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No Rate Cuts Before Year 2010 - Ft & Boe


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I think it's the front page of Thursday's FT, as previewed on BBC N24.

Perhaps they'll even hike, who knows.

edit

They are interpreting King at the BoE http://www.ft.com/cms/s/f7095674-21a7-11dd...com%2Fhome%2Fuk

______________________________________________________________________ _____________^

ooh, someone's not happy at the FT !

(BoE - the bank that likes to say... No, not this time VIs!)

Edited by The Last Bear
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Not really rocket science? Rates should be by now around 6.5%, but no we are at 5%, why well the f000kin yanks told us to drop and swallow, so we did, now we are importing inflation and killing our currency, cheers tweedle dim and tweedle dum?

F00kin idiots Brown Dim and Darling dum!! :lol:

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And droopy sausage Roger Bootle, here asking for rates to be cut and cut and cut and cut and cut...

http://www.telegraph.co.uk/money/main.jhtm.../12/ccom112.xml

Bootle's about as much use as an ashtray on a motorbike. The guy's clueless, in 2005 he was saying interest

rates should be cut to 3.5%. Just imagine if they'd listened to him, what inflation would be at now. Even with

the quarter percent cut in 2005, inflation still rose to 3.1% within 18 months. The guy's a total muppet. Go

and buy his book. It's called, and you'll like this one, 'The Death of Inflation'. His publishers are currently

toying with making it only available in Japan.

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Bootle's about as much use as an ashtray on a motorbike. The guy's clueless, in 2005 he was saying interest

rates should be cut to 3.5%. Just imagine if they'd listened to him, what inflation would be at now. Even with

the quarter percent cut in 2005, inflation still rose to 3.1% within 18 months. The guy's a total muppet. Go

and buy his book. It's called, and you'll like this one, 'The Death of Inflation'. His publishers are currently

toying with making it only available in Japan.

:lol::lol:

And I must get his book for 50p at the charity shop, promises to be even funnier than some of my old Private Eyes.

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Rates should be by now around 6.5%, but no we are at 5%,

Incorrect, Global rates should be around 8%, inflation terrifies Central Bankers but in their attempts to find a balance and not crucify the Debtors they will fail to do their jobs thus creating a further crisis in the future. ;)

And Crispin agrees

Here in London, Crispin Odey the leading investment fund manager says global interest rates should now be around 8%. The threat of inflation posed by the oversupply of money needs to be challenged. Higher interest rates would slow the growth in lending and debt that has fuelled so much of the bubble in money. Central bankers are starting to get frightened at what they see, and want to raise interest rates, says Odey. [but] the fears of over-indebted Western economies being skittled over by rising interest rates will only ensure that monetary policy remains accommodating.
Edited by Ferret
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Incorrect, Global rates should be around 8%, inflation terrifies Central Bankers but in their attempts to find a balance and not crucify the Debtors they will fail to do their jobs thus creating a further crisis in the future. ;)

And Crispin agrees

Global rates will get there eventually. Like Churchill said about the Americans they will do the right thing, after they've tried everything else. :)

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Incorrect, Global rates should be around 8%, inflation terrifies Central Bankers but in their attempts to find a balance and not crucify the Debtors they will fail to do their jobs thus creating a further crisis in the future. ;)

And Crispin agrees

8% fine by me, but do not want to sound to doom and broom?

The thing is, by raising rates, cash may stay in cash rather than moving from property to commodoties, thus pushing inflation of small items even higher, thus creating the mess even messier??

Edited by Panda
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Well that should simply any future MPC polls on here. Only 2 options to worry about.

I should think a good few bottles of Scotch being downed about now by some VIs, hope they're looking forward to selling their newbuild rabbit hutches to the govt for less than they cost to build.

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.........cue Alastair Darlings letter to the Bank instructing them to focus on growth and not inflation. I wouldn't put it past them at all.

Brown will definitely be thinking it even if Darling as no concept of what any of it means.

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Is this the reason for Aussie rates being high today, The RBA have got it right on their prediction.

Note the date.

RBA warning of 'meltdown'

David Uren, Economics correspondent

27sep05

FURTHER rises in oil prices, the collapse of a major bank or an unexpected jump in inflation could be all it takes to send the increasingly fragile global financial system into meltdown.

The Reserve Bank of Australia warned yesterday that the current calm in financial markets could be the prelude to a storm that could wreak havoc in the world economy.

The RBA believes the boom in markets for shares, bonds and housing in many countries is unsustainable.

