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World Braces As Deflation Tremors Hit Eurozone Bond Markets

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Things are getting cheaper. How awful.

Of course it's completely beyond the capabilities of TPTB to cope with such a situation without robbing everyone (apart from the bankers and politicians etc of course).

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Richard Koo from Nomura, a specialist on Japan’s deflation, said the ECB’s cheap lending facilities for banks (TLTROs) cannot work at a time when companies and households are trying to pay down debt. “TLTROs are useless in a world of no borrowers,” he said.

The error has been compounded by demands for fiscal austerity, a destructive policy in a deflationary crisis. “The ECB is at least partly responsible for the eurozone slump, giving a helpful push to the countries of the eurozone as they dropped off the fiscal cliff. If a government stops borrowing and begins saving despite zero interest rates at a time when the private sector has done the same, the economy will fall into a deflationary spiral,” he said.

There is no error. Just older owners holding vastly overinflated asset values, and hardened entitlement at such high levels unlikely to have ever been seen to these extremes on any of the likely hundreds of billions of earth like planets in the universe.

There was some admission, after all the QE saviour, from AEP that QE could be cause of ever higher inequalities. Time for correction/low-mid-prime HPC, and fresh lending to solvent younger generations for next 40 years.. breaking up of overexpanded positions in companies and allowing more people to have a slice at lower prices... many banks offloaded distressed debt back to wonder markets in reits, or to distressed debt specialists for fraction of face value.. better positioned than before.

ECB's Nowotny: Monetary policy options limited to trigger loan demand

VIENNA Wed Dec 11, 2013 9:34am GMT

(Reuters) - There are limits as to what monetary policy can still do to stimulate demand for credit to fund investments, European Central Bank Governing Council member Ewald Nowotny said.

"Credit availability is not a problem now but what we see is that demand is very low," Nowotny, who is also governor of the Austrian Central Bank, told a news conference on Austrian bank stability on Wednesday.

"The possibilities of monetary policy are more or less limited," he added. "It is the demand side that decides investments."

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Does Ambrose Evans Pritchard have some kind of massive vested interest in QE, or is he just a huge QE fanboy? Everything he writes has "must print money or else" written either in or between the lines.

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Prices falling is a good thing....what we need is costs to fall, becoming more competitive means you can sell more for less to more people.....only the highly indebted and those that crave easy money want ever continuing higher prices,higher food,fuel prices..Higher house and rent prices.

Those who prefer to save, care about their future, like to be self-sufficient those who would like to have little debt for a shorter period of time, or those who find it hard to secure debt or cheap debt prefer falling prices.

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Things are getting cheaper. How awful.

Of course it's completely beyond the capabilities of TPTB to cope with such a situation without robbing everyone (apart from the bankers and politicians etc of course).

notice it is a bank that is giving the dire warnings...they are the ones short of the readies.

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notice it is a bank that is giving the dire warnings...they are the ones short of the readies.

.....and the little they have been allocated, being lent for the wrong purposes and reasons?

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.....and the little they have been allocated, being lent for the wrong purposes and reasons?

they are creating credit ( amongst themselves in the shadow banking system).

Credit pays no bills.

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Heroin junkies need fix...

Doom junkies (AEP) needs fix...

Credit junkies need fix...

World needs QE.

That is the thing......the world doesn't need QE.....the world is interdependent, what one bit does affects the rest......only some bits need continuing lumps of available stimulus, and continued inflation to kill what was spent yesterday....leaving those that don't require propping up to get wealthier on less...QE slowly kills prosperity.

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Weren't we here a year ago when the US first talked about tapering? Stock markets threw an absolute wobbly until the Fed backed down for a while. Then when tapering came, the world kept turning. They're just kicking up a stink because the spigot of free money has come to an end.

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Aep has been making the same anti eu, anti deflation apocalypse stories for years now.

He'll get his QE even though he he used to say it would only be temporary.

