Monday, September 17, 2007
Sure that IRs are going down?
Housing market 'is heading for a fall'
Greenspan also warned that inflation soon could pick up dramatically and the Bank of England, which has raised interest rates five times in the past year to their current 5.75%, may have to take them into double figures to keep prices down.
Posted by confused76 @ 08:48 AM (786 views)
3 thoughts on “Sure that IRs are going down?”
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Alan says:
About 6 weeks ago I forecast that the Fed would probably cut IRs to provide relief to the housing market in the US.
Today the BBC site said:
“Pressure is building on Mr Greenspan’s successor, Ben Bernanke, ahead of the Fed’s crucial decision on interest rates on Tuesday. Most experts believe the Fed will cut rates in an effort to restore confidence to the financial markets as the scale of the current crisis in the sub-prime mortgage market unfolds”.
Subsequently, I forecast UK will be hard pressed to hold IRs in the UK if the USA drops its IRs sharply (-0.75%).
Unfortunately, dropping UK IRs won’t help inflation, as I’ve said previously.
Ttimgg says:
Greenspans comments are worthless. Check out http://www.globaleconomicanalysis.blogspot.com if you want some incisive commentary.
Inflation is increase in money supply TOGETHER with increase in price.
This is a CREDIT inflation, not a money printing inflation.
The next step is DEFLATION, though the PRICE of food and oil will continue to increase
Intheknowofcredit says:
I used to work in credit around five years ago: we gave credit cards, loans etc away like they were candy. At the time, my colleagues and I said this would come back to haunt the British economy, as many of the people taking these products would never be able to pay them back in full.
Britain has borrowed credit to the max, only it forgot that it has to be paid back sooner or later – get ready!
It seems the banks themselves got carried away.