OnlyMe Posted February 8, 2006 Share Posted February 8, 2006 (edited) jonjo. The market is always the best guess of future intrest rates, is called the rational expectations model, many people in the market will be using the same models as the BoE and possibly even better/more advanced models to predict future inflation, growth and monetary policy. Problem is surely that can only work when there is some degree of rationality in the market, I don't see it and I don't and haven't seen any degree of control of many things for a long time, not lest of which is debt. Thus, irrationally I am sitting with my finger hovering over the sell button with the intention of liquidating all my £ denominated investments and shifting the money elsewhere. Edited February 8, 2006 by OnlyMe Quote Link to comment Share on other sites More sharing options...
Pluto Posted February 8, 2006 Author Share Posted February 8, 2006 Thus, irrationally I am sitting with my finger hovering over the sell button with the intention of liquidating all my £ denominated investments and shifting the money elsewhere. I would stay clear of any FIAT currency right now. GOLD is the place to be until interest rates rise to at least 3-4% above inflation. That's real inflation - not the mickey mouse numbers the government put out. Quote Link to comment Share on other sites More sharing options...
88Crash Posted February 8, 2006 Share Posted February 8, 2006 The problem is once it's rolling, it'll be very hard to stop. Just watch. We'll then all have another problem. If we buy we can expect virtually instant negative equity for the next few years. Not an exciting prospect? When it reaches a point where you can afford it (assuming you are looking for a home to live in) its not a problem You will be living in YOUR home for a few years and if it drops further, no worries - its only a paper drop and if you decide to move -everything else is cheaper, especally if you move up 'the ladder' Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted February 8, 2006 Share Posted February 8, 2006 (edited) I would stay clear of any FIAT currency right now. GOLD is the place to be until interest rates rise to at least 3-4% above inflation. That's real inflation - not the mickey mouse numbers the government put out. Yes, I have that well in mind. Wary of gold being zapped though, a basket of commodities and commodity plays being my preference,at the moment at least. Edited February 9, 2006 by OnlyMe Quote Link to comment Share on other sites More sharing options...
Harry Sacks Posted February 9, 2006 Share Posted February 9, 2006 This is barely worth mentioning really. The £ is back to where it was before xmas. This is not a run on the £. If we see a run on the £ everyone will know about it. I've lost count, how many times this has been called on here? Quote Link to comment Share on other sites More sharing options...
MarkG Posted February 9, 2006 Share Posted February 9, 2006 this latest round will have centred on whether the economy will grow enough over the next few quarters to ensure inflation stays up near its 2% government-set target. WTF? They're worried that inflation will be _too low_? When the price of just about everything other than Chinese DVD players is exploding? What kind of warped parallel universe did I wake up in this morning? Quote Link to comment Share on other sites More sharing options...
Pluto Posted February 9, 2006 Author Share Posted February 9, 2006 WTF? They're worried that inflation will be _too low_? When the price of just about everything other than Chinese DVD players is exploding? What kind of warped parallel universe did I wake up in this morning? Yes, inflation is at 2%. The government said so, so it must be true. The government does not lie. The government will do what is best for the country regardless of what the opinion polls say. Quote Link to comment Share on other sites More sharing options...
eurows Posted February 9, 2006 Share Posted February 9, 2006 Why do people think the government hides the real inflation figure. If this was possible previous governments would of done so. Quote Link to comment Share on other sites More sharing options...
non-FTBer Posted February 9, 2006 Share Posted February 9, 2006 Why do people think the government hides the real inflation figure. If this was possible previous governments would of done so. Are you serious? Fudging the inflation figures is the oldest trick in the book. Just seems that the current government are hiding a mountain rather than a molehill. Quote Link to comment Share on other sites More sharing options...
jonpo Posted February 9, 2006 Share Posted February 9, 2006 Interest rate markets are simply too liquid to be subject to much price distortion. the crux of the porblem is though is the MPC faces a significant dilema the nuances of which cannot be contained in a single price for money. if they lower IR's they reinflate the houseing bubble much further. if they raise rates the economy will tank. for that reason they will do nothing. I agree with the market. thats why Merv places so much emphasis on data. the data will tell us. Quote Link to comment Share on other sites More sharing options...
