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Bo E: Inflation Or Recession: Telegraph

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http://www.telegraph.co.uk/money/main.jhtm...7/ccprof127.xml

Business profile: MPC 'institutionally on the side of higher rates'

Last Updated: 12:19am BST 29/08/2007

'Mervyn King has two choices, one, he goes down in history as the man who presided over a small recession, and two, he goes down in history as the Governor of the Bank of England who lost control of inflation,' Stephen Nickell tells Edmund Conway
Stephen Nickell says that unless more homes are built, property prices could climb to 10 times average earnings
'He said, 'Crisis? What crisis?' Ooh, I hope he doesn't live to regret that - that's rather a hostage to fortune." Stephen Nickell, 63, chuckles away mischievously.
The markets are in freefall; money market interest rates are soaring; it is looking worryingly as if this might well be the credit crunch the doomsayers had been predicting, but only a few days earlier Bank of England governor Mervyn King stood up and issued a surprisingly reassuring statement about the markets.

Thus far Gordon has been on the side of inflation as evidenced by the reality of HPINFLATION and his policy of keeping IR accomodative (behind the real rate of inflation). The bank lost control years ago and now the price of keeping HPI-MEW-BTL and the supporting system of cheap and easy credit is about to be paid. There is NO choice between inflation and recession. The price of inflation IS recession--you don't get to choose which one.

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This man, who GB just put in charge of increasing the rate of housebuilding in order to solve the housing affordability crisis, is a total MORON!!!

"In Spain you can see the consequences of giving local government incentives for building: you just get huge amounts of building - 700,000 last year in a country with a population less than two thirds of the UK. I'm not suggesting that's what we want but it shows the consequences of giving the right incentives."

Do you think he has any clue as to what effect all that house building in Spain had on house prices there, in one of the few countries to experience higher housing inflation that the UK over the past decade? Doing the same thing here is going to solve the problem how?

There's something just so ironic (or is the correct term incompetent?) about putting one of the MPC doves who created the whole housing bubble in the first place in charge of finding a solution.

And as for the MPC being institutionally on the side of higher interest rates, what a crock. By law, the MPC is targeting a inflation statistic that is completely irrelevant to measure the real cost of living. Institutionally, it's on the side of creating a housing bubble.

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And as for the MPC being institutionally on the side of higher interest rates, what a crock. By law, the MPC is targeting a inflation statistic that is completely irrelevant to measure the real cost of living. Institutionally, it's on the side of creating a housing bubble.

15 months over target and Nickell is talking of a hawkish bias.Central Bankers are totally to blame for the present turmoil.Only retards could set rates at 3.5%(MPC)and 1%(Fed) and not expect it to cause trouble in the future.

We give the BOE independence after 300 years and they have risked the solvency of high street banks for the first time since the 1920s.

I suppose we can't expect more from politically correct appointments.We build a millennium dome and put Jenny Page in charge after she has jusy destroyed Equitable Life because she looks like a Lesbian Leftie.Presumably Lomax got the nod for the same reason.

Edited by crashmonitor

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15 months over target and Nickell is talking of a hawkish bias.Central Bankers are totally to blame for the present turmoil.Only retards could set rates at 3.5%(MPC)and 1%(Fed) and not expect it to cause trouble in the future.

We give the BOE independence after 300 years and they have risked the solvency of high street banks for the first time since the 1920s.

I suppose we can't expect more from politically correct appointments.We build a millennium dome and put Jenny Page in charge after she has jusy destroyed Equitable Life because she looks like a Lesbian Leftie.Presumably Lomax got the nod for the same reason.

Very good. One of the funniest posts i have seen on here for a while. Shame its true.

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This man, who GB just put in charge of increasing the rate of housebuilding in order to solve the housing affordability crisis, is a total MORON!!!

"In Spain you can see the consequences of giving local government incentives for building: you just get huge amounts of building - 700,000 last year in a country with a population less than two thirds of the UK. I'm not suggesting that's what we want but it shows the consequences of giving the right incentives."

Do you think he has any clue as to what effect all that house building in Spain had on house prices there, in one of the few countries to experience higher housing inflation that the UK over the past decade? Doing the same thing here is going to solve the problem how?

There's something just so ironic (or is the correct term incompetent?) about putting one of the MPC doves who created the whole housing bubble in the first place in charge of finding a solution.

And as for the MPC being institutionally on the side of higher interest rates, what a crock. By law, the MPC is targeting a inflation statistic that is completely irrelevant to measure the real cost of living. Institutionally, it's on the side of creating a housing bubble.

I think it's safe to say all that extra building in Spain has helped to bring down prices :-)

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15 months over target and Nickell is talking of a hawkish bias.Central Bankers are totally to blame for the present turmoil.Only retards could set rates at 3.5%(MPC)and 1%(Fed) and not expect it to cause trouble in the future.

We give the BOE independence after 300 years and they have risked the solvency of high street banks for the first time since the 1920s.

I don't believe for a moment that the BoE has been truly acting independently. The MPC has been staffed with a load of people hand-picked to follow government thinking. The illusion of independence is just there so the government doesn't have to take the blame when the smelly stuff hits the fan.

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