Series Of Measures To Lock In Low Interest Rates.

[Bruce Banner]

BBC News has been displaying the following banner on and off for the last two days....

BUDGET 2015

Series of measures to lock in low interest rates.

Does anyone know what these measures are? I thought that interest rates were supposed to be set by the independent Bank of England.

[long time lurking]

I took it as it was referring to the contents of the budget ?

[long time lurking]

I think he claims it's because of his steps to pay down the debt deficit cocaine dealer.

cracked me up

[thecrashingisles]

They're going to shut the stable door, pull up the drawbridge, bring down the portcullis, bar the entrance. There's no way the genie is getting out of the bottle.

[Bruce Banner]

I wondered if it had something to do with encouraging a significant percentage of the population to take on so much debt that the "independent" Bank of England would have no alternative but to keep rates down. When that didn't work and the banks started paying a half decent rate to savers even though the base rate is 0.5%, they introduced "Funding for Lending", that did the trick.

[thecrashingisles]

cracked me up

The cocaine dealer's sorted you out too then?

[long time lurking]

The cocaine dealer's sorted you out too then?

Yup ,George is very generous with our money

[shindigger]

They're going to shut the stable door, pull up the drawbridge, bring down the portcullis, bar the entrance. There's no way the genie is getting out of the bottle.

They're going to shut the stable door, pull up the drawbridge, bring down the portcullis, bar the entrance. There's no way the genie is getting out of the bottle.

Vote Labour then. Things might get interesting.

[disenfranchised]

The US forward guidance issued today says 1.9% in 5 years.

Probably has more to do with the interest rate view and the FTSE hop up than anything that Tory bellend said yesterday

Edited March 19, 2015 by disenfranchised

[spyguy]

Run a budget and current surplus.

Anything short of those, the market will blow up in your face.

[silver surfer]

BBC News has been displaying the following banner on and off for the last two days....

BUDGET 2015

Series of measures to lock in low interest rates.

Does anyone know what these measures are? I thought that interest rates were supposed to be set by the independent Bank of England.

Osborne said in the budget speech that he intended to lock in low rates by issuing a higher percentage of long dated gilts and also by paying off completely any remaining undated gilts...he then made a little joke about paying of the debts of The South Sea Bubble and The First World War so now there's only Gordon Brown's debts to go.

[billybong]

Series of measures to lock in low interest rates

It's a series of measures so attractive that it'll ensure the "Conservatives" get back into power as it's only the Conservatives that can ensure low interest rates. Like the last election.

Apart from that if they opportunistically borrow enough while interest rates are low then that'll lock in low rates.

Then they can claim that it's because the economy is so balanced and healthy and will be the biggest economy in Europe in a few years time. You would think they'd discovered the motherlode the way they talk.

Everyone is starting to realise that just means the most indebted.

Edited March 19, 2015 by billybong

[silver surfer]

Another interesting point from the budget speech was that Osborne re-affirmed the 2% inflation target, which he pointedly described as "risk symmetrical" (he meant the economic damage of being 1 point below is equal to the damage of being 1 point above).

It's probably not unrelated that the chief economist of the BOE said today the bank should be prepared to cut interest rates further to combat the risk of deflation.

http://www.telegraph.co.uk/finance/bank-of-england/11482459/Bank-of-England-must-be-prepared-to-cut-rates-further-says-chief-economist.html

[billybong]

Apart from that on the official 2% interest rate target he can't change it just before a general election as the political consequences would be even more massive than keeping the discredited target.

They (the LibLabCon and the BoE) are all in it together now with being obliged to state the phoney and jettisoned 2% target still remains their (folklore) target. Remember the 5% inflation.

It's become a target ever more illusive due to their other self serving interests as well as their incompetence.

Edited March 19, 2015 by billybong

[Dorkins]

Osborne said in the budget speech that he intended to lock in low rates by issuing a higher percentage of long dated gilts and also by paying off completely any remaining undated gilts...he then made a little joke about paying of the debts of The South Sea Bubble and The First World War so now there's only Gordon Brown's debts to go.

Osborne's piled up more debt in 5 years than Brown did in 13.

[billybong]

It wouldn't be a total surprise either if the BoE has changed it's pension rules recently so that it's pension fund is detached from the low inflation figures and is now linked to some other measure with a higher annual value.

If they haven't then it won't be from want of trying.

It's just in their DNA.

[wonderpup]

Steve Keen puts an interesting argument that for the state to run a surplus the private sector must take on more debt because the only way that the system can create new money in the absence of government deficits is for the private banks to lend that money into existence ( Bearing in mind that in this context 'creating money' is not simply getting hold of existing money in the system but actually putting more into circulation- and since only the government or the private banks have this power then if the government is taking money out- to run it's surplus- then the private banks must put more in via private debt creation.)