What about a debt write off? Big debt jubilee it's got to happen sometime. The older asset owners will collapse everything just to cling onto their property millionaire fantasy status.thats the real entitlement culture that's holding us back

Edited by hans kammler

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Aep has been making the same anti eu, anti deflation apocalypse stories for years now.

He'll get his QE even though he he used to say it would only be temporary.

What about a debt write off? Big debt jubilee it's got to happen sometime. The older asset owners will collapse everything just to cling onto their property millionaire fantasy status.thats the real entitlement culture that's holding us back

Umm how about a HPC instead. If fewer than 2 in 5 have property debt... you know... they could sell it for less. Banks could write lots more mortgages at lower prices and reliquify their capital position that way via solid and highly profitable mortgage lending.

Don't know about anyone else but basic family houses go on market at quarter million pounds on the dog-rough need loads of work end. Typically houses that haven't had any work for decades full of granny-grandad furniture from the 50s-70s. £300K averge condition - but mostly surrounded by houses £400,000 - and way too many £1m+ houses on RM, and of course nearly all the other owners not on market assume their own homes worth around the same. Older class sitting on £500K-£1m homes simply because others houses bought at such prices.

Yet we have to suffer AEP and his sort claiming QE is so badly needed, against these hyperinflated prices vs wages/savings some of us have been putting away for years whilst renting, rather than jumbo debt for ownership at any price. It's not like there hasn't already been UK hundreds of billions in QE, and debtors enjoyed years of lower rates and the time window to adjust their position, or sell. Too many have upsized or bought BTL, or Let To Buy. MSE thread today how he's paid off his mortgage, house valued at £300,000 but can't bare to sell it, as he looks at buying new place for £400,000. Thinking of BTL. That's been repeated so many times and followed through. There's so many who should have lost homes from 2008, but from 2009 went LTB and upsized!

No one forced any of the buyers to bid them up so high, pay the price they wanted to. Just read a few forum posts how 'smart money' investors, who already own homes, buying houses at these painfully high prices for the 'coming collapse of cash'. No one forced them to take on extra debt. It is a bit gutting that others now want their debts cut back, after they outbid others. Any chance of a rebate on all our rental payments to landlords eh, because others paid double what we thought value. Many a house here sells at £250K to only reappear as a rental a few months later. Debtors the victims yes.

Problem is all the people who think their homes are worth half a million pounds+ and should forever be protect via QE/stimulus etc. And other problem is those who sympathise with owner/buyer side, making out they are the victims. The older class need a shock, and I hope Gov/Banks actually have them targetted for it, to pry their clinging fingers off, back to being way more realistic. They are so soft and protected, it would be a shock - they could never endure what renter-savers have endured; tougher - some of us anyway.

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Does Ambrose Evans Pritchard have some kind of massive vested interest in QE, or is he just a huge QE fanboy? Everything he writes has "must print money or else" written either in or between the lines.

More that he's ultra bearish on the future of the Euro...I share his concerns, but like most anti-Euro nay sayers both he and I have massively underestimated the blind commitment towards the Euro project from the politicians and, astonishingly, even the blighted citizens of the most afflicted countries.

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If prices etc hadn't fallen in China they would never have been able to compete globally - but the people running the UK don't want to see stuff like that to enable the UK to compete. They would rather run the UK into the ground.

Edited by billybong

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Umm how about a HPC instead. If fewer than 2 in 5 have property debt... you know... they could sell it for less. Banks could write lots more mortgages at lower prices and reliquify their capital position that way via solid and highly profitable mortgage lending.

Don't know about anyone else but basic family houses go on market at quarter million pounds on the dog-rough need loads of work end. Typically houses that haven't had any work for decades full of granny-grandad furniture from the 50s-70s. £300K averge condition - but mostly surrounded by houses £400,000 - and way too many £1m+ houses on RM, and of course nearly all the other owners not on market assume their own homes worth around the same. Older class sitting on £500K-£1m homes simply because others houses bought at such prices.

