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Cabinet reshuffle, effect on economy

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What concerns me about the various interviews I've heard since the reshuffle is DEBT and INFLATION

Suddenly there is apparently plenty of scope for 'much' more national debt, and I heard Ian DuncanSmith yesterday comment that there was 'plenty of headroom on inflation'. 

'Inflating away the debt' will punish people who haven't been debt monkeys for the last 20 years. 

Edited by regprentice

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9 minutes ago, zugzwang said:

extending Help to Buy mortgages from 25 to 35 years

2 generations will pay a mortgage.

House prices will jump further, currency will lose its value further, debt becomes cheaper, savings become costlier.

It's 2013 all over again.

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5 minutes ago, Simhadri said:

2 generations will pay a mortgage.

House prices will jump further, currency will lose its value further, debt becomes cheaper, savings become costlier.

It's 2013 all over again.

You VIs have been pushing that inter-generational mortgage nonsense for the last fifteen years.

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47 minutes ago, Bruce Banner said:

You VIs have been pushing that inter-generational mortgage nonsense for the last fifteen years.

Rinse and repeat.

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56 minutes ago, regprentice said:

What concerns me about the various interviews I've heard since the reshuffle is DEBT and INFLATION

Suddenly there is apparently plenty of scope for 'much' more national debt, and I heard Ian DuncanSmith yesterday comment that there was 'plenty of headroom on inflation'. 

'Inflating away the debt' will punish people who haven't been debt monkeys for the last 20 years. 

Tory boys and spending before the election: 'Communism... and furthermore, Marxism!'

Tory boys and spending after the election: 'We're gonna need a bigger debt mule.'

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3 minutes ago, zugzwang said:

Tory boys and spending before the election: 'Communism... and furthermore, Marxism!'

Tory boys and spending after the election: 'We're gonna need a bigger debt mule.'

We're all in this together as Cammie used to say to Commie 😆

Anybody still waiting for magical crash, should think twice.

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2 minutes ago, Simhadri said:

We're all in this together as Cammie used to say to Commie 😆

Anybody still waiting for magical crash, should think twice.

Borrowing 5% of GDP every year to generate 1% of growth... that's magical thinking.

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15 minutes ago, zugzwang said:

Borrowing 5% of GDP every year to generate 1% of growth... that's magical thinking.

When the government borrow it means they are forcing debt onto our shoulders,  effectively taking out a loan we don't want or agree to. 

 

Who profits? 

 

The world is being enslaved by the banksters!!!! 

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1 hour ago, regprentice said:

'. 

'Inflating away the debt' will punish people who haven't been debt monkeys for the last 20 years. 

Only if you invest badly

(Literally millions of boomers who have substantial wealth tied up in property and building society bonds are going to have it stealthily taken from them)

Edited by Si1

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Just now, Si1 said:

Only if you invest badly

You can only inflate away debt with wage inflation. 

 

All those non EU immigrants about to be let in the UK will work for peanuts. 

 

This whole mess comes back to Thatchers big bang. She sold us to the bankers for her 10 years of power. Jesus, she Musta been thick or evil 

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1 minute ago, TheCountOfNowhere said:

You can only inflate away debt with wage inflation. 

 

All those non EU immigrants about to be let in the UK will work for peanuts. 

 

This whole mess comes back to Thatchers big bang. She sold us to the bankers for her 10 years of power. Jesus, she Musta been thick or evil 

Or GDP inflation which is the closely related although not entirely the same. Will see heh.

Edited by Si1

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3 hours ago, regprentice said:

'Inflating away the debt' will punish people who haven't been debt monkeys for the last 20 years. 

You should have been buying gold for the last 20 years. There has been ample warning and more than enough discussion on the matter.

Price of gold in Sterling has basically reflected the debasement of the currency - hence it being at near all-time highs.

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My Tuppence worth view is this.

Boris / Dominic are now the Chairman and CEO of the country, no one can stop them pushing through their plan.  However when this happens in a company it usually results in a spectacular blow up at some point as there is no one to point out the potential errors in the plan.  I expect Boris to 'spaff' a load of money on grand infrastructure projects and so far his track record is poor e.g. London cable car, Boris island airport, garden bridge etc.

Without a controlling hand the money taps will be turned on to pay for such grand schemes, notice yesterday that the pound spiked after the reshuffle.  The market knows that big spending is coming and therefore the risks rise, as does the return asked to underwrite them, i.e. the interest rate will be under pressure to rise. 

On top of this there will be the impending end of the transition period, personally I don't think the current government wants a deal, so this uncertainty will put further pressure on Sterling in the markets.  I think that at some point late this year or early next year the new Guvnor of the BOE will have his hand forced to raise interest rates to defend the pound.

And we may see several rises in quick succession, which will have impact on housing market.  How much that is could be limited or not, hard to tell.

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3 hours ago, Errol said:

You should have been buying gold for the last 20 years. There has been ample warning and more than enough discussion on the matter.

