Tuesday, Jan 13, 2015

Deflation and negative rates become a certainty

Financial Times: UK inflation falls to lowest in 15 years

Will folk please write below when they predict the rate cut to 0.25% will occur? My bets are on for June. Oil prices are still falling, with only some of the fall fed through to prices.

Posted by libertas @ 02:42 PM (2195 views)
Add Comment
Report Article

9 Comments

1. libertas said...

Crude oil has hit the $44 handle, whilst Brent has hit the $46. Part of this collapse is a realignment as folk realise USA will soon become oil independent and be forced to legalise oil exports, at which point the premium of Brent of Crude disappears. We can almost see that now with Brent only being $2 more than Crude, with both tantalisingly close to their 2008 lows. I thought that would be a double bottom. Question is whether we get a dead cat bounce there as short contracts issued in 2008 are trigged, causing a spike in buying, or if that level has no support and we crash down towards $20 or even $10.

Everybody was looking for a 90% crash in the stock markets. We got a crash, but all crashes are different from the last, and this time it is commodities.

Tuesday, January 13, 2015 02:45PM Report Comment
 

2. wdbeast said...

Housing prices have behaved like a commodity too though haven't they!

So I guess we know what will happen to those too!!

Tuesday, January 13, 2015 02:54PM Report Comment
 

3. libertas said...

wdbeast, housing is not a commodity, it is a yielding asset that is leveraged to debt. Debt is becoming cheaper and consumers will have more cash in their pockets. I would not bet on house prices falling like oil.

Tuesday, January 13, 2015 02:58PM Report Comment
 

4. hpwatcher said...

ZZZZzzzzzzzzzzzzzzzzzzzzzzzzzzzz

Tuesday, January 13, 2015 03:15PM Report Comment
 

5. reticent said...

@4

+1

Tuesday, January 13, 2015 03:17PM Report Comment
 

6. Mark said...

+2 because he's sooooo wrong, even if mortgages were cheaper in terms of interest, the average wage/house price ratio is still too high. Even if you handed out loans with zero interest most many could not afford it. You need to take a look at the long term debt cycle libertas, we are teetering on the edge of a period of huge deflation which will bring everything down because wages will not be rising anytime soon.

Tuesday, January 13, 2015 04:15PM Report Comment
 

7. Bill Darblay said...

Depends what flavour muppet is in charge from May onwards.
The only way out is to stimulate local and small business and the only way to do that is a transfer of wealth from Elites to give as income for the Plebs. So we know it won't happen. Roll on a Japan-like 25 year stagflation wake.

Tuesday, January 13, 2015 05:21PM Report Comment
 

8. Cuddlybear said...

Why bet on June for the rate cut?

Based on these stitch-up merchants, how about March or April as an election bribe?

Oh no sorry BoE is independent of Govt....

Tuesday, January 13, 2015 07:43PM Report Comment
 

9. libertas said...

BOE Governor ADMITS deflation now possible:
http://www.telegraph.co.uk/finance/economics/11341714/Deflation-fears-loom-as-inflation-plunges-to-all-time-low.html

When will he admit the planned rate cut to 0.25%? 0.5% will be restrictive if prices are falling.

Tuesday, January 13, 2015 11:22PM Report Comment
 

Add comment

  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • 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
Username  
Admin Password
Email Address
Comments

Main Blog | Archive | Add Article | Blog Policies