Sunday, September 8, 2013
Rates aren’t rising.
"Anyone who did act on his forward guidance would have lost a bundle of money" because enough people think he is not going to raise rates, and if he is not going to do that, then gilts yields are going to have to rise to compensate people for holding sterling. Article lays out some of the issues and concludes that financial repression will continue, in the form not just of the low base rate but also through the regulatory framework. Saving won't be worth it at 3%. My own quote on Mervyn "Anyone who did act on his inflation targeting remit would have lost a bundle of money". They are both bundle of money losers!