ILikeBigBoobs Posted February 9, 2006 Share Posted February 9, 2006 Lex: Sterling Published: February 8 2006 13:49 | Last updated: February 8 2006 19:34 Membership of the European Monetary Union is an issue that prompts nationalistic fervour from the UK’s political fringes and procrastination from the ruling Labour party. Have currency investors taken a more sanguine approach and decided that sterling is, in effect, already part of EMU? Morgan Stanley offers this explanation for the stability of the euro/sterling exchange rate since mid-2003, even given generally low levels of market volatility. Increasing integration of the UK economy and the eurozone may have reduced currency fluctuations as investors accept the idea of structural convergence. Asian central banks, aware of this strengthening relationship, may view sterling as a higher-yielding proxy for the euro. The pound’s increasing share of official reserves, shown in the latest Bank for International Settlements survey, may be evidence of this trend. More................... Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted February 10, 2006 Share Posted February 10, 2006 I wonder if Karhu noticed sterling recover today? Quote Link to comment Share on other sites More sharing options...
MarkG Posted February 10, 2006 Share Posted February 10, 2006 thats why Merv places so much emphasis on data. the data will tell us. But, uh, the data is fudged... and, even if it wasn't, it's impossible to map the state of a massively complex market involving vast millions of people into a few numbers. Personally I think I'll be shifting more money out of sterling soon unless the BoE show some sign of growing balls... whether gold, foreign shares or Canadian dollars is another question, but the BoE clearly have no desire to preserve the value of my money. Quote Link to comment Share on other sites More sharing options...
cupidstunt Posted February 10, 2006 Share Posted February 10, 2006 I wonder if Karhu noticed sterling recover today? it's going to be a bit like the Housing market a few ups but a lot of downs! Quote Link to comment Share on other sites More sharing options...
Time to raise the rents. Posted February 10, 2006 Share Posted February 10, 2006 it's going to be a bit like the Housing market a few ups but a lot of downs! Just like the last 100 years of HPI hey? Quote Link to comment Share on other sites More sharing options...
karhu Posted February 10, 2006 Share Posted February 10, 2006 I wonder if Karhu noticed sterling recover today? Yes, I did. +0.1% is not much and could be put down to random fluctuation. Glad to see that you follow up your predictions Quote Link to comment Share on other sites More sharing options...
Randall Herbert Posted February 10, 2006 Share Posted February 10, 2006 Why do people think the government hides the real inflation figure. If this was possible previous governments would of done so. Try this recent poll http://www.housepricecrash.co.uk/forum/ind...0&gopid=295699& Looks like the people who actually know what the real inflation figure is think that 6-8% is where its at... On that basis it would seem that 'Crash' Gordon Brown and Phoney Bliar are once again proven to be corrupt unsavoury lying B-A-A-S-T-A-R-D-S!!!!!! Well we knew that anyway and the recent by-election just reinforced how spent the Nu-Labour Trojan Horse is. Quote Link to comment Share on other sites More sharing options...
Pluto Posted February 14, 2006 Author Share Posted February 14, 2006 (edited) GBP could break 1.70 against this USD on the 1.9% CPI number. If so the run on the pound could start. The BoE would be foolish to decrease IR. But the pressure from Downing Street could be intense, Gordon "Boom 'n' Bust" Brown wants the number 10 spot. Edited February 14, 2006 by Pluto Quote Link to comment Share on other sites More sharing options...
Realistbear Posted February 14, 2006 Share Posted February 14, 2006 (edited) FX live feed shows sterling at 1.7345 and dropping. The markets are reacting to the mere possibility of a rate cut. http://www.fxstreet.com/nou/graph/liverealtimequotes.asp Edited February 14, 2006 by Realistbear Quote Link to comment Share on other sites More sharing options...
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