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Us Interest Rate Rises,

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this is taken from financialsense and thought was a very interesting transcript, taking into account everytime the US Fed has raised rates they have, 9/10, entered a recession.

We had a rate raising cycle in 1955, in 56 we got a recession, a couple of years later they raised interest rates in 1959, in 1960 we got a recession. Then we really embarked on a rate raising cycle towards the end of 68 – 1970 we got a recession. We start raising interest rates in 72 and 73, and in 74 we got a recession and a bear market. We were at it once again in 1979 and in 1980 we got a recession. We got another double recession in 1982, and then when they embarked on raising interest rates in 88 and 89, we got a recession in 1990.

And this is the remarkable thing, it’s only been about 4 or 5 years ago that we just came out of the last recession, and the last recession began when the Fed started raising interest rates in the Summer of 1999, and raised interest rates all the way into the Fall of the year 2000. The first thing to break was the financial markets because they were way, way overextended – stocks were selling at looney-tune prices. But we got the break in the stock market, then eventually in 2001 we got a recession. So here we are 3 years later after the last recession in 2001, and in the Summer of 2004 the Fed begins to apply the brakes again, and here it is the year 2006, we’re still raising interest rates. And we use this analogy all the time – it’s not like this is a finely tuned digital system where you can tweak this knob and you can tweak this knob and then you can get things just perfect. It just doesn’t work that way. 9 out of 10 times they keep raising interest rates until they break something, and I’ve got a feeling what they’re breaking right now was the economy.

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And this is the remarkable thing, it’s only been about 4 or 5 years ago that we just came out of the last recession

I'm not convinced that America _did_ come out of the last recession. It just looked that way because of government spending and faked inflation figures.

Growth has probably been below real inflation for that whole period, particularly if you remove government borrowing.

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I tend to agree--we have borrowed our way out of a deserved recession. The West's production has moved to Asia and has been replaced with HPI. When HPI fails due to IR hikes to pay for the "free money" we have been spending when we should have had a recession it will be financial judgment day.

As the old saying goes: There ain't no free lunch.

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  • 301 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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