Thursday, July 24, 2014

Unreliable boyfriend?

Rate rise could push Britain back into recession says Carney: Fears over effect of household debt

- The Canadian Bank of England governor warns that a rate rise is on the way - With no increase, the housing market could spiral out of control, he says - Rates have been kept at 0.5 per cent since the depths of the crisis in 2009

Posted by hpwatcher @ 11:37 AM (5637 views)
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11 thoughts on “Unreliable boyfriend?

  • I guess they could increase headline interest rates for banks whilst buying government debt at record low levels by printing money.

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  • they can’t kick can down road for much longer the road is closed and there is a cliff on other side of road closure

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  • I know he has not been here for long, but can Camsborne please tell him that the housing market has already spiralled out of control, and that whatever control over the next set of events that he thinks that he has got he should be aware that world markets will determine what will be. I know that he and others of his ilk have an old fashioned view that they can hold back the tide, but like Knut (I know that is the wrong spelling, but the moderator will not accept the true and possibly spoonerist spelling) and all of the other Knuts in government, they will learn that they are mistaken and we will pay.

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  • High mortgage repayments cut spending on other things and lead to recession? No mention of the problem of renters, who spend a much higher % of their income on rent than house owners pay in mortgages. Higher rates could mean lower house prices and lower rents and more for renters to spend on other things. Also, how much extra would savers spend if rates went up?

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  • It seems that Carney is playing the public like a fiddle. Telegraph and FT are saying that this talk signals a rate rise, whereas the Daily Mail and a few others say that it signals no imminent rise.

    In reality, interest rates follow and do not lead the market. They can follow for a short time, but global capital flows determine things in the longer run. Maybe that is part of the purpose of the fabricated Ukranian shoot down, to take some heat out of the market and put capital controls on hot money out of Russia? The EU did that recently with the fake out bank heist in Cyprus, also affecting Russians disproportionately. The EU is freaking out about the possibility of a powerful resource rich Russia, which could, should it harness itself, be many times more powerful than the EU, which is also the case for Africa and both central and south America.

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  • I was searching for info on Carney earlier today. From what I can find in his career as a centeral banker in Canada and the UK he has never put interest rates up.

    I am sure him and his advisors know what they’re doing – causing the biggest bubble and subsequent financial disaster in history. What the feck are they going to do next time there is a downturn? Last time the cust uinterest rates 5%, they’re not going to be able to do that next time. I suspect that they don;t care, theyre just working for the next bonus then they’re the heck out of there – someone elese problem. Well that’s what I would do, exactly the same if the sho was on my foot.

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  • Whilst Carney was in Canada, there was a house price boom. Did he use similar flip flopping there to distract the public from an easy monetary policy for the boys? I guess you could call him a slick financial prostitute? Maybe they should put a red light up at the BOE?

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  • There was a blogger on daily mail from Canada who said he used all the same language there but
    Never did anything about rates

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  • Seeing is believing when it comes to UK rate rises and in any event it will take approximately 10 years to get back to the long term average assuming they started raising rates in say Autumn 2014 by 0.25%

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  • i am beginning to think he will increase interest rates…….in tandem with what is happening in the US taper and all that.

    UK is a US puppet state, and will do whatever they say.

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  • Interesting that Carney said he is not concerned with house prices, but with personal indebtedness. I assume he realises the other number in calculating the monthly nut is asset purchase price. If house prices weren’t so high, interest rates could go up, LTV could come down, and we’d be back to a normal market. He is now committed to keeping asset prices where they are. Those prices are brought forward from the future by a decade or two. The chances of another recession, inflation, or black swan happening in that time are pretty high, and one way to prevent a crash is for loose lending to come back. Central banks have got to find another way to deal with boom bust cycles.

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