Thursday, 16 December 2021

Interest rate rise klaxon!

My goodness. 

The denizens of the Bank of England have only gone and done it, raising interest rate by 0.15% today. A harbinger of the doom to come. 

Inflation sits at a mere 5% or thereabouts and surprisingly wages for the year have manager, err, 0% rise. Too much covid and change in the economy to sustain wage rises even though some sectors have done well. 

Still this is almost the first rate rise I can remember! People under 30 won't even really know what the Bank of England does or what the significance of interest rats is - we have been in a zero-interest economy for so many years, nearly a decade and a half now. 

Of course, with Quantitative Easing and inflation, real interests rates are at -5%. Holding cash is very bad for your wealth, much better to spend it or buy assets as quick as you can. 

It is still a long way from going back to a 'normal' economy and I still feel in the end the only way back will be with some very high inflation to erode the debt pile of the West vs East dynamic in the world - and that will be so painful that the politicians might try and put it off for generations yet. 


35 comments:

DJK said...

"Inflation sits at a mere 5% or thereabouts..." Er no. RPI is 7.1% and rising.

Anonymous said...

"It is still a long way from going back to a 'normal' economy "

You bet! They won't make 'normal' either.

Scrobs. said...

And buy your funerals now!

None of this 'Can't afford to die' nonsense!

Anonymous said...

Can we hear more about those "interest rats" CU?

E-K said...

Counter intuitive to me but I maxed my borrowing ten years ago and don't have savings.

Gone and borrowed a load again this month. So long as it's wisely invested... or even if it isn't.

Mum has a mortgage clearing amount in the bank so inflation makes no odds with that either. I can't tell her what to do with it unfortunately.

E-K said...

Both loans are fixed rates (one at zero percent) ... but then so was my energy supply !!!

Now

Almost two years and three jabs later I'm turning on the morning news and the bulletins and briefings on Covid are as dramatic and as scary as they've ever been.

I predicted this.

Now I predict that until the NHS has properly bankrupted us we will be doing the same every year.

Anonymous said...

"Counter intuitive to me but I maxed my borrowing ten years ago and don't have savings."

That sounds like a sound strategy in an essentially negative rate interest economic environment.

And but for my abhorance of debt, I have thought that a sound idea too in this enviroment.

As you imply, steer well clear of the unsecured credit card debt which still have rates of around 20%

In this economic environment, go as far into debt as you have the stomach for, obviously, zero rates and interest free.

The most audacious I've done is to buy my new gas central heating boiler on tic, it still rankles me in the back of my mind that I owe them for it.

E-K said...

Anonymous

Yes. I've learned never to trust money. I've piled into an AVC with my pension but that's only for tax reasons and when the boys were growing up no expense was spared on extra education or CV building activities.

I'm sure that everything will be stripped away from us in the form of various taxes anyway but I can't say I haven't done my best.

Contrast.

For a while I was Bosun at the local yacht club and getting them to spend money was like blood out of a stone. I refused to keep fixing knackered old safety boats while there was £100k in the bank being frittered away by inflation and low interest so they sacked me.

E-K said...

Friggin' in the riggin' - 'cause there was fuck all else to do.

E-K said...

And PS

Why is student debt charged at around RIP + 3% ?

The tax rip off has already started, hasn't it !

CityUnslicker said...

Rats are interesting.

Now they have started this, the BOE will have to keep raising rates as the inflation keeps getting away from it.

With this in mind, we may have 2% interest rates by the end of next year. Will be crazy with my levels of debt!

dearieme said...

My father's policy was that we should get as much education as poss because even socialists couldn't steal that from us.

In suppose it could be argued that the socialist policies of grade inflation and degradation of education are intended to make Dad's advice unactionable.

Anonymous said...

"Now they have started this, the BOE will have to keep raising rates as the inflation keeps getting away from it.!

The alternative, they could contract the Sterling zone money supply. Claw back some of last years profligacy.

I'd laugh to hear what the gormless media write about Rishi Sunak under that scenario.

Elby the Beserk said...

dearieme said...
My father's policy was that we should get as much education as poss because even socialists couldn't steal that from us.
=============================================
Not then. Now, lefty infiltration from way back has destroyed state education. Teacher's unions are toxic, and their demands to mask kids at school will damage the health of may kids fore a long time, inhibiting oxygen intake and recycling used CO2.

Two friends, girls of c10 at school. One beaten up by a huge boy with ADHD. Teacher - "You just have to put up with it, that's how he is". Dad goes in - not even an incident report. The other getting horrible text messages from kids in her class. During class. So teacher had no problem with kids using Shitphones in her class. Mum, bless her, demands teacher gets out of class so she can talk to her. School says "no". "OK" says Mum, "I'll come and get her out myself" (this a lass who in her younger days clocked some prat in a night club - she takes no guff when she struts her stuff".

Quite what real education takes place at these institutions god only knows...

Private sector gone woke. Academia long lost to the PoMo crazies. Time to pull the funding, say I.

Seelby The Berk said...

LOL

“Not then. Now, lefty infiltration from way back has destroyed state education. Teacher's unions are toxic, and their demands to mask kids at school will damage the health of may kids fore a long time, inhibiting oxygen intake and recycling used CO2.”

