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Financial Leaders Agree To Act To Bolster Growth - Low Interest Rates Not Enough...

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http://www.nytimes.com/2015/09/07/business/international/financial-leaders-agree-to-act-to-bolster-growth.html?ref=business&_r=0

Financial leaders from the world’s 20 biggest economies agreed over the weekend to step up efforts to increase growth, saying reliance on ultra-low interest rates would not be enough to accelerate economic expansion.

But they also said they were confident that growth would pick up and, as a result, interest rates in “some advanced economies” — code for the United States — would have to rise.

“Monetary policies will continue to support economic activity consistent with central banks’ mandates, but monetary policy alone cannot lead to balanced growth,” the communiqué from the finance ministers and central bankers of the Group of 20 said. “We note that in line with the improving economic outlook, monetary policy tightening is more likely in some advanced economies.”

The Federal Reserve holds a rate-setting meeting on Sept. 16 and 17 and is expected to vote an increase. The communiqué’s wording defied pressure from emerging markets to brand such a move as a risk to growth.

“We heard different opinions on the possible Fed decision,” Deputy Prime Minister Cevdet Yilmaz of Turkey said at a news conference. “Some think the Fed needs to make a decision sooner rather than later, while others think it should delay.”

Considering this is the worst post recession recovery since WWII and after 6 years we still have ZIRP and the recessionary winds are gathering, it appears we might be a littler bit fooked.

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what can they do except print more, or, knock it all down are start again from a low Base.

from my point of view if taxes were halved, market interference withdrawn, red tape abolished and housing costs halved I'd be spending and investing.

but hey, what do I know.

Edited by TheCountOfNowhere

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what can they do except print more, or, knock it all down are start again from a low Base.

from my point of view if taxes were halved, market interference withdrawn, red tape abolished and housing costs halved I'd be spending and investing.

but hey, what do I know.

What he said. There must be legions of people like me and countless others - on good money, but battening down the hatches due to a perceived squeeze through high house prices, high taxes, and low return on savings.

Make the middle classes feel wealthy and they will spend, make them feel squeezed and they will get defensive.

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What he said. There must be legions of people like me and countless others - on good money, but battening down the hatches due to a perceived squeeze through high house prices, high taxes, and low return on savings.

Make the middle classes feel wealthy and they will spend, make them feel squeezed and they will get defensive.

+2

I have made every effort to minimise my outgoings and invest my money in ways that make it as difficult as possible for the government/banks to get their hands on it.

From where I stand the social contract has been completely broken.

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What he said. There must be legions of people like me and countless others - on good money, but battening down the hatches due to a perceived squeeze through high house prices, high taxes, and low return on savings.

Make the middle classes feel wealthy and they will spend, make them feel squeezed and they will get defensive.

it's that simple.

all those empty shops sitting waiting to be used, but hey, notpaying the council thousands in rent and/or business rates.

$$$$ that.

taxes are only good for them taking then.

the level of tax here now is obscene. housing costs are obscene.

food costs are obscene.

fuel costs are obscene.

I'd rather leave than put up with this ####

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+4

Lots of people of all income ranges (except the !%) will likely be thinking the same.

spoken to a couple of 18 year old recently. they think everything is rosy and they are all going to get high flying. well paying jobs when they leave uni. it's boom time.

they are going to got their parents to help them buy a house though.

ponzi-tastic.

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spoken to a couple of 18 year old recently. they think everything is rosy and they are all going to get high flying. well paying jobs when they leave uni. it's boom time.

they are going to got their parents to help them buy a house though.

ponzi-tastic.

But why would they know any better? Their govt, the BoE, and the employers' organisation (CBI) have spent the last six years assuring them that sacrifices are being made to 'pay down the deficit' and everything is on the up-and-up thanks to George Osborne's incomprehensible 'plan'. No mention is ever made of the trillion plus pounds that has been borrowed and printed since 2009 to provide UK citizens with a standard of living they have not earned, or the vast debts that remain, undiminished and unaddressed, in the private sector.

