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crashmonitor

Gdp Into Overdrive For Q4 At 5%+ Annualised

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I don't know what these GDP increases are measuring, but it isn't increased access to real resources by the UK population. My guess is it's probably a combination of inflation being recorded as growth and increased financialisation of economic activity that would have occurred anyway but which now requires a financial sector middleman.

Edited by Dorkins

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The Institute of Chartered Accountants is forecasting growth for Q4 at 1.3% or over 5% annualised. Faster than any other Western nation.

http://www.telegraph.co.uk/finance/economics/10423962/UK-growth-looks-set-to-be-fastest-in-the-West.html

Assuming this is real, it gives the Conservatives an interesting dilemma.

They've imposed 5 year fixed parliaments. Now, previously, you'd call an election after about 4 years, catching the economy on the upswing with a bit of careful timing. Now though, George Osborne will be force to try and keep things going at this rate until 2015 for electoral reasons.

And what growth we have seems to be based on private debt expansion. So, no IR hikes for 18 months, and all means available used to keep the credit flowing. What the worst that would happen?

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Assuming this is real

I don't think this is real. A more accurate headline would probably be "Inflation into overdrive for Q4".

Funny how the GDP deflator is always a nice low number.

gdp-deflator-cpi-500x444.png

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The Institute of Chartered Accountants is forecasting growth for Q4 at 1.3% or over 5% annualised. Faster than any other Western nation.

http://www.telegraph...n-the-West.html

Just when are the Daily Telegraph, Tory Central Office, the CBI and the Institute of Directors going to issue a formal apology to Gordon Brown?

The great man was right all along!

article-0-00BD15B21000044C-603_233x275.jpg

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Interesting, the only growth I see in the UK is in debt and the rate London Bankers are stealing from people around the globe.

How's that trade deficit growing?

united-kingdom-balance-of-trade.png?s=uktbttba&d1=19950101&d2=20131231

Edited by Gone to Ireland.

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Just when are the Daily Telegraph, Tory Central Office, the CBI and the Institute of Directors going to issue a formal apology to Gordon Brown?

The great man was right all along!

article-0-00BD15B21000044C-603_233x275.jpg

Yep the great man realised you needed a house price boom (and debt growth) to keep GDP on track (and he didn't do things by half measure presiding over a tripling in prices). Now we have modest growth in house prices and...... Q1 0.3% Q2 0.7% Q3 0.8% Q4 1.3% ?

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Is GDP now becoming a measure of how ****ed the country is becoming ?

EURGBP 0.85.

Certainly not worth as much in terms of currency. So this growth is not fooling the currency markets. Two local germain retailers have both been expanded, car parks full when I've been there, least I know I'm not supporting the land/asset banks of uk supermarkets by doing so. Denial of expenditure is about the only tool left to express distate with the current situation.

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EURGBP 0.85.

Certainly not worth as much in terms of currency. So this growth is not fooling the currency markets. Two local germain retailers have both been expanded, car parks full when I've been there, least I know I'm not supporting the land/asset banks of uk supermarkets by doing so. Denial of expenditure is about the only tool left to express distate with the current situation.

I wouldn't be surprised if the unthinkable happened and Tesco started losing money and eventually gets sold off to the Germans. Saying that there is no shortage of stupid people who continue shopping there.

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The Institute of Chartered Accountants is forecasting growth for Q4 at 1.3% or over 5% annualised. Faster than any other Western nation.

http://www.telegraph.co.uk/finance/economics/10423962/UK-growth-looks-set-to-be-fastest-in-the-West.html

Trading Economics 25/10/13

'The Gross Domestic Product (GDP) in the United Kingdom expanded 1.50 percent in the third quarter of 2013 over the same quarter of the previous year. '

They've taken some liberties with the figures as you'd expect.

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I wouldn't be surprised if the unthinkable happened and Tesco started losing money and eventually gets sold off to the Germans. Saying that there is no shortage of stupid people who continue shopping there.

