Wednesday, Nov 11, 2009

Mervin Swervin the Truth on Inflation

Bloomberg: Bank of England Lifts Forecasts for Inflation, Growth

Nov. 11 (Bloomberg) -- The Bank of England raised its forecast for economic growth and said inflation may exceed the 2 percent target in 2012 even if policy makers start increasing interest rates from a record low.
However we won't be raising interest rates as we'd like inflation to be way above the 2% target and we'll keep coming up with various reasons why we need to continue QE and keeping interest rates low.

Posted by str 2007 @ 11:23 AM (1259 views)
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9 Comments

1. hpwatcher said...

However we won't be raising interest rates as we'd like inflation to be way above the 2% target and we'll keep coming up with various reasons why we need to continue QE and keeping interest rates low.

Yes, the UK government want to keep property prices high - forget about the future and people saving, lets be irresponsible.

Wednesday, November 11, 2009 11:30AM Report Comment
 

2. jack c said...

It is difficult to control once you let the inflation Genie out of the bottle

Wednesday, November 11, 2009 11:50AM Report Comment
 

3. mander said...

King said on live TV:

"Recent rise in asset prices is good: It would have been worse to let assets fall and then rebound."

So this is the economic strategy: inflating asset values away from economic reality and making impossible for our children to own a house unless they will be born in a rich family.

Great,

Wednesday, November 11, 2009 12:21PM Report Comment
 

4. mountain goat said...

Not reported by Bloomberg but SKY Merv said "bank lending will probably remain weak over the next three years".

When he says inflation may rise he means "higher prices". Then he says credit will contract (lending weak and people have to keep paying back existing loans). So in conclusion the economy will effectively suffer deflation (contracting broad money supply) with rising prices.

Wednesday, November 11, 2009 01:24PM Report Comment
 

5. stillthinking said...

Is this credit inflation or currency debasement? Is this an expansion of credit for real economic expansion or simply the effect of printed cash? I'm guessing this is the second one.
In which case how exactly do they control the inflation, if the only tool is interest rate rises on the real economy which didn't get the printed money, and so can't pay it back.

Wednesday, November 11, 2009 01:31PM Report Comment
 

6. mountain goat said...

Stillthinking @5- Is this credit inflation or currency debasement?

Based on what I wrote @4 he seems to think we are in for more currency devaluation or rising cost imported goods.

Wednesday, November 11, 2009 01:56PM Report Comment
 

7. mountain goat said...

close your tags mg!

Wednesday, November 11, 2009 01:57PM Report Comment
 

8. mountain goat said...

try again

Wednesday, November 11, 2009 01:59PM Report Comment
 

9. Ndg said...

Guns for show, knives for a pro. Deflation for assets, inflation for cashets.

Wednesday, November 11, 2009 02:03PM Report Comment
 

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