Wednesday 19 November 2008

BOE: Lost and without paddle, boat leaking

The notes from the last BOE meeting are out today. They make grim reading. In short as I see it, they say they had little idea of what was going to happen to Lehman's or post Lehman's.

great - they have no foresight, by admission. Historically interest rate adjustments have been use to control the economy over the next 2 years. So a lack of foresight is rather a problem.

Then they go on to note that rates will come down further as inflation falls below target. This is all well and good for the next 6 months. then what?

I fail to see how inflation can remain low when all the deleverage has occured. The £ will be low and imports will cause inflation, the closing of factories will mean less suppliers. less suppliers eqauls infaltion in time as demand picks up again.

Given that commodities et al are markets I fully expect them to over-shoot on the downside. Hence we will have inflation, especially if the dollar tanks too as is likely at some point next year. G20 Global fiscal stimulus is inflationary too in the medium term.

Yet the bank sees maybe 0% interest rates next year. maybe so, but I hope not for long. otherwise the doomsday scenario o f borrowers being killed by deflation and then savers by inflation will come to pass and we will all be immeasurably poorer for it.


Mark Wadsworth said...

As Philip Thomas points out (at some length), the main function of the BoE's MPS is to make things worse than they otherwise would be.

But like any government body that interferes in the markets, their secondary rôle is to create opportunities for speculators. The question remains; what do we bet on now?

Alice Cook said...

That is it exactly; they are clueless and have no idea what is going on. So in the absense of a better idea they cut their rates.

Great post.


Sackerson said...

Thnik you're right. Best to be a borrower who has sufficient equity not to get foreclosed - maybe don't pay off the mortgage, buy gold on the overshoot?

Old BE said...

All I want is another asset-inflation bubble so that I can recover my position in time for the next crunch. If that means 0% rates and a resultant wage spiral then so be it...

Anonymous said...

otherwise the doomsday scenario o f borrowers being killed by deflation and then savers by inflation will come to pass and we will all be immeasurably poorer for it.

That is the plan

Anonymous said...

Apologies for changing the subject, but I’ve been meaning to ask for ages.

I’m going to America in march for a considerable period of time (not on expenses), is it worth getting half my money now just in case the £ gets worse?

I meant to get dollars at Christmas but I was trying to open an American bank account (and failed). I should have just done the layman’s route and just bought it as cash money.

Guess how much I’m kicking myself now?

CityUnslicker said...

Dr Ed - by March the $ could have lost some of its current lustre. FX is so very hard to predict - but perhaps make a small hedge in cash now if you can?

James Higham said...

Difficult to foresee when one is snout high in the trough and lapping it up at the time.

Anonymous said...

aaaa片, 免費聊天, 咆哮小老鼠影片分享區, 金瓶梅影片, av女優王國, 78論壇, 女同聊天室, 熟女貼圖, 1069壞朋友論壇gay, 淫蕩少女總部, 日本情色派, 平水相逢, 黑澀會美眉無名, 網路小說免費看, 999東洋成人, 免費視訊聊天, 情色電影分享區, 9k躺伯虎聊天室, 傑克論壇, 日本女星杉本彩寫真, 自拍電影免費下載, a片論壇, 情色短片試看, 素人自拍寫真, 免費成人影音, 彩虹自拍, 小魔女貼影片, 自拍裸體寫真, 禿頭俱樂部, 環球av影音城, 學生色情聊天室, 視訊美女, 辣妹情色圖, 性感卡通美女圖片, 影音, 情色照片 做愛, hilive tv , 忘年之交聊天室, 制服美女, 性感辣妹, ut 女同聊天室, 淫蕩自拍, 處女貼圖貼片區, 聊天ukiss tw, 亞亞成人館, 777成人, 秋瓷炫裸體寫真, 淫蕩天使貼圖, 十八禁成人影音, 禁地論壇, 洪爺淫蕩自拍, 秘書自拍圖片,

做愛的漫畫圖片, 情色電影分享區, 做愛ㄉ影片, 丁字褲美女寫真, 色美眉, 自拍俱樂部首頁, 日本偷自拍圖片, 色情做愛影片, 情色貼圖區, 八國聯軍情色網, 免費線上a片, 淫蕩女孩自拍, 美國a片, 都都成人站, 色情自拍, 本土自拍照片, 熊貓貼圖區, 色情影片, 5278影片網, 脫星寫真圖片, 粉喵聊天室, 金瓶梅18, sex888影片分享區, 1007視訊, 雙贏論壇, 爆爆爽a片免費看, 天堂私服論壇, 情色電影下載, 成人短片, 麗的線上情色小遊戲, 情色動畫免費下載, 日本女優, 小說論壇, 777成人區, showlive影音聊天網, 聊天室尋夢園, 義大利女星寫真集, 韓國a片, 熟女人妻援交, 0204成人, 性感內衣模特兒, 影片, 情色卡通, 85cc免費影城85cc, 本土自拍照片, 成人漫畫區, 18禁, 情人節阿性,

Anonymous said...

情色電影, aio交友愛情館, 言情小說, 愛情小說, 色情A片, 情色論壇, 色情影片, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊美女, 視訊交友, ut聊天室, 視訊聊天, 免費視訊聊天室, a片下載, av片, A漫, av dvd, av成人網, 聊天室, 成人論壇, 本土自拍, 自拍, A片, 愛情公寓, 情色, 舊情人, 情色貼圖, 情色文學, 情色交友, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 色情遊戲, 情色視訊, 情色電影, aio交友愛情館, 色情a片, 一夜情, 辣妹視訊, 視訊聊天室, 免費視訊聊天, 免費視訊, 視訊, 視訊美女, 美女視訊, 視訊交友, 視訊聊天, 免費視訊聊天室, 情人視訊網, 影音視訊聊天室, 視訊交友90739, 成人影片, 成人交友,

免費A片, 本土自拍, AV女優, 美女視訊, 情色交友, 免費AV, 色情網站, 辣妹視訊, 美女交友, 色情影片, 成人影片, 成人網站, A片,H漫, 18成人, 成人圖片, 成人漫畫, 情色網, 日本A片, 免費A片下載, 性愛, 成人交友, 嘟嘟成人網, 成人電影, 成人, 成人貼圖, 成人小說, 成人文章, 成人圖片區, 免費成人影片, 成人遊戲, 微風成人, 愛情公寓, 情色, 情色貼圖, 情色文學, 做愛, 色情聊天室, 色情小說, 一葉情貼圖片區, 情色小說, 色情, 寄情築園小遊戲, 色情遊戲, 情色視訊,