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gruffydd

The Bank Of England May Have Just Set Off The Mother Of All Out-Of-Control Monetary Booms

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Oh dear me. Andrew Lilico here: http://reaction.life/bank-england-may-just-set-off-mother-control-monetary-booms/?ts

"Well, with the money supply growing so wildly in the period to end-July, it’s a good job the Bank of England didn’t do something crazy in August, like cutting interest rates and printing a load of extra money. Oh, wait – that’s precisely what they did, on the basis of just one month of dodgy PMI data, which has reversed in August anyway! Good call, chaps and chapesses."

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If they drop interest rates too low at one end of the cycle then i would guess that means that when eventually interest rates do rise again then they will have to go higher than they would otherwise have done.

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Killing the productive economy to save the ponzi asset bubble 'cause we can't have all those vested interest groups that wrecked the economy last time not being able to do it once again.

Neoliberals know that 'crises' are a good opportunity to grab some more wealth. They've got form - 2008 ended up being a nice big income boost to the 1%. So here we are again with some more money printing to do nothing of use in the real economy.

Unfortunately the neoliberal parasite is killing its host.

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Something similar can happen with torque oversteer in a front wheel drive car. Indeed, excellent analogy.

Very good analogy with the plane, I thought FWD did torque understeer though?

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Very good analogy with the plane, I thought FWD did torque understeer though?

Maybe I'm getting my technical terms mixed up. Quite possibly understeer that you then overcompensate for and start weaving dangerously.

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There's the One Minute Manager and Britain is progressing towards the One Minute Worker.

Work One Minute and get full entitlement to all benefits and tax credits. Unemployment down to zero and infinite demand for new workers and the tiny new homes..

Edited by billybong

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Nonsense, more people working that ever before, another 300,000 jobs since brexit, house prices soaring, inflation is low, interest rates are super low so borrowing is cheap. The whole thing is going swimmingly well. In London property prices are up by 70 or 80% since the financial crisis, all the bankers are still here. There is no crisis and what's a bit of debt between friends when you can print hindreds of billions wherever you need to. The 1% must be very happy with the last decade as their wealth has doubled.

If only private sector debt wasn't >160% of GDP... public sector debt wasn't >90% of GDP... the current account deficit wasn't >6% of GDP... the primary fiscal deficit wasn't >5% of GDP.

Naturally, all the bankers are still here! Money goes where it's treated best.

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I think I'm having a problem getting this page to refresh. It's still showing a solid 10%+ crash in sterling against the dollar compared to where it was at when people thought we weren't leaving the EU. I realise that a single month of PMI data is basically the last word on the matter (and obviously in no way is PMI volatility in and of itself a cause for concern), I'm just a bit confused.

I fix the problem by caching my cookies, right?

OK, I tried that, still showing sterling at $1.30.

Edited by Bland Unsight

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Carney was so anti-Brexit, it's predictable he would spitefully further vandalise / sabotage the UK economy like this. Absolutely no need for that meaningless rate drop and further QE, but he's made his mind up: the UK is going to the shitter, and he will make sure the self-fulfilling prophesy occurs. He must be high up in the Illuminati to still have his job.

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Hmm any slack in the borrowing capacity of the economy swallowed up very quickly by spending on unproductive, speculative assets.

Then 'KERPLUNK' and we all fall down.

Carney et al genuinely have no clue.

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It comes down to not losing face and that means being seen to have done something so you can say you averted your predicted cataclysm. They have all been at it...Cameron, Osborne, Anna Soubry (on the channel 4 news last night) and Carney talking the economy down in the hope that something bad happens and they are proven right. In the meantime they have to follow the script re. emergency measures.

It seems bizarre that the reputation of individuals could possibly get in the way of sensible monetary policy, but I guess Carney's shame is more important than Uk plc.

Edited by crashmonitor

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Keep on buying gold. The same insanity that I first understood in 2000 is still going on, only possibly even worse now. Nothing has changed. It is going to end in the most ungodly crash of all time and the total destruction of the entire financial system and infrastructures involved.

Edited by Errol

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Keep on buying gold. The same insanity that I first understood in 2000 is still going on, only possibly even worse now. Nothing has changed. It is going to end in the most ungodly crash of all time and the total destruction of the entire financial system and infrastructures involved.

I can't see what good holding lots of gold will do when most people hold none.... ;)

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Killing the productive economy to save the ponzi asset bubble 'cause we can't have all those vested interest groups that wrecked the economy last time not being able to do it once again.

Neoliberals know that 'crises' are a good opportunity to grab some more wealth. They've got form - 2008 ended up being a nice big income boost to the 1%. So here we are again with some more money printing to do nothing of use in the real economy.

Unfortunately the neoliberal parasite is killing its host.

The only problem with that analysis, is that the criticism is from a Neoliberal!

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It comes down to not losing face and that means being seen to have done something so you can say you averted your predicted cataclysm. They have all been at it...Cameron, Osborne, Anna Soubry (on the channel 4 news last night) and Carney talking the economy down in the hope that something bad happens and they are proven right. In the meantime they have to follow the script re. emergency measures.

It seems bizarre that the reputation of individuals could possibly get in the way of sensible monetary policy, but I guess Carney's shame is more important than Uk plc.

+1

Not losing face, being seen to do something that fits their own story line and continuing to trough to line their own pockets.

It's also bizarre that after the vote to leave the eu people who wanted Britain to remain are still mainly in charge - especially Carney who has done more than most to continue to undermine Britain's economy since the economic collapse.

Edited by billybong

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Has anyone asked Carney about his 'threat' that interest rates might have to go up if we vote BREXIT.

It was either a bare faced lie, or it's proof that his models/understanding of how the financial environment would change and what intervention would be needed after the BREXIT vote was totally wrong.

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If only private sector debt wasn't >160% of GDP... public sector debt wasn't >90% of GDP... the current account deficit wasn't >6% of GDP... the primary fiscal deficit wasn't >5% of GDP.

Naturally, all the bankers are still here! Money goes where it's treated best.

It's all meaningless anyway as our financial system is debt based and will come to an end very soon.

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Has anyone asked Carney about his 'threat' that interest rates might have to go up if we vote BREXIT.

It was either a bare faced lie, or it's proof that his models/understanding of how the financial environment would change and what intervention would be needed after the BREXIT vote was totally wrong.

He was grilled about it by the select committee, but had a pretty good defence i.e. he never actually said it.

What he did say, was that even if he lowered rates there was a good chance banks may not pass on the reduction to mortgage holders and could even increase them.

To counter this when, after the vote, he lowered interest rates he also provided the banks with sufficient addition liquidity to remove any excuse for not passing on the reduction. He also put them on notice that he expected the reduction to be passed on in full.

You may think his policies are wrong but in this specific instance, the pre-vote comments were in line with his policy and the post-vote actions consistent with what he said.

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