Maybe not losing money but diminishing profits. their huge stores will come with huge overheads, Both Lidl and Aldi could tweak their deals quite easily to tempt shoppers in at varying (less full) shopping days/hours and extract the maximum out of their lower cost outlets, without even touching direct internet sales distribution which may or may not be a cost benefit to them at this stage. Ireland has been a real growth area and they have targetted middle income and bringing the same model tweaks to the UK and even back to Germany.

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Maybe not losing money but diminishing profits. their huge stores will come with huge overheads, Both Lidl and Aldi could tweak their deals quite easily to tempt shoppers in at varying (less full) shopping days/hours and extract the maximum out of their lower cost outlets, without even touching direct internet sales distribution which may or may not be a cost benefit to them at this stage. Ireland has been a real growth area and they have targetted middle income and bringing the same model tweaks to the UK and even back to Germany.

Where there is size there is opportunity for the customer and a basket full for ten quid at 8pm...with salads and veg down to ten 10p and bread down to 20p....which is exactly why I do my shopping at Tesco.

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Just when are the Daily Telegraph, Tory Central Office, the CBI and the Institute of Directors going to issue a formal apology to Gordon Brown?

The great man was right all along!

article-0-00BD15B21000044C-603_233x275.jpg

Gordon Brown saved the Tory Party!

So inflation is now driving GDP upwards?

I must say I feel like the economy is really growing...

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If the growth was genuine then I would have expected GBP to rise against the EUR, making it under priced at 1.18(0.85p/Eur) and a better valuation coming in at nearer 1.25(0.80p/Eur)

I am keeping my eye on gbp/eur at the moment, but don't like the sudden 1% rist last Thursday afternoon for no apparent reason. If it falls back into 1.15 - 1.165 range I will transfer some cash back to GBP.

However, long term (5 years) I am long silver & gold and Euro, short pound. Things will move around in the meantime, but it's important not to get caught with your pants down!

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If the growth was genuine then I would have expected GBP to rise against the EUR, making it under priced at 1.18(0.85p/Eur) and a better valuation coming in at nearer 1.25(0.80p/Eur)

I am keeping my eye on gbp/eur at the moment, but don't like the sudden 1% rist last Thursday afternoon for no apparent reason. If it falls back into 1.15 - 1.165 range I will transfer some cash back to GBP.

However, long term (5 years) I am long silver & gold and Euro, short pound. Things will move around in the meantime, but it's important not to get caught with your pants down!

Short sterling here, long the dollar though. I'm expecting big moves up.

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Yep...

I'm not risking it in case they can keep this boom on track. Last time we had a debt fuelled boom in 2007 we got a two dollar pound. Whether the Markets will fall for the same trick twice is another matter.

Edited by crashmonitor

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Gordon Brown saved the Tory Party!

So inflation is now driving GDP upwards?

I must say I feel like the economy is really growing...

UK inflation relative to deposit income is worse now than at any time since the 1970s. The difference being that in the 70s the govt and BoE were doing everything they could to bring inflation down whereas today they're doing everything they can to let it run away uncontrollably.

Is cash the riskiest asset of all?

By Richard Dyson

7:00AM GMT 03 Nov 2013

There is one lesson the public has not learnt from the financial crisis, experts warn – and that is the danger of holding too much cash.

Two factors are mounting a pincer attack on cash savings, and the assault is expected to continue for several years. The first is low rates of interest. The second is the rapid rise in the cost of living, which strips away the buying power of today's money. And the emerging economic recovery is making matters worse.

The gap between interest earned on deposits and the increase in living costs is as wide now as in the Seventies, said Tony Stenning of BlackRock, the fund manager. But the public is not properly aware of this because, at around 3pc, official inflation registers as a low number.

"Because headline inflation and interest rates are so low, people underestimate the impact inflation can have on their savings," said Mr Stenning. "The effect of inflation today is similar to back in the Seventies. Headline rates were much higher then, but the differential between inflation and the interest rate is much the same now.

