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The Masked Tulip

Carney On Channel 4 News Now

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I can't wait until they are forced - which must happen one day. Only question is when.

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He'll have to try harder to come up with a memorable quote if he wants to be remembered alongside Marie Antoinette.

I was thinking more when I'm sitting in the desert next to my Interceptor sharing a can of dog food with my best friend.

"... then there was that Channel 4 interview, that was probably the moment when I started to realise they'd completely lost control ..."

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Says other factors apart from unemployment will decide when IRs rise. Goal posts moved.

He's always said that though.

Here are some quotes from the speech he made back in August commenting on this

"In particular, we will have to see the rate of unemployment, currently 7.8%, fall to at least a threshold of 7% before even beginning to consider raising Bank Rate."

"Now that does not mean that Bank Rate will automatically rise when unemployment falls to 7% , instead the 7% threshold is a staging post along the road to recovery. When unemployment reaches 7% the MPC will reassess the state of the economy and the appropriate stance of monetary policy."

From here: http://www.bankofeng...ech675trans.pdf

Edited by jon211

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He's always said that though.

Here are some quotes from the speech he made back in August commenting on this

"In particular, we will have to see the rate of unemployment, currently 7.8%, fall to at least a threshold of 7% before even beginning to consider raising Bank Rate."

"Now that does not mean that Bank Rate will automatically rise when unemployment falls to 7% , instead the 7% threshold is a staging post along the road to recovery. When unemployment reaches 7% the MPC will reassess the state of the economy and the appropriate stance of monetary policy."

From here: http://www.bankofeng...ech675trans.pdf

I have read a few articles that have suggested forward guidance is a mess and everyone's more confused than ever.

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at least snow attempted to question him on the wage increases that are scripted to ride the the rescue- the magic ingredient that will solve all the problems.

For some reason these seem to be an article of faith for all concerned- maybe because they are the only thing that will dig them out the hole they have dug for themselves?

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at least snow attempted to question him on the wage increases that are scripted to ride the the rescue- the magic ingredient that will solve all the problems.

For some reason these seem to be an article of faith for all concerned- maybe because they are the only thing that will dig them out the hole they have dug for themselves?

Hasn't happened in Japan. No reason to expect it to happen here.

you-can-see-the-problem-wages-have-gone-nowhere-theyve-been-mired-in-deflation.jpg

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Compared to the USA or Japan, the UK has a fairly permanent non-working population but a highly elastic working population. This means that we can maintain a high unemployment rate with a high absolute number in employment at the same time.

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Says other factors apart from unemployment will decide when IRs rise. Goal posts moved.

:lol::lol:

They can't raise interest rates. Govt debt is too large, consumer debt is too large... the entire system is awash with debt and the only way to keep the system alive is to keep rates low. The real question is what happens when the wheels come off again, what's the next move negative rates?

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:lol::lol:

They can't raise interest rates. Govt debt is too large, consumer debt is too large... the entire system is awash with debt and the only way to keep the system alive is to keep rates low. The real question is what happens when the wheels come off again, what's the next move negative rates?

Of course they can.

There's still a massive spread between the policy rate and commercial rates. They could raise rates to 2-3% before most people would notice the difference. It will reduce banks margins of course, which is what needs to happen anyway now they're recapped.

Govt. has covered £375bn of its own debt via the BoE b/sheet, and raising rates makes no difference at all to the existing stock.

I'd guess the next cyclical top for policy rate will be 2-3% or so.

They've also got their b/sheet to much about with of course.

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Says other factors apart from unemployment will decide when IRs rise. Goal posts moved.

Then they will change the employment goal posts. Harangue a few more people into signing off

Edited by aSecureTenant

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Newsnight did an interesting piece tonight about Carney. Blanchflower was very concerned about H2B and whether a rise in IRs would crash the housing market. Gillian Teit pointed out that we were now creating a bubble on top of house prices that never corrected as they did in the US.

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Compared to the USA or Japan, the UK has a fairly permanent non-working population but a highly elastic working population. This means that we can maintain a high unemployment rate with a high absolute number in employment at the same time.

Which suggests that wage inflation will be hard to achieve on a widespread basis.

The elites ambition seems to be a flexible labor force that somehow retains it's pricing power- they need wage inflation to make the debt reduction strategy work.

But 'flexible' labor is flexible precisely because it lacks the power to resist being shat on- which means it also lacks the power to demand wage hikes.

What seems quite strange to me is why there was such support for the globalisation project among the very groups who have most to lose by creating the deflationary scenario we now have.

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