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UK interest rates to be 8 percent within 2 years


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#1 The Undertaker

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Posted 22 August 2010 - 09:16 AM

http://www.telegraph...-two-years.html

QUOTE
To control inflation, "interest rates will rise rapidly as well", Mr Lilico says. "To keep [RPI] inflation down to only 10pc for one year, the economy will have to be able to tolerate interest rates of perhaps 8pc."

QUOTE
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.

Keynes

#2 DrBubb

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Posted 22 August 2010 - 09:47 AM

He estimates that the Retail Prices Index (RPI), the inflation measure favoured in wage settlements and against which annual rises in train fares are priced, would rise "above 10pc".
The Consumer Prices Index (CPI), the inflation measure that the Bank is responsible for keeping at around 2pc, will top 6pc, Mr Lilico reckons.

== ==

I wonder how many home buyers have factored those sorts of rates into their calculations
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#3 The Undertaker

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Posted 22 August 2010 - 10:27 AM

QUOTE (DrBubb @ Aug 22 2010, 10:47 AM) <{POST_SNAPBACK}>
He estimates that the Retail Prices Index (RPI), the inflation measure favoured in wage settlements and against which annual rises in train fares are priced, would rise "above 10pc".
The Consumer Prices Index (CPI), the inflation measure that the Bank is responsible for keeping at around 2pc, will top 6pc, Mr Lilico reckons.

== ==

I wonder how many home buyers have factored those sorts of rates into their calculations


I imagine very few have. The number of people I hear saying "the government will never let house prices fall" amuses me.
QUOTE
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.

Keynes

#4 Ziknik

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Posted 22 August 2010 - 10:41 AM

Anyone got a link to the full publication?

#5 Ziknik

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Posted 22 August 2010 - 10:48 AM

QUOTE (The Undertaker @ Aug 22 2010, 11:27 AM) <{POST_SNAPBACK}>
I imagine very few have. The number of people I hear saying "the government will never let house prices fall" amuses me.

Those people are essentially stating their hopes rather than their reasoned arguments.

The linked linked article is similar. The guy says "interest rates to 8%" but doesn't provide any information bar "inflation".

The article is pretty meaningless without more information.

EDIT: Maybe interest rates wouldn't need to be as high if he stopped cheer-leading more QE

http://link.brightco...id=524216093001

#6 ares

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Posted 22 August 2010 - 11:41 AM

I just saw one of the authors talking News 24 and basically his view was this:

- 2011 stronger growth year than thought, results in high inflation (higher velocity/expansion of all the printed money).
- Situation like 1970's not Japan 1990's or America 1930's.
- Very uncertain outlook, if double dip develops says there should be more QE and lower inflation.

He was a bit of CB fan boy if you ask me.

If we can have 3% CPI and 0.5% interest rates now why does he think when we have 6% CPI the CB will have the balls to raise rates to 8% is a good question. Additionally this would utterly crush our mortgage market I would have thought.

#7 Plastic Elastic

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Posted 22 August 2010 - 05:13 PM

QUOTE (The Undertaker @ Aug 22 2010, 10:16 AM) <{POST_SNAPBACK}>


Does anybody have about the track record of these guys?

I have read countless statements of think tanks over the last few years. Some of them I liked because they fitted my way of thinking. Some of them I didn't like because they predicted things I could not see coming. Hardly ever do I check later whether they were right or not but my gut feeling is that plenty of these think tank studies turn out to be plain wrong!


Liberty means responsibility. That is why most men dread it.
George Bernard Shaw
(1856 - 1950)

#8 DrBubb

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Posted 22 August 2010 - 11:48 PM

QUOTE (The Undertaker @ Aug 22 2010, 06:27 PM) <{POST_SNAPBACK}>
I imagine very few have. The number of people I hear saying "the government will never let house prices fall" amuses me.

Haha.
"They won't" until they do. Then, the big shock hits
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#9 DrBubb

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Posted 22 August 2010 - 11:54 PM

QUOTE (Plastic Elastic @ Aug 23 2010, 01:13 AM) <{POST_SNAPBACK}>
Does anybody have about the track record of these guys?

I have read countless statements of think tanks over the last few years. Some of them I liked because they fitted my way of thinking. Some of them I didn't like because they predicted things I could not see coming. Hardly ever do I check later whether they were right or not but my gut feeling is that plenty of these think tank studies turn out to be plain wrong!

If they forecast, they tend to forecast often enough that their "misses" will be soon forgotten.
It is not like a chat board, where the history is there for all to see - warts and all

I think the track record of the three calls on GE Radio is pretty remarkable:

+ Called the exact low in stocks in early March 2009
+ Called the property low and a 9-12 months bounce in UK property - April 2009
+ Called the day before the top in stocks in early August 2010 (but the jury is still out)

I suppose if I can keep doing it, eventually people may take some notice of it.
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#10 THEBIGMAN

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Posted 25 August 2010 - 08:40 AM

Whether bullish or bearish, I say treat all opinion as the guff it is. Who's to say this guy isn't another Mishkin? (see http://www.wcvarones...ic-mishkin.html - you couldn't make this up...)

We can not sit back and allow communist infiltration, communist indoctrination, communist subversion and the international communist conspiracy to sap and impurify all of our precious bodily fluids.





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