Tuesday, December 18, 2007

A billion here and a billion there and soon were talking real money!

ECB lends $500bn to ease credit

Well this is starting to look like a lot of money but what is really worrying is that this is still a drop in the ocean to what the banks need!

Posted by who stole my pension? @ 11:36 AM (1380 views)
Please complete the required fields.



13 thoughts on “A billion here and a billion there and soon were talking real money!

  • The question is where are the central banks getting this money to lend? Do they have it to lend?? or is it just a meaningless gesture, no banks hold gold as security anymore, so it is a total mystery as to exactly who is lending what and on what basis! It is all a bit of nonsense, very similar to subprime lending (but this time with the central banks making subprime loans!!!!!)

    Reply
    Please complete the required fields.



  • ‘a few billion here , a few billion there and soon your talking real money’

    Reply
    Please complete the required fields.



  • They have now committed us all to propping up this crumbling monstrosity. My worry is that the central banks will just keep pouring ever increasing amounts of money in just to delay the inevitable while they cast around for a solution that does not exist. The more they pour in the greater the ultimate crash will be!

    Reply
    Please complete the required fields.



  • converted lurker says:

    renting 2, I agree and disagree. It does appear to be the childish economics of the madhouse, however, if a crash in economic confidence is to be avoided they (the CBs) can in theory; print, print, print, until they find a support/stagnation level. Main problem is the inflationary aspect of which we’ve never/will never, see/have seen the like before. 50 bil imjection lowered LIBOR by 0.1%, 500bl will (in theory) correct it back to parity with bank interest rates thus ‘unglueing’ the credit markets, if only it was that simple…..

    Reply
    Please complete the required fields.



  • sod it i am going to get a 10 million OD and not pay it back, some idiot bank will pay it for m… why should we be sensible any more…e

    Reply
    Please complete the required fields.



  • I’m getting nervous. The numbers are getting beyond my comprehension.

    I keep hearing (Newsnight, Times, etc) that interest rates will plummet. If that happens, where do house prices go?

    The inflation numbers have been reported on elsewhere in this site. I’m having problems believing or understanding what’s going on. All I seem to see is “trust the bankers” – but I don’t anymore…

    Reply
    Please complete the required fields.



  • It’s funny, house prices are now part of inflation targets as economists are talking about avoiding deflation, which you cut interest rates to avoid. So we could care less about “good” inflataion (good inflation is for commodities/assets you own yourself) but have to avoid bad deflation (in assets you own). Self interest doesn’t begin to describe it.

    Reply
    Please complete the required fields.



  • The central banks lost control a long time ago. The government know the game is up. They both know that by throwing billions at the collapsing banking system our standard of living will be eroded through inflation, so they try to pull the wool over our eyes – for the time being – with laughable inflation figures to make us think that they’ve got it under control.

    In my humble opinion not backdating the police force’s pay rise last week was just a cheap political stunt designed to make the public think that the government are tough on inflation. At £30m it’s not saving them anything really, but there’s no strike action to worry about and it was all over the media. It won’t be so easy when the unionised public sector start talking about pay in the new year.

    Reply
    Please complete the required fields.



  • Wealthy Vagrant says:

    Money is worth less.
    “Real” assets are worth more (when priced in money).
    So we get inflation.

    This may stop houses falling in terms of their monetry value, but of course an average house today might be worth 100,000 sunday roasts, tomorrow it will be worth 50,000 sunday roasts.

    Hmmm maybe be we should do that. Chart house value of houses in terms of the number of Sunday roast diners they’re worth, it would be more meanful than pricing them in sterling.

    Reply
    Please complete the required fields.



  • Teachers are expected to go out on strike next year as the postal workers got 3.5% and they are being offered 2%

    Reply
    Please complete the required fields.



  • I think the attempt to try and get things back to ”normal” is looking increasingly fragile; basically ‘normal’ has changed. Pumping this much money will probably have pretty disasterous results. Look at what happened when income tax was hugely cut in 1988, it helped to create the early 90’s HPC.

    Tha fact is that the banks are pretty screwed, because the situation is now out of control. There is a recession coming and no one can help it; it’s just the arrogance of the banks that has led them to think they can stop it. There has been a boom in assets – especially housing – brought about due to cheap money…and that situation has now come to an end. This has left most, unable to pay the mortgage and this happened NOT just because of interest rate rises but simply the increasing cost of living.

    It’s just tough shit.

    Reply
    Please complete the required fields.



  • #1 – central banks have a magic ability to create money from nothing*, part of the system called fractional reserve banking. So money doesn’t come from some other source (e.g. previous taxation), which is not to say it is completely free. It should only be created in exchange for collateral of equivalent value, the danger here is that central banks may be offered assets whose value will be significantly less than the amount of money they are creating to hand out to banks in trouble. The real value of a lot of this debt is in question. When central banks issue money like this, they devalue the currency as a whole and stoke up inflation, in effect a tax on the value of all the other pounds already in circulation as measured by the fall of that currency against others and assets in general.

    * money is fiat issue, not backed by anything, so to create it from nothing is not incoherent. It is merely paper or electronic bits and bytes that we consider to have a given value based upon everyone’s acceptance of it for the purposes of exchange, deferred payment etc. It is a measure of that confidence for exchange. We rely on the central bank not to create too much of it or that confidence evaporates and it tends toward its real value… i.e. zero.

    Reply
    Please complete the required fields.



  • Wake up people, there is not much time left, the EU will complete it’s invasion of Britain in June 2008!

    see http://www.eutruth.org.uk/

    The developing financial crisis is scary, but this could make the situation much worse in Britain!

    To protect the Britain, we must take action sharpish:

    * We must force a recall of all our military to Britain and revoke any oath they took to serve the EU over Britain.

    * We must force a general election to occur before June 2008, to prevent Gordan Brown and the Queen from committing a final act of treason, by signing the sixth EU treaty (effectively the EU Constitution), otherwise this act will effectively abolish Britain, and with it the sovereign power of a British people, the Britain government, the Queen and the Bank of England!

    * To stop haemorrhaging critical money and power to the fraud infested EU, and to the costly, parallel, ‘hidden’ EU government in Britain, we must exit the EU, for all but free trade; this will require that the EU treaties and British laws are revised or revoked, possibly expulsion of some foreign and British nationals, maybe even military action.

    * Any government employee, including Ministers, who deliberately acts to threaten British sovereignty or the stability of Britain, must be sacked without pay and prosecuted appropriately.

    * Any non-government organisation which deliberately acts to threaten British sovereignty or the stability of Britain, must be wound up and its staff, owners and sponsors prosecuted as appropriate. The (EU Marxist) ‘leadership training’ charity Common Purpose should be first-in-line for investigation, there appears to be evidence that this secretive organisation has “Graduates” (members) at key management positions in government, the police, councils, quangos and schools, they even target selected school kids, maybe as “New Pioneers” in a EU Soviet!

    If we doesn’t fix this we are likely to end up living in an EU Dictatorship Police state, you will be shocked at all the personal, trade and professional freedoms we will lose!

    To limit the financial damage of the coming Depression, we should do the following:

    * I think it should become a British banking requirement that any bank trading or based in Britain must regularly declare all of their assets and debt, as audited by an approved valuer, hopefully this will remove much damaging speculation and improve market liquidity.

    * Any new government should make it a priority to streamline government, by phasing out non-core services, replace costly bureaucracy, bogus targets and other ‘dead wood’, with only necessary management and sensible targets.

    * closure of all quangos; any useful functions and appropriate funding should be taken over by elected local or central government.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>