Yet we have to suffer AEP and his sort claiming QE is so badly needed, against these hyperinflated prices vs wages/savings some of us have been putting away for years whilst renting, rather than jumbo debt for ownership at any price. It's not like there hasn't already been UK hundreds of billions in QE, and debtors enjoyed years of lower rates and the time window to adjust their position, or sell. Too many have upsized or bought BTL, or Let To Buy. MSE thread today how he's paid off his mortgage, house valued at £300,000 but can't bare to sell it, as he looks at buying new place for £400,000. Thinking of BTL. That's been repeated so many times and followed through. There's so many who should have lost homes from 2008, but from 2009 went LTB and upsized!

No one forced any of the buyers to bid them up so high, pay the price they wanted to. Just read a few forum posts how 'smart money' investors, who already own homes, buying houses at these painfully high prices for the 'coming collapse of cash'. No one forced them to take on extra debt. It is a bit gutting that others now want their debts cut back, after they outbid others. Any chance of a rebate on all our rental payments to landlords eh, because others paid double what we thought value. Many a house here sells at £250K to only reappear as a rental a few months later. Debtors the victims yes.

Problem is all the people who think their homes are worth half a million pounds+ and should forever be protect via QE/stimulus etc. And other problem is those who sympathise with owner/buyer side, making out they are the victims. The older class need a shock, and I hope Gov/Banks actually have them targetted for it, to pry their clinging fingers off, back to being way more realistic. They are so soft and protected, it would be a shock - they could never endure what renter-savers have endured; tougher - some of us anyway.

Yes, in my eyes you are quite right. There is a section of society that has been completely shielded from the economic reality of post crash Britain. Seeing their pensions and assets rise and rise whilst wages fall, and cost of living, especially for FTB'ers goes through the roof. Many of them even thought the recession was a fantasy, they are protected by government policy too much.

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+1 The attack on savers (who are merely trying to provide for themselves) and acceptance of the over-indebted as victims (with all the associated and supported government backed assistance and absolution of personal responsibility) has gone on for far too long.

Prices falling is a good thing....what we need is costs to fall, becoming more competitive means you can sell more for less to more people.....only the highly indebted and those that crave easy money want ever continuing higher prices,higher food,fuel prices..Higher house and rent prices.

Those who prefer to save, care about their future, like to be self-sufficient those who would like to have little debt for a shorter period of time, or those who find it hard to secure debt or cheap debt prefer falling prices.

Edited by PatientlyWaiting

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Yes, in my eyes you are quite right. There is a section of society that has been completely shielded from the economic reality of post crash Britain. Seeing their pensions and assets rise and rise whilst wages fall, and cost of living, especially for FTB'ers goes through the roof. Many of them even thought the recession was a fantasy, they are protected by government policy too much.

When I was working in the Public sector, I was made very aware that leaving would entail me coping with being "out there, where it is hard, there is little employee protection, and pensions were a joke, better buck your ideas up and write more parking tickets"

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When I was working in the Public sector, I was made very aware that leaving would entail me coping with being "out there, where it is hard, there is little employee protection, and pensions were a joke, better buck your ideas up and write more parking tickets"

....I think there is a feeling where the public sector have in the past, not sure about now, felt protected and have first hands to available funds and secure pensions and benefits.......public sector job for life?....the self employed are the people I admire the most, every penny they earn is worked for, little job security, no holiday pay, no sickness pay, a pension you save yourself, hard to get any kind of mortgage unless well established and three years proven accounts........some people are more protected than others and still they want more.... in the private sector generally, if you are good at your job you are rewarded, if you are bad at your job you are retrained if that doesn't fix it, replaced. ;)

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We are spending our way out of recession.

So knowing you will be losing your job, you borrow against your assets/home and use that debt/credit/funds/cash/income/spending money to live and pay any interest plus fees due.....surely it will eventually catch up in the end. ;)

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For lots of people a job is not necessary as their house earns more than they do .... and it is all tax free. Just release some equity, spend it and the money will magically re-appear via the HPI ATM machine. Can't see any problem with this going forward.

Hmm, you have just described the whole finance industry.

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