I can’t decide if you are trolling or actually believe what you post

DJK said...

...2% interest rates by the end of next year...

We can but hope.

Elby the Beserk said...

SeelbyTheberk said..
................

Masks or the unions? On masks, there are any number of papers out there clear that the do nothing to protect you, and many mention the effects on child respiration.

As for the unions, really. You only need to listen to the NEU boss to know that kids are the least of her concerns.

Elby the Beserk said...

Teachers? I rest my case...

Article by a trainee teacher. By the way, this started way way back at Teacher training colleges. Whilst we may have a "conservative" (ha bloody ha) government, the public sector, Quangos etc etc are all run by the left. Time for a purge. Stalinist if necessary. Why should I fund the poisoning of society?


https://dailysceptic.org/the-ongoing-indoctrination-of-teachers/

"Thirdly, a huge amount of time is devoted to what I have described as indoctrination. If you combine the lack of value from the vast amount of time spent online with the huge amount of time wasted on this political indoctrination, then it cannot be the case that the education system as it currently exists is producing the best teachers, or drawing out the best of the current trainee teachers. And if this is the case, this can only end up further hurting the younger generations of this country who have already been so neglected."

Anonymous said...

Comment from Faisal Islam about Boris's slogans. Seems he may not be a real conservative and the bankers have noticed.

"350m to NHS = bigger state

Levelling up = bigger role for state, at least initially

Wage rise for all = bigger state (living wage)

Build back better/industrial strategy = bigger state (satellite cos, gigafactories etc)"

So we're going to flush more money into the economy via the State rather than banks.

jim said...

Once upon a time our systems had enough funding and robustness to cope. There were a range of schools with special places for badly behaved and dim kids and disabled kids. Gradually they were closed in the name of integration and cost saving. That worked for a while but further cost cutting and the avoidance of realities is showing through. The wheel may eventually turn.

Similarly with Care in the Community. This worked for a little while whilst the systems still had funding and availability of housing etc. But that too has been whittled away and further whittled away until it is now worth nothing. There is no effective way of dealing with the mad bad and drugged. A psychiatrist friend tells me 'what we need are some safe places with high walls and a strong door'.

Meanwhile taking a look at the Covid numbers the world seems to have gone nowhere in the last year. Numbers are roughly back where they were in January. Except in South Africa where the case numbers are going up steeply. How that translates into soft Whitey deaths is yet to be seen.

To add to our cheerfulness science has not discovered any really novel or useable ideas for the last 30 years. Sure some pharma inventions but they are for sick (poor) people or mean minded governments. Otherwise, the semiconductors have got better just because we spend more on the processing and mechanical stuff is a lot better because of CAD. But nothing fundamentally new.

Would not matter that much except that new discoveries drive new industry and a wide spectrum of jobs. And that does matter. Maybe 2022 will be better - or not.

Don Cox said...

@ jim

You're confusing science with technology.

I don't want to put exact dates on scientific ideas and discoveries, but the progress in microbiology in the past 30 years has been spectacular, especially with the introduction of metagenomics. In astronomy, there has been the discovery of hundreds of planets in other solar systems. In cosmology, dark matter and the multiverse are new.

In technology, there has been the replacement of film cameras by digital, the design of the modern portable phone, the progress toward nuclear fusion power, new types of microscope, the exploration of Mars, the replacement of fluorescent lamps with LEDs, and the Internet.

I'm sure others can suggest plenty more.

Don Cox

Don Cox said...

"Meanwhile taking a look at the Covid numbers the world seems to have gone nowhere in the last year. Numbers are roughly back where they were in January."

Not in Britain. The number of Covid patients in hospitals was 7611 last week, as opposed to nearly 40,000 last January.

The number of cases is higher than in January, but I think this is because there's much more testing.

I don't have the figures for other countries, and they will all depend on the amount of testing.

Don Cox

jim said...

Well, the CCD sensor was invented back in 1969 and the CMOS version a little later. Been used in astronomy ever since. There are no neutrino transistors, we are still stuck with the boring old electron. We suspected far away planets long ago, all we managed was to prove they exist. Interesting but no further forward. We still have no idea about dark matter and still no one understands quantum mechanics. The cellphone traces its roots back to taxi radios and further back to WW2.

Most of our high technology is built on science dating from the 1920s. We are still hoping that nuclear fusion (another old technology) will be tameable but truly new technology still looks very thin on the ground - because we ain't got the science.

As for Covid we had some 45,000 CASES back in January and about 590 deaths but CASES don't translate into hospital beds. At best we only have about 140,000 beds and not all those translate into beds for Covid patients. In any event we allegedly have 2.46 beds/1000 which amounts to about 26,000 useable hospital beds. So 40,000 in hospital looks a bit unlikely.

E-K said...

https://www.spectator.co.uk/article/my-twitter-conversation-with-the-chairman-of-the-sage-covid-modelling-committee

This shocking Twitter exchange between Frazer Nelson and a leading SAGE member.

The upshot is that SAGE only puts forward worst case modelling and ignores the vast probability cloud that says things are going to be OK.