Price of gold in Sterling has basically reflected the debasement of the currency - hence it being at near all-time highs.

or you could have invested in the NASDAQ. it is up 900% since the dotcom crash, and over that time GBP is down 16%.

image.png.fd6faf604cd0c4927721cb9bb4cc8b1f.png

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3 minutes ago, hurlerontheditch said:

or you could have invested in the NASDAQ. it is up 900% since the dotcom crash, and over that time GBP is down 16%.

image.png.fd6faf604cd0c4927721cb9bb4cc8b1f.png

Wow - if any chart indicates the potential for catastrophe, there it is! A fantastic investment if you got in at a good time

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5 minutes ago, Trump Invective said:

Wow - if any chart indicates the potential for catastrophe, there it is! A fantastic investment if you got in at a good time

i back tested it, since NASDAQ inception it has returned on average 14% per year

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44 minutes ago, Trump Invective said:

Wow - if any chart indicates the potential for catastrophe, there it is! A fantastic investment if you got in at a good time

I intend to keep well out of this over exuberance 

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20 hours ago, ubuntu said:

From the Daily Fail:

The Chancellor's six-strong team includes Mats Persson, a former head of the Open Europe think-tank and adviser to David Cameron - the ex-PM who once described Mr Cummings as 'career psychopath'.  Other aides include Samuel Coates, who previously worked at ConservativeHome, media adviser Tim Sculthorpe, Adam Memon and Jennifer Powell. Sajid Javid pictured at the party conference in Manchester last September with his senior advisors including Tim Sculthorpe

https://www.dailymail.co.uk/news/article-8001847/Insulting-No-10-nickname-Sajid-Javid-helped-trigger-big-bust-JASON-GROVES-reveals.html

Bit about Mats Persson

https://www.cityam.com/sajid-javid-appoints-ey-brexit-guru-mats-persson-as-chief-of-staff/

https://twitter.com/timsculthorpe?lang=en

Absolutely fascinating.  Many, many thanks for posting this... I can't usually convince myself to read the Mail.

Samuel Coates strikes me as having the social media presence of someone who doesn't really matter. Mats Persson seems far more relevant... It explains the "PJ-Masks" quote from Cummings... and not by the "career psycopath" quote - I think Cummings would wear that as a badge of pide.

Far, far more interesting (to me) is "Open Europe" - something smells funny, to me, about this branding.  My curiosity is piqued because, when I click on Google's recommendation of openeurope.org.uk, it raises security warnings.  I didn't expect to see an 'org.uk' domain raise those concerns - what could be causing that IT issue?

"Open Europe" resonates, with me, with both Popper's "Open Society"  (I wish I had more free time... both volumes are on my "to-read" pile.)  Is "Open Europe" one of the "Open Society Foundations"?

Can anyone join the dots for me?

 

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14 hours ago, regprentice said:

What concerns me about the various interviews I've heard since the reshuffle is DEBT and INFLATION

Suddenly there is apparently plenty of scope for 'much' more national debt, and I heard Ian DuncanSmith yesterday comment that there was 'plenty of headroom on inflation'. 

'Inflating away the debt' will punish people who haven't been debt monkeys for the last 20 years. 

They can try and push inflation up but without raising wages it just ain't gonna happen, presumably we have rock bottom rates because the country is saturated in debt already.

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On 14/02/2020 at 09:21, Simhadri said:

2 generations will pay a mortgage.

What happens when generation 1 needs to sell the home to pay for care? Back to square one.

Anyway we already have intergenerational mortgages, it's called shared ownership. Pretty niche product.

Also when generation 1 takes out the mortgage how do they get generation 2 to agree to take the debt on? 'Hey son, I know you're a primary school child but would you mind signing these mortgage papers? There's a good lad.'

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17 hours ago, Wayward said:

I intend to keep well out of this over exuberance 

US equities are mental at the moment, huge crash coming.

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10 hours ago, longgone said:

They can try and push inflation up but without raising wages it just ain't gonna happen, presumably we have rock bottom rates because the country is saturated in debt already.

Inflation without wage rises is kryptonite for house prices, means even less money left to pay for housing after paying for food, utilities, clothing, transport etc.

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23 hours ago, TheCountOfNowhere said:

Is everyone assuming Boris is on our side? A real brexiteer? A man of principle? One of the people? 

Not whatsoever.  How on earth can you suggest man of principle when he says one thing, and does the other?  The good thing is, he and his SPADs have such an ego, the popularity of the Ballot Box may eclipse plate spinning.  Trying to get rid of No. 11's powers has shown what an ego can do.

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1 hour ago, Dorkins said:

What happens when generation 1 needs to sell the home to pay for care? Back to square one.

Anyway we already have intergenerational mortgages, it's called shared ownership. Pretty niche product.

Also when generation 1 takes out the mortgage how do they get generation 2 to agree to take the debt on? 'Hey son, I know you're a primary school child but would you mind signing these mortgage papers? There's a good lad.'

Daddy I want to become a doctor and travel the world and help those less fortunate.

No son you are going to stay here and work to pay off this house I overpaid for.

Its nuts you can imagine its like going back to the olden days.

Nobby had dreams of being a teacher but the family had amigo loans and better together mortgage.... so Nobby had to take a job at pound land and leave school at 16 

Edited by Fromage Frais

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  • 316 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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