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spoken to a couple of 18 year old recently. they think everything is rosy and they are all going to get high flying. well paying jobs when they leave uni. it's boom time.

they are going to got their parents to help them buy a house though.

ponzi-tastic.

They just need exposure to the jobs market.

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Can identify with the picture of cutting spending despite (income-based) prosperity.

Was out sanding and priming a small part of our worthless car today, top 15% national household income but motoring in a car fabricated last millennium. In true HPC style, genuine sense of peevishness that a neighbour has recently purchased a motorhome built in the early 90s which makes our car no longer the oldest on the street.

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to keep the current system, they need inflation

A QE programme that is so big that it makes the others look as if a beggar had knocked over her collecting hat and some of the coins that rolled away were picked up by a bank is the only thing they have left in their arsenal

isn't it?

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to keep the current system, they need inflation

A QE programme that is so big that it makes the others look as if a beggar had knocked over her collecting hat and some of the coins that rolled away were picked up by a bank is the only thing they have left in their arsenal

isn't it?

I do see this as the only way. Governments around the world have far too many unfunded promises and it will be far easier to pay out in devalued currency than a hard default.

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+2

I have made every effort to minimise my outgoings and invest my money in ways that make it as difficult as possible for the government/banks to get their hands on it.

From where I stand the social contract has been completely broken.

+5. Basically this. I will continue to do this until something changes. Most people I know are doing this as well.

Edited by Errol

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I do see this as the only way. Governments around the world have far too many unfunded promises and it will be far easier to pay out in devalued currency than a hard default.

not only unfunded promises, but outright debt: governments seem to owe most and whilst it is taxpayers on the hook for it, it would be unpalatable for politicians to make the cost of that debt even more than it already is

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+5. Basically this. I will continue to do this until something changes. Most people I know are doing this as well.

I am doing something similar. Living a very frugal and minimal lifestyle.

1. Cut down on eating out. Maximum once in month.

2. Stocked grains for one year to avoid driving and parking charges. Also bulk buying is cheaper.

3. No movies in the Cinema. Borrow DVDs from friends.

4. Walk anywhere under 5 miles, cycle under 10miles. Even children flow this rule. Makes them stronger.

5. Carry packed lunch. Kids are told not to throw their foil use it at least two times.

6. Three outfits only: one in use, one in wash and one in store. Mend and reuse until death. No throwing away.

7. Use leftover food creatively. No wastage at all. Buy less, Cook less.

8. Turn off devices when not in use.

9. Store paperwork and photos digitally. Free up storage and space.

Next step is to move to a smaller house. Use the lounge for multiple functions - bedroom, dining room, study and sitting room....... going Japanese way.

Edited by Fairyland

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2 years ago we started changing the way we lived, so now we look to save 4 figures a month, as a base target, which isn't as challenging now as it was when we started; now we look for places we can save. We no longer really drink, use cheaper cuts of meat (which taste better if you cook them properly ironically), supply as much of our own stuff as possible and only buy new thngs if we have to. Although I did buy a gopro 4 hero the other day as I like to film stuff (didn't go down well at the AGM).

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I am doing something similar. Living a very frugal and minimal lifestyle.

1. Cut down on eating out. Maximum once in month.

Once a month? That's slightly a rich-person's lifestyle even today. A generation ago, eating out at all would've marked you out as posh.

2. Stocked grains for one year to avoid driving and parking charges. Also bulk buying is cheaper.

Driving? Parking? What's wrong with your legs? Or indeed free delivery in this day and age.

3. No movies in the Cinema. Borrow DVDs from friends.

movies? Well, if you must, what's wrong with the online services like youtube?

4. Walk anywhere under 5 miles, cycle under 10miles. Even children flow this rule. Makes them stronger.

Five miles walking is long enough to eat into your time: you'd better be on pleasant terrain rather than some car-infested road. Why not just say walk or cycle up to your comfort-limit. And if you walk 5 miles by choice then cycling 25 should be a doddle too.

