| Looks like the markets want the money tree fruit again. on 14:02 - Mar 24 with 938 views | SuperKieranMcKenna |
If anything, QE would cause deflation as you are adding more money to the economy but at the same time devaluing it. Hence the zombie economy and zero/negative interest rates since the GFC. |  | |  |
| Looks like the markets want the money tree fruit again. on 14:16 - Mar 24 with 912 views | Cotty |
| Looks like the markets want the money tree fruit again. on 14:02 - Mar 24 by SuperKieranMcKenna |
If anything, QE would cause deflation as you are adding more money to the economy but at the same time devaluing it. Hence the zombie economy and zero/negative interest rates since the GFC. |
You seem confused, inflation IS the devaluation of currency... |  | | |
| Looks like the markets want the money tree fruit again. on 14:17 - Mar 24 with 914 views | nodge_blue |
I know I don't agree with you on everything but I do on this. It's criminal that banks have still allowed products to be developed that are not stretch tested enough and we walk into yet another banking (mini?) crisis 15 years after the last one.
Its smacks of greed and incompetence.
Interest rates have only returned to historic norms and its causing banks issues with falling bond prices. |  |
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| Looks like the markets want the money tree fruit again. on 14:36 - Mar 24 with 862 views | SuperKieranMcKenna |
| Looks like the markets want the money tree fruit again. on 14:16 - Mar 24 by Cotty |
You seem confused, inflation IS the devaluation of currency... |
Inflation is just a measure of price rises, if wage rises are greater than or equal to the rate of inflation then purchasing power is not eroded. | | | |
| Looks like the markets want the money tree fruit again. on 15:05 - Mar 24 with 831 views | Cotty |
| Looks like the markets want the money tree fruit again. on 14:36 - Mar 24 by SuperKieranMcKenna |
Inflation is just a measure of price rises, if wage rises are greater than or equal to the rate of inflation then purchasing power is not eroded. |
Well that's an entirely irrelevant point, but thanks. | | | |
| Looks like the markets want the money tree fruit again. on 15:05 - Mar 24 with 832 views | portmanking |
| Looks like the markets want the money tree fruit again. on 14:17 - Mar 24 by nodge_blue |
I know I don't agree with you on everything but I do on this. It's criminal that banks have still allowed products to be developed that are not stretch tested enough and we walk into yet another banking (mini?) crisis 15 years after the last one.
Its smacks of greed and incompetence.
Interest rates have only returned to historic norms and its causing banks issues with falling bond prices. |
It's the speed of change in the rate environment that's ultimately caused this.
Yes, interest rates were ultra-low by historic norms, but almost an entire generation had become accustomed to this. To all of a sudden hike rates by 400+ basis points in 12 months was always going to be a recipe for disaster.
Covid was always going to cause some level of inflation medium term. If the Banks had accepted this and raised rates steadily, we would have seen inflation fall organically anyway by the end of this year.
In reality, the rising bank rate has done nothing to tame inflation. Collapsing energy/oil prices are doing the job of central banks, although the banks will say that bank rate is the saviour. | | | |
| Looks like the markets want the money tree fruit again. on 15:18 - Mar 24 with 794 views | BanksterDebtSlave |
| Looks like the markets want the money tree fruit again. on 14:02 - Mar 24 by SuperKieranMcKenna |
If anything, QE would cause deflation as you are adding more money to the economy but at the same time devaluing it. Hence the zombie economy and zero/negative interest rates since the GFC. |
https://www.economicshelp.org/blog/1047/economics/quantitative-easing/
Quantitative easing is also seen as a solution to deflation. During a period of deflation (falling prices) there is a reduction in consumer spending, often causing a recession. Quantitative easing can help increase inflation closer to the government’s inflation target of 2%. |  |
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| Looks like the markets want the money tree fruit again. on 15:44 - Mar 24 with 729 views | SuperKieranMcKenna |
| Looks like the markets want the money tree fruit again. on 15:05 - Mar 24 by portmanking |
It's the speed of change in the rate environment that's ultimately caused this.
Yes, interest rates were ultra-low by historic norms, but almost an entire generation had become accustomed to this. To all of a sudden hike rates by 400+ basis points in 12 months was always going to be a recipe for disaster.
Covid was always going to cause some level of inflation medium term. If the Banks had accepted this and raised rates steadily, we would have seen inflation fall organically anyway by the end of this year.
In reality, the rising bank rate has done nothing to tame inflation. Collapsing energy/oil prices are doing the job of central banks, although the banks will say that bank rate is the saviour. |
Totally agree with what you say. Where inflation has dropped in other countries it’s been largely as a result in falling commodity prices. Inflation in the UK is not dropping as quickly in the UK due to the Brexit impact causing labour and goods shortages.
However, if the BoE hadn’t followed the Fed and raised rates sterling would have continued to weaken against the Dollar, and further hit the cost of imports and Dollar denominated commodities, thus worsening the inflationary impact. | | | |
| Looks like the markets want the money tree fruit again. on 17:51 - Mar 24 with 625 views | BanksterDebtSlave |
| Looks like the markets want the money tree fruit again. on 15:44 - Mar 24 by SuperKieranMcKenna |
Totally agree with what you say. Where inflation has dropped in other countries it’s been largely as a result in falling commodity prices. Inflation in the UK is not dropping as quickly in the UK due to the Brexit impact causing labour and goods shortages.
However, if the BoE hadn’t followed the Fed and raised rates sterling would have continued to weaken against the Dollar, and further hit the cost of imports and Dollar denominated commodities, thus worsening the inflationary impact. |
Such was the deflationary environment in 2008 that almost limitless capitalisation was made available to banks at zero to negative interest so absolutely there was an inflationary impact to get us from potentially highly negative to slightly positive inflation numbers. | |
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| Looks like the markets want the money tree fruit again. on 17:53 - Mar 24 with 622 views | BanksterDebtSlave |
| Looks like the markets want the money tree fruit again. on 14:17 - Mar 24 by nodge_blue |
I know I don't agree with you on everything but I do on this. It's criminal that banks have still allowed products to be developed that are not stretch tested enough and we walk into yet another banking (mini?) crisis 15 years after the last one.
Its smacks of greed and incompetence.
Interest rates have only returned to historic norms and its causing banks issues with falling bond prices. |
If we learn anything from the last few decades it should be that we are governed in the interests of big business and that big business cares not a jot for us. | |
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| Looks like the markets want the money tree fruit again. on 19:19 - Mar 24 with 505 views | LegendofthePhoenix |
Well they've certainly got to find a way to devalue the NHS pay offer, so who are we to argue? |  |
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| Looks like the markets want the money tree fruit again. on 19:26 - Mar 24 with 483 views | J2BLUE |
| Looks like the markets want the money tree fruit again. on 14:02 - Mar 24 by SuperKieranMcKenna |
If anything, QE would cause deflation as you are adding more money to the economy but at the same time devaluing it. Hence the zombie economy and zero/negative interest rates since the GFC. |
Great stuff, we can just do a massive round of QE to drive inflation down then...
/sarcasm |  |
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