Wednesday, May 12, 2010

Try to decipher what each comment means

Bank of England voices fears over UK deficit and European debt crisis

"The Bank of England issued a stark warning this morning that worries about countries' public finances threaten economic growth and that Britain's new government must act "sooner rather than later" on its own deficit. The central bank played down concerns about high inflation and suggested it would fall back below the government-set 2% target over the next two years, even if interest rates are held at their current record low".

Posted by alan @ 02:52 PM (1257 views)
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3 thoughts on “Try to decipher what each comment means

  • need-a-crash says:

    Try to decipher what each comment means… Ok, “We the MPC were appointed by a Labour government to do their bidding. That involved tracking CPI in order to keep IR’s significantly below the level they should have been over the last decade. This allowed us to pursue Bill Clinton’s Left Wing agenda of ‘equality’ via expanding home ownership. Banks had previously ‘discriminated’ against the lower social classes by not giving them mortgages. They claimed this was because the lower social classes either didn’t like huge debt or were unable to repay huge debt. However we, the Left Wing intelligensia know that the banks wouldn’t give them mortgages because secretly they wanted to keep poor people poor. Unfortunately the banks went bust in 2007, over huge mortgage arrears (can’t imagine why) so we, along with our friends at the Fed adopted Zirp an even more extreme version of the policy that got us into this original mess. Now it looks as though whole countries are about to go bust… perhaps our engineered house price boom has gone a bit too far?”

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  • well written need-a-crash

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  • stillthinking says:

    The snag in this “honest” account, is that everything Swerve says is designed to alter the market on the cheap and bears no relation to reality. The reason why deflation is still on the way is because 1/3 of the UK money stock is saved abroad by ardent savers and with little to no chance of coming back before they, in their own good time, decide to spend because old and decrepit probably.
    So while the money needed to pay back the debt is abroad, the debt is unfortunately here. So he can pump 200 billion to ameliorate the first nasty shock from money shortage, but I doubt very much he can do such a stupid thing again, because at some point the money will flow back and then oh no too too much indeed.
    Almost certainly Swerve is worried that the good days of a devalued sterling(causing money imports) are over now the euro has found a sneaky way to be worth even less thanks to greece.
    Probably he is attempting to offset the sterling strength caused by the coalition announcement leading to austerity measures as he points out the world has never seen before. Will dramatically fleecing the UK electorate to reduce the deficit cause inflation? No. And it is hard to see the point of fleecing said electorate to reduce demand and debt if simultaneously he pumps money in by QE.
    More and more Swerve reminds me of a potential lord of the flies Pigsy who didn’t have the misfortune to get stuck on an island in his early years.

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