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RichM

Kaletsky, Times, 7/11/2005

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This is scary stuff...obviously no concern whatever for environmental considerations and an intention to pursue what's good for American consumers with no concern for anybody else.

Also this inflation targetting, so that people have stable inflation expectations going into the future. I'm beginning to think that this expectation of stability is a major cause of asset inflation and excess spending (spending total earnings or more, even, by having a negative savings rate, as America has at the moment) because it looks like a risk-free environment; you can always be sure that any little local difficulties will result in central bank intervention to prop it all up.

Be careful what you wish for - ? Perhaps long-wished for stability in inflation is a major causal factor in instability in asset markets. What do others think?

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This is scary stuff...obviously no concern whatever for environmental considerations and an intention to pursue what's good for American consumers with no concern for anybody else.

Also this inflation targetting, so that people have stable inflation expectations going into the future. I'm beginning to think that this expectation of stability is a major cause of asset inflation and excess spending (spending total earnings or more, even, by having a negative savings rate, as America has at the moment) because it looks like a risk-free environment; you can always be sure that any little local difficulties will result in central bank intervention to prop it all up.

Be careful what you wish for - ? Perhaps long-wished for stability in inflation is a major causal factor in instability in asset markets. What do others think?

Not to mention the moral side. The US (and to a much lesser extent Uk/Australia) are the good guys because they are prepared to soak up all the 'excess' production by consuming it and running deficits.

Imagine a latter-day Dickens reworking the old Micawber quote;

Annual Income 20,000 pounds, Annual Expenditure 20,500, Result: virtuous consumption.

Annual Income 20,000 pounds, Annual Expenditure 19,500, Result: underconsumption and unnecessary savings surplus.

Doesn't ring true, somehow.

Edited by ajh

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  • 301 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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