation...

Share this post


Link to post
Share on other sites

"When we undertook the next round of asset purchases, we did it because we thought there were real risks of inflation looking ahead falling below the target and we wanted to offset that."

By this he means they printed more money because we think that inflation will go BELOW 2% in the future. I would have thought QE would have had the opposite effect?

Share this post


Link to post
Share on other sites

Mervyn King and Charles Bean are in front of the House of Commons Treasury Committee ...............

When I read the start of this thread I thought it was going to be a joke, when I read further I realised it is,... but not a funny one :unsure:

Edited by madpenguin

Share this post


Link to post
Share on other sites

The MPs are absolutely useless. No wonder Merv runs rings around them. It's like an adult talking to children – they're woefully uninformed.

To be fair a child could run rings around that pile of sh1te.

You'd imagine they might at least do some background reading.

Imagine the sh1t we'd be in if they were actually running the country!

Share this post


Link to post
Share on other sites

he just admitted the devaluation of the currency was intentional/needed.

They aren't trusting his forward predictions, asking for a timeline on how inflation will get to 2% in a year

Merv: Hard to come up with any reasonable argument as to why inflation will not fall sharply next year.

Well there's one right there, by AteMoose.

Only a liar would suggest that devaluing the currency wasn't going to have a knock on affect on the price of energy and the goods created using it.

Share this post


Link to post
Share on other sites

Merv getting angry at George Mudie – quite rightly so. He's way out of order – and wrong.

What's Georgie saying?

Share this post


Link to post
Share on other sites

Merv: Hard to come up with any reasonable argument as to why inflation will not fall sharply next year.

Oil was $100 a barrel in April but dropped 15%. Pump prices didn't drop. Yesterday oil went up 3.7% in a day. Today it has gone up another 2%. It's clearly going to be "unexpected" when fuel prices feed inflation in 2012

Then there is the extra 3p per litre fuel duty due Jan 2012

The detail of the Treasury's Budget Book spells out: 'The main fuel duty rate will increase by 3.02p per litre on 1 January 2012.' And there is another inflationary rise planned for next summer: 'The 2012-13 increase in fuel duty will be implemented on 1 August 2012

Read more: http://www.thisismoney.co.uk/money/cars/article-1716474/Budget-2011-Sting-in-the-tail-on-fuel-duty.html

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 277 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.