"There is a cost to being in cash that many just aren't aware of."

Others put it more strongly. George Godber, a fund manager at Miton, referred to cash as "the worst possible investment you can make". He accepted the necessity to keep cash aside for emergencies, but said holding large sums for longer periods was dangerous. "If I offered an investment where you were guaranteed to lose 10pc of your money in three years, would you queue up for it?" he asked.

...

Is today's situation so different from before?

Yes, in that costs are rising but the Bank of England and other fiscal authorities have their hands tied. Interest rates are likely to remain very low for the foreseeable future – partly because the authorities are desperate not to snuff out the recovery.

Mr Lord said: "Policy appears firmly focused on securing growth in the real economy – perhaps at the expense of inflation targets."

He said Mervyn King, the former governor of the Bank of England, had appeared to persuade the wider public that controlling inflation remained the Bank's key objective while at the same time allowing it to run substantially above target. The penny will drop, he predicted, that the Bank is perhaps less committed to controlling inflation than it claims, and that "inflation targeting is not the magical goal of monetary policy that many had once believed it to be".

The typical response of central banks before the crisis was quite different. "Traditionally, when inflation flies up, interest rates go up too as a way of snuffing out price rises," Mr Godber said. "That can't happen now."

Part of the "double lock" keeping interest rates – and therefore returns on cash – at rock bottom is the vast amount of debt at national and household level, he said. Rising interest rates are negative for an economy in any case, but especially negative when borrowers are servicing large debts. This adds to the likelihood that rates will stay low even if inflation remains at its current level or increases.

Edited by zugzwang

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UK inflation relative to deposit income is worse now than at any time since the 1970s. The difference being that in the 70s the govt and BoE were doing everything they could to bring inflation down whereas today they're doing everything they can to let it run away uncontrollably.

can someone suggest an alternative.....

(1) Betting against the pound (risky)

(2) Equities, slightly over historic price/earnings

(3) Gold, down 30%, but still catching a falling knife.

(4) Gilts, crazy negative yields.

(5) Property, enough said.

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can someone suggest an alternative.....

(1) Betting against the pound (risky)

(2) Equities, slightly over historic price/earnings

(3) Gold, down 30%, but still catching a falling knife.

(4) Gilts, crazy negative yields.

(5) Property, enough said.

All of the above options look like rent seeking. You are competing with lots of low interest rate borrowing (and pension funds) also going into the above rent seeking activities (with the exception of physical gold) and looking for returns.

Seeking a more active investment strategy would provide you with better returns, but more risk.

Another exception might possibly be European property via REITS over a period of the next 5 to 10 years, *could* be a good investment compared to the UK's front run and overpriced property market. Personally I don't like depreciating assets such as property, but agricultural land is also another possibility, but again UK farmland is overpriced.

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can someone suggest an alternative.....

(1) Betting against the pound (risky)

(2) Equities, slightly over historic price/earnings

(3) Gold, down 30%, but still catching a falling knife.

(4) Gilts, crazy negative yields.

(5) Property, enough said.

I've started lending on Zopa...peer to peer lending, promised return of 5.2% no FSCS 85K protection ( like it's worth anything anyway ). Long term investment.

I might start loitering outside banks with a wedge of cash and a notebook and led out money directly at attractive interest rates and when they default, apologise to them for my risky lending and let them stay in their houses. if you can't beat them, join them.

Edited by TheCountOfNowhere

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can someone suggest an alternative.....

(1) Betting against the pound (risky)

(2) Equities, slightly over historic price/earnings

(3) Gold, down 30%, but still catching a falling knife.

(4) Gilts, crazy negative yields.

(5) Property, enough said.

Short the pound and gold. Out of gilts completely, equities pro tem. Long agriculture, fisheries, forestry and coal.

Two dollar pound? Why not? Osborne is recapitulating the Brown bubble 2004-7, why expect a different outcome?

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