Jump to content
House Price Crash Forum

Confidence in the Bank of England crashes to record low


Recommended Posts

0
HOLA441
2 hours ago, NoHPCinTheUK said:

This. 
 

This is a SUPPLY SIDE SHOCK. There’s literally nothing a CB can do in this situation. Goods aren’t  simply there, because we killed the oil industry and China is in a permanent lockdown since Feb 2020. 
 

The only thing a gov should do right now is to remove all legislation that prevents the boat to sail at full speed. 

Not true. A supply side shock bootstraps inflation. Without CBs rising rates to match it inflation gets self-sustain as borrowing costs are much lower than asset nominal gains (IRs are below r* + inflation). A good indicator whether inflation has been embedded in the system is the core inflation. 

image.thumb.png.77aa555fe179f427a72b8f164ea4e1c2.pnghttps://tradingeconomics.com/united-kingdom/core-inflation-rate#:~:text=Core Inflation Rate in the,percent in June of 2000.  

Link to comment
Share on other sites

  • Replies 107
  • Created
  • Last Reply

Top Posters In This Topic

1
HOLA442
2
HOLA443
On 10/06/2022 at 17:59, Jolly Roger said:

Why are the public being polled about the Bank of England? A minority of people know what they even do.  An even smaller minority of people have any idea how money is created.

Quite so.

Link to comment
Share on other sites

3
HOLA444
4
HOLA445
5
HOLA446
6
HOLA447
7
HOLA448
On 10/06/2022 at 18:53, Flat Bear said:

I do not think it is enough.

There is nothing they can do now. Western governments have by their actions (taxation, regulation and spending) put the Western system into a flat spin. It does not matter how you jerk the control stick or press the pedals; the outcome is the same.

Link to comment
Share on other sites

8
HOLA449
5 hours ago, Locke said:

There is nothing they can do now. Western governments have by their actions (taxation, regulation and spending) put the Western system into a flat spin. It does not matter how you jerk the control stick or press the pedals; the outcome is the same.

I do not follow your logic or what you are talking about.? I was talking about inflation.

As Scottbeard says that we can only use the figures the ONS gives us for inflation for arguments sake as to make up our own would-be personal conjecture. Although I have argued with him that I believe "REAL" inflation is much higher he is technically correct and we do need some sort of basis to work to, so he is right, unless we believe the ONS are actually deceiving us? which I do not believe they are, deliberately.

So, there are many things that have gone down in value over the past year.

Food has stayed almost exactly the same and only certain items have gone up whilst many have fallen

Figures from feb 2022 CPIH figures (last I could get)

CPI 9% Food and non-alcoholic beverages 9.3% rise so on average prices have gone up just 0.3% which really is not worth writing home about. What is all the fuss about?

Health with a 1.8% rise has actually gone down around 7% and we are seeing real deflation in this sector.

The fact is anything that is costing less than the rise in CPI is going down in "real" value as measured by GBD Sterling.

There is nothing they can do now.

I do not understand. If we do nothing and let the currency loss value at an increasing rate of velocity, we get hyperinflation? Too obvious? So, something has to be done at some stage and the later it is done the worse the situation will be.

I am currently working on my September increases. I might be forced to bring these forwards to August. Average increase was 23.5% in February 2022 and this increase really needs to be the same, but I will end up as many other business owners by increasing to the bare minimum. Why do we do this? As time goes on inflation and expectations of increases become more engrained and we automatically build in increases that take into account increases that have not yet taken place, but we know will happen over a short period of time. Most businesses are not there yet and there are many who will not be able to make this adjustment and they are likely to leave the sector or become unviable. Others without any emotional attachment to the sector will come in and put in place a pricing and business model that does work. In the interim there will be increasing shortages.

Monday 13th June 2022 (today) Is the day I finally realize how bad things actually are. It cannot get any worse surely.

I have had more "offers" of finance than I can remember in one day. Four offers for finance for my business, Two for personal and one letting me know I can get a credit card with an incentive of £100 of something or other if I take it out within a certain time and one letting me know I am able to get finance on an existing account and why haven't I used it yet. Although I did not have any phone calls today there were three that were made last week one of which I answered the phone myself. What annoyed me is the tactics "I phoned you before and you said you may be interested" No I didn't, I would never have said such a thing. If they are doing it to me, they will be doing it to you and everyone else.

The amount of devaluing currency they are trying to off load to anyone that will take it with heavy sales tactics really is unbelievable. 

At thew same time all this is happening I am noting a slowdown in economic activity. This is a marked slowdown which I believe will result in a recession before the end of the year and worse next year. Forget all about the optimistic forecasts the government is giving you the actual situation is totally different.

There is nothing they can do now.

If they do decide to do nothing, then warlord will be spot on

 

 

Link to comment
Share on other sites

9
HOLA4410
10
HOLA4411
11
HOLA4412
12
HOLA4413
13
HOLA4414
14
HOLA4415
15
HOLA4416
4 hours ago, TheResponsibleHouseBuyer said:

Here we go... its being talked about. Good, people should know.

Guy with an economics degree should know the Fed is not run by the govt' it's a quasi private institution and a lot more sinister.  He should read "The Creature from Jekyll Island" 

 

 

Link to comment
Share on other sites

16
HOLA4417
17
HOLA4418
16 hours ago, Flat Bear said:

If they do decide to do nothing, then warlord will be spot on

I'm saying that the levers the BoE are using no longer effect the result they want/need. In fact there are no levers they could use.