The warning came as share prices in Australia reached a new high point, while a rush to invest in Australian bonds is pushing down long-term interest rates.

"The preconditions are in place for quite abrupt swings in sentiment and a disruptive snap-back in pricing," the central bank says in its latest review of the health of the financial system.

The Australian share market soared yesterday, with the benchmark All Ordinaries index rising 51.3 points to a record 4565.3.

The share market has risen by more than 12.5per cent in the past four months.

And the RBA says a key measure of all the world's share markets is now 62per cent higher than its 2003 nadir, with the biggest gains made in the riskiest markets. The bank says that financial markets have been acting on a belief that there will be no sharp changes in interest rates around the world. This has resulted in huge investments in government bonds.

In Australia, the long-term interest rate, which is set by the 10-year government bond rate, has been below the cash rate set by the RBA since March.

The belief that rates will remain stable has made investors more willing to borrow to buy shares and bonds.

And with long-term interest rates at historically low levels, investors in international financial markets -- such as insurance companies, banks and superannuation funds -- have been seeking out riskier assets that pay higher returns.

The trend for people to borrow more heavily than before has extended to housing markets, which are still booming in many countries around the world.

"The concern is that the increase in prices and leverage across a range of asset markets might be sowing the seeds for future problems," the RBA says.

"In many markets, there seems to be considerably more scope for asset prices to fall than to increase."

The Reserve Bank says the sooner the correction occurs, the better, as the magnitude of the shock is likely to increase if the boom continues for a few more years.

It says world markets could be sent plunging by a general reassessment of risk in world financial markets.

The possible triggers for such a reassessment include a further increase in oil prices, which hit a record above $US70 a barrel this month, the default of a big borrower such as a bank, or an unexpected rise in inflation.

The RBA believes the risks of Australia's housing downturn triggering a recession have receded, although it warns that the risks have not entirely disappeared.

"The high levels of household debt make the household sector vulnerable to a change in the generally favourable economic and financial climate," the bank says.

Although housing prices levelled out over the past year, it says, home owners are still increasing their debts.

Household interest payments are now equivalent to a record 9.8per cent of household disposable income.

"Those with the highest debt-servicing burdens, or the smallest buffers on which to fall back in adverse circumstances, are often those that have taken out loans only recently, as well as lower-income households and investors," the bank says.

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People are using leverage to protect themselves against understated inflation as they see the real value of their money fall. The central banks are encouraging this. It will create a bigger bust.

Yeah, I agree with this. The central banks don't seem to have twigged yet that it's the prolonged period of zero or even negative real interest rates that is promoting excessive risk taking and directly contributing to the distortion of normally functioning markets.

Their solution? Lower real interest rates even further. Good call, guys.

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Yeah, I agree with this. The central banks don't seem to have twigged yet that it's the prolonged period of zero or even negative real interest rates that is promoting excessive risk taking and directly contributing to the distortion of normally functioning markets.

Their solution? Lower real interest rates even further. Good call, guys.

I agree, I think we can see more interest rate falls on the back of further house price falls.

Don't agree with it, just think this will be the knee jerk reaction called for in attempt to reassure the general public.

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name='FreeTrader' post='1120679' date='May 15 2008, 01:01 AM']Wrong century. This is what Joe Sixpack 2008 looks like when he realises his home equity is about to disappear:

Just think if he did not keep buying sixpacks old Joe could have paid that money off his mortgage giving him more equity. ;)

Never party on your equity it will lead to disaster.

Edited by Ferret
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I think it's the front page of Thursday's FT, as previewed on BBC N24.

Perhaps they'll even hike, who knows.

edit

They are interpreting King at the BoE http://www.ft.com/cms/s/f7095674-21a7-11dd...com%2Fhome%2Fuk

______________________________________________________________________ _____________^

ooh, someone's not happy at the FT !

(BoE - the bank that likes to say... No, not this time VIs!)

This is silly they knee jerking on every short term event, did they not really see this coming when they only lowered interest rates a short time ago?

Edited by Chrysalis
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With wage inflation hitting 4% today interest rate rises are a done deal. Don't say i didn't warn you.

Hey, your internet-fake-name is rather apt now isn't it? I mean, it's 'Time to RAISE interest rates'!! It's the SAME as might be going to, like, HAPPEN!

Weird huh?

Bet you hadn't thought of that as you were typing! Amazing!

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Wrong century. This is what Joe Sixpack 2008 looks like when he realises his home equity is about to disappear:

HomerScream.png

That image is how many of us feel when we see the prices rocket of everything from lemons to rice to fuel.

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  • 439 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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