5. Carry packed lunch. Kids are told not to throw their foil use it at least two times.

At this time of year, enjoy nature's bounty ;)

6. Three outfits only: one in use, one in wash and one in store. Mend and reuse until death. No throwing away.

One in wash? Unless you're going back to a much smellier age, that implies a helluva lot of underfilled washes. I'll stick with more clothes (worn until they get so tatty as to be re-designated cleaning rags).

simply_connected_underwear.png

7. Use leftover food creatively. No wastage at all. Buy less, Cook less.

You mean you used to be gratuitously wasteful?

8. Turn off devices when not in use.

9. Store paperwork and photos digitally. Free up storage and space.

And especially books. The benefits of modern life :)

Next step is to move to a smaller house. Use the lounge for multiple functions - bedroom, dining room, study and sitting room....... going Japanese way. ;)

That's the one I have more difficulty with. Something about old dogs, new tricks.

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It's the problem the authorities have got trying to prevent corrections.

With more stimulus, and distortion of values, some market participants reduce spending even further.

What seems to be lost in the monetary debate is that this persistent drop in inflation defies the primary purpose of quantitative easing, which is designed to lower real interest rates. In fact, with nominal yields rising in the face of falling inflation and thus raising real interest rates, the US economy is now closer to a deflationary death spiral than at any time during the Fed’s unprecedented policy designed to prevent just such an outcome.

Though he wouldn’t admit it, Bernanke met his match in 2011. The consumer balked at attempts to stimulate aggregate demand via inflationary policy of negative real interest rates, and ever since, has been raising real interest rates by reducing inflation through lower aggregate demand. This is perhaps the most unappreciated yet significant market development since the financial crisis.

Rising real interest rates is Bernanke’s worst nightmare. Everything he has worked for in academia and implemented in monetary practice is imploding before his very eyes. Contrary to his assertion in 2002, aggregate demand in the real economy has in fact met the limit of monetary policy, rendering QE’s impact ineffective and obsolete.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=190726

And some of this too. The banking system is awash with liquidity. Although they have been finding borrowers to pick up the slack. Including those who can borrow from FLS and lend to BTLers, in rising housing market last few years, set much by way BTLers and investors paying ever higher prices.

My concern is with the transmission mechanism for activating the use of the liquidity we have created, which remains on the sidelines of the economy. I posit that nonmonetary factors, not monetary policy, are retarding the willingness and ability of job creators to put to work the liquidity that we have provided. I have spoken to this many times in public. Those with the capacity to hire American workers―small businesses as well as large, publicly traded or private―are immobilized. Not because they lack entrepreneurial zeal or do not wish to grow; not because they can’t access cheap and available credit. Rather, they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy.

High prices / market overrides / imbalances - work not paying vs prices asked / excessive risk etc.

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spoken to a couple of 18 year old recently. they think everything is rosy and they are all going to get high flying. well paying jobs when they leave uni. it's boom time.

So did I.

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Can identify with the picture of cutting spending despite (income-based) prosperity.

Was out sanding and priming a small part of our worthless car today, top 15% national household income but motoring in a car fabricated last millennium. In true HPC style, genuine sense of peevishness that a neighbour has recently purchased a motorhome built in the early 90s which makes our car no longer the oldest on the street.

Riding down your street on my 1980's Dawes bike (£30 off Ebay) I despise big spenders like you and your neighbours.

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Riding down your street on my 1980's Dawes bike (£30 off Ebay) I despise big spenders like you and your neighbours.

they don't make bikes like that anymore!

truly built to last were the 80's Dawes machines.

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After the French revolution didn't the French go all tight as **** holes and try to keep their heads as low as possible? (as you would)

(I`m talking about the middle class here and of course aristocrats)

And didn't this screw their society and economy for generations?

I say bring it on!

Wandering around with a shotgun and dog is the life for me! Okay so no shotgun.....and no dog either......wandering around?

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