It doesn't matter if they raise rates to 15%.

It doesn't matter if they keep rates at 1%.

The inevitable outcome will be various flavours of bad to worse.

In the long run, this is a good thing because it will unwind the debt junkie "businesses" which have been using the government to bleed actually productive people dry.

Link to comment
Share on other sites

18
HOLA4419
On 10/06/2022 at 14:19, Locke said:

The market controls the interest rates. If the government moves them, it can only do so by introducing economic dislocations which erode the efficiency and strength of the markets.

All action taken by the government damages things. Even if the net effect is small for a given action, it is always negative.

Is this really true? Under QE the Bank of England buys long term bonds (with printed cash) specifically to alter the market price (and therefore interest rates) 

Link to comment
Share on other sites

19
HOLA4420
1 minute ago, PropertyMania said:

Is this really true? Under QE the Bank of England buys long term bonds (with printed cash) specifically to alter the market price (and therefore interest rates) 

Read the sentence after that ;)

Link to comment
Share on other sites

20
HOLA4421
3 hours ago, slawek said:

Their pension benefits are indexed by CPI/RPI. That is why they invest in linkers.

https://www.bankofengland.co.uk/-/media/boe/files/about/human-resources/pensionreport.pdf

I know.  Maybe you weren't saying what I thought you were saying.  I thought you were saying "BoE members get index-linked pensions because their fund is invested in index-linked gilts".

Perhaps you were saying two things:

- "BoE members get index-linked pensions because their benefits are linked to RPI/CPI"

- "As a related interesting fact that doesn't directly impact their benefits, the fund is invested in index-linked gilts".

Link to comment
Share on other sites

21
HOLA4422
8 hours ago, Locke said:

I'm saying that the levers the BoE are using no longer effect the result they want/need. In fact there are no levers they could use.

It doesn't matter if they raise rates to 15%.

It doesn't matter if they keep rates at 1%.

The inevitable outcome will be various flavours of bad to worse.

In the long run, this is a good thing because it will unwind the debt junkie "businesses" which have been using the government to bleed actually productive people dry.

It doesn't matter if they raise rates to 15%.

Yes it does. Inflation would come down

It doesn't matter if they keep rates at 1%.

Yes it does. We will get hyperinflation.

Do you not care that money could become worthless?

How would you feed yourself?

How would you defend yourself?

Are you an anarchist?

Link to comment
Share on other sites

22
HOLA4423
Just now, Flat Bear said:

It doesn't matter if they raise rates to 15%.

Yes it does. Inflation would come down

It doesn't matter if they keep rates at 1%.

Yes it does. We will get hyperinflation.

Do you not care that money could become worthless?

How would you feed yourself?

How would you defend yourself?

Are you an anarchist?

I have changed my mind for Thursday's announcement. I think they are going it safe @ 0.25% 

They want people to suffer.

Russia have been able to recover the ruble to all time highs (at a point before first Ukraine war 2014), despite all the sanctions etc. They did this by jacking up interest rates and carrying out other monetary operations.

I don't think it is enough to flog the oligarch mansions and yachts.

Is it too late for us to do the same?

https://www.cbsnews.com/news/russia-ruble-currency-2022/

Link to comment
Share on other sites

23
HOLA4424
6 hours ago, TheResponsibleHouseBuyer said:

I have changed my mind for Thursday's announcement. I think they are going it safe @ 0.25% 

They want people to suffer.

Russia have been able to recover the ruble to all time highs (at a point before first Ukraine war 2014), despite all the sanctions etc. They did this by jacking up interest rates and carrying out other monetary operations.

I don't think it is enough to flog the oligarch mansions and yachts.

Is it too late for us to do the same?

https://www.cbsnews.com/news/russia-ruble-currency-2022/

“They want people to suffer”?! Is that what you’d want if you were in the MPC? No? So why would they?

I voted 0.25 in the poll the other day but the last week has been carnage so I’m now expecting 0.5 as a bare minimum.  We’d all breathe easier if it was 1.0 I think now

Link to comment
Share on other sites

24
HOLA4425
On 14/06/2022 at 16:49, Flat Bear said:

It doesn't matter if they raise rates to 15%.

Yes it does. Inflation would come down

According to some theories. I don't think it would. If it were that easy, how come historical hyperinflations have happened?

On 14/06/2022 at 16:49, Flat Bear said:

It doesn't matter if they keep rates at 1%.

Yes it does. We will get hyperinflation.

We will get hyperinflation anyway, which is why I say it doesn't matter.

On 14/06/2022 at 16:49, Flat Bear said:

Do you not care that money could become worthless?

Yes and no. I care that they have trashed the economy and robbed people for decades. I don't care what the day to day value of a £ is, since I don't have massive savings. As long as my wages keep up with food prices, why should I care?

On 14/06/2022 at 16:49, Flat Bear said:

How would you feed yourself?

Having a job, raising chickens/sheep, growing vegetables I guess.

On 14/06/2022 at 16:49, Flat Bear said:

How would you defend yourself?

I'm 6' and 104kg. I think I will be ok.

On 14/06/2022 at 16:49, Flat Bear said:

Are you an anarchist?

You already know the answer to that ;)

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information