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Realistbear

Figures Due Tuesday To Show Too Much Money In Economy

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http://www.thisismoney.co.uk/news/article....01&in_page_id=2

Cash glut fuels inflation fears

Dan Atkinson, Financial Mail

18 June 2006

INFLATION
fears could be stoked this week by official figures expected to show continuing rapid growth in the amount of money in the economy.
Hard on the heels of Bank of England Governor Mervyn King's warning last week that recent monetary policy may have been too slack, the May figures for money supply, due on Tuesday, are likely to show a continued surge in growth.
As the amount of notes, coins and bank deposits balloons, there are suggestions that ultimately too much money will be chasing too few goods.
If true, it could either push up inflation or widen the already-yawning trade deficit. Either way, sterling could come under pressure.

The canny Scot is going to have to come up with another way of keeping HPI and MEW (the "Miracle Economy") going because it looks like the games up on the raising liquidity trick.

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The canny Scot is going to have to come up with another way of keeping HPI and MEW (the "Miracle Economy") going because it looks like the games up on the raising liquidity trick.

Saw also today that Amex are pulling out of the "balance transfer" credit card market, as apparently the industry loses £600m a year due to rate tarts. If other lenders follow suit, that's another stream of cheap debt that will have dried up.

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The Money Morning e-mail today contained this chart showing M4 lending growth. The credit tap is still wide open in the UK.BP150606.gif

Jesus, that's a pretty big spike right at the end though.

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The last desperate attempts to stave off a looming economic disaster.

Printing money and flooding the economy with cheap credit is the driving force behind HPI. Look what it did in Japan and what happened to house prices as a consequence. When you rely on inflation to stimulate the economy, as Gordon has (HPI), there must be an economic backlash to return prices to equilibrium where price matches the fundamentals, more or less. Our HPI is completely adrift from the fundamentals and has been since about 2002. Cheap credit and printing money has kept Gordon's Miracle Economy going on nothing but opinion for the last 4 years and, as Mervyn says, debt is reality. The bottom line, as always: there ain't no free lunch.

Edited by Realistbear

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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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