Thursday 5 February 2009

Interest rates...

...are now at minus 15.45%.

Granny mugging bastards.

1 comment:

David Farrer said...

Comments made on previous template:

David Farrer
John B 
Yes, what's already happened but also what's anticipated.

8 February 2009, 20:11:47 GMT
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john b
"Prices of imported goods are already rising in anticipation of a devalued pound." 
Eh? A more conventional way of looking at that would be 'prices of imported goods are rising because the fall in the pound that's already happened, and hence the rise in the cost of newly imported goods, is starting to feed through to distributors and retailers'... 

8 February 2009, 14:42:46 GMT
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David Farrer
The MV=PQ Chicago School formula has been roundly criticised by the Austrians. Correctly in my view. See Rothbard, especially Chapter 11 Money and Its Purchasing Power. 
As Rothbard explains, the whole concept of monetary velocity is arguably flawed. At any given moment of time all money is owned by someone. If £100 in my balance sheet, it can't be in someone else's at the same time. (I'm not entirely sure that certain banks understood that though...) The idea that money "flows" through the system is misleading, as is the whole methodology of viewing the economy as a system instead of a series of individual transactions. 
Prices of imported goods are already rising in anticipation of a devalued pound. I'll stick with gold - see the above comment.

8 February 2009, 12:45:52 GMT
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vavatch: "and raving gold standardists don't." 
1oZ Au Feb 1, 2007 £332.00 
1oZ Au Feb 1, 2008 £468.75 
1oZ Au Feb 2 2009 £642.58 
Assuming gold isn't worth any more today than it was in 2007 ...

6 February 2009, 20:49:48 GMT
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Seems pretty sensationalist to me - a large icnrease in M4 alone doesn't mean that inflation is about to get out of control and the pound in your pocket is going to be worth less. 
In fact, a year on year increase in M4 is pretty historically normal - even a large one. And if you look at some other countries (australia, india) you can see their rates of increase historically have been far higher! 
Anyway, it takes more than M4 to massively increase inflation. There's also the "velocity" of money to consider - and in these credit crunchy times, that is way way way down, and hence causing many ills. So it makes perfect sense to increase M4 to compensate. Remember: MV = PQ. 
I get the distinct impression that the Bank of England know what they're doing, and raving gold standardists don't.

6 February 2009, 11:30:00 GMT