"What's the point of producing models that the government won't act on ?" says the SAGEist.

The Marxists are in control and we are forever doomed to this nightmare.

The abolition of Christmas will now be a yearly event - not because of a disease but because they hate us.

Now pop your masks back on and do what they tell you.

Don Cox said...

The graph on the BBC web site shows nearly 40,000 in hospital in January. Go here and look for a graph made of green vertical lines.

https://www.bbc.co.uk/news/uk-51768274

Maybe you think they are flat out lying ? I know the BBC are biased, but I doubt they would go that far.

I don't think the number of "cases" is at all reliable, but the number in hospitals should be.

Don Cox said...

See also the last-but-one graph on this page, which matches the one on the BBC:
https://coronavirus.data.gov.uk/details/healthcare?areaType=overview&areaName=United%20Kingdom

It does suggest that, at least so far, the Omicron wave is much less dangerous. However, things could get worse next month.

Don Cox

E-K said...

Clearly the centralisation of hospitals has been a disaster. Covid victims converging on regional generals.

My own town (now 30,000 people having risen from 20,000 because of new estates) has seen public services CLOSED DOWN and centralised to the nearest city.

These have become hotbeds of infection.

---

Don.

The NHS cannot survive without a viable economy - we simply must go on a sensible forecast and not worst case all the time. The Nightingales were closed because they were not built to deal with the comorbidities that most covid patients come with.

So when do we go for focused shielding ?

When do we issue fitted FFP3s to vulnerable people ? You think of the sheer waste on useless Nightingales and track and trace and furlough fraud..

When are they going to start telling people to lose weight ?

When are they going to tell anti-vaxxers "No vax, no treatment." ?

Don Cox said...

"When are they going to tell anti-vaxxers "No vax, no treatment." ?"

Never. Doctors will not refuse to treat a sick or dying patient, even when the problem is his or her own fault.

They treat smokers who develop lung cancer, fat people with diabetes, footballers with brain injuries, and mountain climbers with broken legs. The NHS would have an easy time if natural selection was rigorously applied.

Don

Anonymous said...

Don Cox: "Maybe you think they are flat out lying ? "

The BBC are flat out lying. They kicked this whole charade off in the Spring of 2020.

Get 'em to break out the COVID-19 related cases currently in hospital by those actually suffering from vaccine injury, then those who have been vaccinated yet are still in hosptial for COVID.

The COVID-19 vaccine's don't protect you from contracting COVID, don't stop you from getting it bad, nor do the vaccines stop you from transmitting it on to your friends and family. But they do expose you to the risk of a rich variety of vaccine induced autoimune conditions - that for all intents and purposes, can't be treated.

The COVID-19 vaccines are shite.

jim said...

Don

Thanks for the better information. Let us hope we are gradually getting out from under this.

E-K said...

As *with* or *of* still remains a state secret and we STILL don't know anything of the one omicron death (because that is a state secret too)

And the BBC STILL says "Deaths within 28 days..." without including "...of all causes." I'll take it that the graphs are skewed to show worst case as is the modelling.

They are also lying about unvaxxed being in hospitals because Mr Raab has admitted that unvaxxed includes double jabbed now.

When have we ever heard of a vaccine (still on test and the consequences still unknown or *state secret* as with the above) that you need to take three or four times a year ?

DJK said...

"They are also lying..." Think you're reading too much into this, E-K. You don't really want to be on the same side as loonies like Piers Corbyn.

Fact is that every north European country, and some of the northern American states, are facing a series of unpalatable choices right now, using incomplete data. Really, we should be turning our ire on the Chinese, who accidently released the virus in the first place.

Incidentally, I saw a link the other day that claimed that Omicron shows signs of having evolved from Delta in mice. So if you fancy another conspiracy theory, ask yourself if this was a wild mouse or a lab mouse.

Anonymous said...

DJK: "Really, we should be turning our ire on the Chinese, who accidently released the virus in the first place."

Fauci is the rightful 'target' for your ire. He clandestinly funded this 'research', despite the sainted Obama prohibiting it.

He was also implicated in the misdiagnosis and mistreatment of AIDS patients thirty years ago. Pushing that useles, but then brand new drug AZT, which as today with Remdisivir, which attacks the kidneys and liver will give you renal failure.

Word to the wise, if you find yourself in a NHS hospital diagnosed with COVID, just before they ram the tube down your throat, if it' the last thing you do, refuse to be treated with Remdisivir.

DJK said...

I realise that Fauci deserves a share of the blame. Presumably, he's the reason why the US has soft-pedalled blaming China.

Fauci is even older than Joe Biden. I'd like to know what hold he has on the rest of the US govt to stay in charge into his 80s.

E-K said...

DJK - It's an important distinction.

The double-jabbed is not 'unvaxxed' (a pejorative term) - they are just someone who's got a bit twitchy (as they should) about being jabbed every four months - soon to be every three by the looks of it... especially seeing as:

A) We get lockdown whatever we do

B) We now know it is not about protecting others

So what are we to do ? Just keep on getting jabbed whenever they tell us ??? At what rate ?

Few of us expected this.