Jump to content
House Price Crash Forum
Sign in to follow this  
bubbleturbo

Trouble Ahead Warns King

Recommended Posts

http://www.thisismoney.co.uk/investing-and...55&in_page_id=3

Yesterday the FTSE 100 closed down 34 points at 5620, a modest fall compared to daily falls of up to 170 points over the last few weeks. To make matters worse, Mr King made subtle threats that interest rates, which have been frozen at 4.5% since August last year, could go up.

He said the Bank of England's monetary policy committee must 'if necessary, revise its judgments' after ten months of leaving rates on hold. In a move that will amaze economists, he also made a thinly veiled attack on the admired American banker Alan Greenspan.

The former Federal Reserve chairman retired earlier this year in a blaze of glory, hailed by observers as the world's greatest economist. He cut US interest rates to only 1% - a move Mr King criticised. In last night's speech, he argued that this decision, copied in Europe and Japan, may have paved the way for the current turmoil gripping world markets.

By making money so cheap, bankers allowed shares and houses to rocket to unrealistic levels, Mr King claimed.

:lol::lol::lol:

Share this post


Link to post
Share on other sites

"The former Federal Reserve chairman retired earlier this year in a blaze of glory, hailed by observers as the world's greatest economist. He cut US interest rates to only 1% - a move Mr King criticised. In last night's speech, he argued that this decision, copied in Europe and Japan, may have paved the way for the current turmoil gripping world markets."

Indicating that we are not isolated from macro economic events as our 'miracle economy' would have you believe and that the US fate is ours....

Edited by dnd

Share this post


Link to post
Share on other sites

"The former Federal Reserve chairman retired earlier this year in a blaze of glory, hailed by observers as the world's greatest economist. He cut US interest rates to only 1% - a move Mr King criticised. In last night's speech, he argued that this decision, copied in Europe and Japan, may have paved the way for the current turmoil gripping world markets."

Indicating that we are not isolated from macro economic events as our 'miracle economy' would have you believe and that the US fate is ours....

That is exactly what went through my mind. He is admitting that we were affected by the cheap money sloshing around the world. And from that you can deduce that we will be affected by high rates around the world. Even when Iceland raise their rates it affects us although very slightly.

Share this post


Link to post
Share on other sites

Taken form the speech.

Note the section where he takes a slight pop at Greenspan.

Mervyn King for President? :)

One risk is that during the fastest three-year period of world economic growth for a

generation, monetary policy around the world may simply have been too accommodative.

In the main industrialised regions – the US, Euro area and Japan – official interest rates

were very low for a long period. The liquidity created by low official interest rates

around the world has helped to push down long-term real interest rates and compress

credit spreads to unusually low levels. That monetary stimulus is now being withdrawn.

Since January, long-term interest rates have moved up, and now other asset prices are

responding. So far we have seen little more than a modest correction to the prices of a

wide range of assets that had risen sharply over the previous two years. The realisation

that such levels of asset prices were unlikely to be sustainable, coupled with a tightening

of monetary policy in many countries, has injected uncertainty into financial markets.

And it is hardly surprising that, as investors searching for yield realised that they might

have underestimated the uncertainties, the price of risk moved up.

http://www.bankofengland.co.uk/publication...6/speech277.pdf

Share this post


Link to post
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...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.