So the upshot is that if the Government wants to run it's surplus it will need the population to take on even more private debt than it has now- which is likely to cause a new crisis of demand and indebtedness.

So the Tories (and Labors) 'long term economic plan' is to eventually run a surplus by cutting public spending which will either suck money out of the system or increase the level of private debt- both of which will actually cause a contraction of the economy.

Economic illiteracy seems to be endemic in our leaders.

[canbuywontbuy]

It's very simple the economy was wrecked in 2009 and so they needed 'emergency' interest rates. Under the current government the economy has 'recovered' to such a fantastic degree we still need 'emergency' interest rates or the whole thing will collapse even with a 0.25% rise in rates. So basically all of the measures of the last five years have enabled low interest rates to be locked in.

Doctor: "The patient is ill, put him on the emergency life support machine NOW!".

6 years pass.

Doctor: "The patient has been recovering the last 3 years and is showing very good signs."

Patient's wife: "But doctor, why is he still on life support after 6 years?"

Doctor: "..."

Edited March 20, 2015 by canbuywontbuy

[renting til I die]

Doctor: "The patient is ill, put him on the emergency life support machine NOW!".

6 years pass.

Doctor: "The patient has been recovering the last 3 years and is showing very good signs."

Patient's wife: "But doctor, why is he still on life support after 6 years?"

Doctor: "Because he has really good health care insurance. Don't worry, everything is going to be alright!"

[TheCountOfNowhere]

Series of measures to fleece savers and workers more like.

Edited March 20, 2015 by TheCountOfNowhere

[onlyme2]

It wouldn't be a total surprise either if the BoE has changed it's pension rules recently so that it's pension fund is detached from the low inflation figures and is now linked to some other measure with a higher annual value.

If they haven't then it won't be from want of trying.

It's just in their DNA.

When the bankrupt of england memebers pension is at stake their allocation changes to outright speculative one way and economic policy follows it.

Funny that,

CROOKS

[Wurzel Of Highbridge]

Steve Keen puts an interesting argument that for the state to run a surplus the private sector must take on more debt because the only way that the system can create new money in the absence of government deficits is for the private banks to lend that money into existence ( Bearing in mind that in this context 'creating money' is not simply getting hold of existing money in the system but actually putting more into circulation- and since only the government or the private banks have this power then if the government is taking money out- to run it's surplus- then the private banks must put more in via private debt creation.)

So the upshot is that if the Government wants to run it's surplus it will need the population to take on even more private debt than it has now- which is likely to cause a new crisis of demand and indebtedness.

So the Tories (and Labors) 'long term economic plan' is to eventually run a surplus by cutting public spending which will either suck money out of the system or increase the level of private debt- both of which will actually cause a contraction of the economy.

Economic illiteracy seems to be endemic in our leaders.

With such low interest rates, the rate of debt expansion can be lower because the interest repaid paid is much smaller. As long as the new debt equals the interest repaid the system is stable.

The problem that the government has that if they wish to borrow more money than the debt is expanding then they need much higher debt expansion to make the debt look less against GDP.

[TheCountOfNowhere]

It strikes me the government debt is actually a measure of how much the tax payers, you and I, are enslaved by the banks. It's not a debt, it's a promise to be allowed to be owned.

The have gifted the banks our children's future and tell us they are helping us.

Something really has to give, soon.

Edited March 20, 2015 by TheCountOfNowhere

[Assume The Opposite]

We've had about 3 surpluses in about 35+ years. Balancing the books is just a gimmick. I'd very much doubt anyone was better off during those years. Osbourne's primary goal has been to move private money into shareholders private pockets.

Austerity is a hoax. The cuts have been transferred onto rich tax cuts, free money for banks and outsourcing to private companies.

The debt bubble 'recovery' seemed to trend the HPI tear. Probably just a coincidence that Carney left Canada with a housing bubble. Wages have fell and people are scratching their heads as the reality doesn't match the news.

Osbourne has borrowed more than every Labour chancellor combined

Osbourne won't mention the Current Account Deficit & Trade Deficit

Osbourne has missed most of his budget targets

[Rare Bear]

It strikes me the government debt is actually a measure of how much the tax payers, you and I, are enslaved by the banks. It's not a debt, it's a promise to be allowed to be owned.

The have gifted the banks our children's future and tell us they are helping us.

Something really has to give, soon.

I think it was Mrs. Thatcher who said that all government spending has to be paid for by taxation or by borrowing, which is deferred taxation. Simple.