Tuesday, January 13, 2015

Deflation and negative rates become a certainty

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 (2240 views)
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9 thoughts on “Deflation and negative rates become a certainty

  • 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.

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

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

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  • 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.

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  • ZZZZzzzzzzzzzzzzzzzzzzzzzzzzzzzz

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  • @4

    +1

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  • +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.

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  • 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.

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  • 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….

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  • 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.

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