Can you explain to me why we lost the confidence of lender's in 2008 -10 because of something that occurred on the other side of the world?
Can you explain to me why we lost the confidence of lender's in 2008 -10 because of something that occurred on the other side of the world?Now now Fernando, that’s not quite true.
Deficit spending is fine (we don’t have a choice !) as long as it’s helping the economy grow sufficiently. It’s especially ok if interest rates are low and you can maintain confidence of buyers of government bonds….or if you have to print/QE as long as it doesn’t cause inflation or significantly debase the currency
What I’ve tried to explain (and obviously failed) is that if you don’t control the deficit spending you end up having to pay a lot more interest on borrowing as the market (the buyers of gov bonds) loses confidence over the ability to repay, so expects to receive a premium (see Liz Truss) and/or you end up printing huge amounts which debases the currency and can also cause inflation. This negatively impacts a lot of people but especially the poorest. The richest own assets which appreciate in a value due to QE/global liquidity (well, until breaking point)
I’m not bright enough or know enough about the detail to fully debate MMT theory, however, I can point out the flaws of some peoples interpretation of it. The main one being ignoring the requirement for price stability for theory to work and thereby the lack of acknowledgement that printing endless amounts of money debases a currency and can cause inflation. So basically the pound or dollar in your pocket can’t buy as much as it did. It’s the biggest secret/hidden taxation there is.
I’m genuinely concerned about the amount of government/national debt in the world but maybe I’m wrong to be. Only time will tell I guess
Can you explain to me why we lost the confidence of lender's in 2008 -10 because of something that occurred on the other side of the world?
Remember my arguing for the Gov't to use through people paying down their loan's at the time getting twice the bang for the buck.It’s a long time ago but googled the bond yields at the time of the financial crisis and they were low/normal so dont think we lost confidence of people buying government bonds. The government and BoE decided we needed QE/print to get liquidity into the banking system to stop it collapsing and encourage lending to continue to minimise impact on the wider economy. Basically various banks would’ve gone bust otherwise. other countries inc US did the same.
Unfortunately the world hasn’t really stopped QE/printing since.
It’s a long time ago but googled the bond yields at the time of the financial crisis and they were low/normal so dont think we lost confidence of people buying government bonds. The government and BoE decided we needed QE/print to get liquidity into the banking system to stop it collapsing and encourage lending to continue to minimise impact on the wider economy. Basically various banks would’ve gone bust otherwise. other countries inc US did the same.
Unfortunately the world hasn’t really stopped QE/printing since.
Printing money to save banks who got themselves into shit
Printing money to invest in infrastructure
That's fair enough.Two things SBD, I’ve said QE to help the economy grow and on infrastructure is fine as long as it’s controlled and doesn’t cause massive currency debasement (otherwise governments may as well be honest and just tax us all more cos that’s pretty much the end result - we have less purchasing power)
The saving the banks thing is complicated. Gordon Brown and others in the international community felt if they hadn’t propped up some of the major banks the whole banking system would’ve collapsed; there would’ve been runs on major banks, people not being able to get their money out, no lending for mortgages or company loans etc etc. All causing a massive depression, far worse than what we got. They saw it as the lesser or two evils. I don’t know whether this would’ve happened or not but they judged it would’ve and we’d already seen a run on northern rock and other smaller banks and lehmans had collapsed, HBOS was on the verge of collapse and had to be bought by Lloyds, so I’m guessing so
The major issue I had with the banking crisis is that nobody got prosecuted, bonuses earned under false pretences werent returned etc. basically pure, dangerous greed had no consequences. It was a disgrace
ps the big short is well worth a watch
Thoughts on the latest going on at Coventry City?I see Hunter Biden has been found guilty on all counts relating to his gun misdemeanours. WITCH HUNT!
Alternatively just like Trump he’s bang to rights and it’s caught up with him.
Two things SBD, I’ve said QE to help the economy grow and on infrastructure is fine as long as it’s controlled and doesn’t cause massive currency debasement (otherwise governments may as well be honest and just tax us all more cos that’s pretty much the end result - we have less purchasing power)
The saving the banks thing is complicated. Gordon Brown and others in the international community felt if they hadn’t propped up some of the major banks the whole banking system would’ve collapsed; there would’ve been runs on major banks, people not being able to get their money out, no lending for mortgages or company loans etc etc. All causing a massive depression, far worse than what we got. They saw it as the lesser or two evils. I don’t know whether this would’ve happened or not but they judged it would’ve and we’d already seen a run on northern rock and other smaller banks and lehmans had collapsed, HBOS was on the verge of collapse and had to be bought by Lloyds, so I’m guessing so
The major issue I had with the banking crisis is that nobody got prosecuted, bonuses earned under false pretences werent returned etc. basically pure, dangerous greed had no consequences. It was a disgrace
ps the big short is well worth a watch
I rater see 'QE' used to help pay for much needed infrastructure improvements than more austerity that just leads to a downward spiral. Especially considering we used QE to bail out a private sector that caused it's own problems.The Big Short is a great movie, great recommendation!
On QE, I do think it’s time we call an end to it, or at least start to ween the economy off it. Brought in to prevent the scenarios you outlined, correct but as a short term measure rather than a 10+ year policy.
My concern is that it’s raising asset prices to artificial levels, making it difficult for people to get on the property ladder. Keeping interest rates artificially low too isn’t a good thing either.
No, you're wrong.I see Hunter Biden has been found guilty on all counts relating to his gun misdemeanours. WITCH HUNT!
Alternatively just like Trump he’s bang to rights and it’s caught up with him.
Neither of them should be on the ballot paper.At least the gaslighting nonsense about Biden doing a great job running the country will stop now.
No one can pretend anymore that he's capable of running anything.
Already got an edge in the polls that will widen with the debates I think. Hard to believeAt this point it feels inevitable that Trump will win.
It’s a lesson that Labour would do well to learn from.No-one, I repeat, no-one, should be celebrating at the thought of a Trump victory.
It's absolute madness that the Democrats are putting Biden up again for re-election.
I don't know what the answer is in all this mess, but it certainly shouldn't be Trump.
Just watched the clips; this is very bad. It’s incredible to me that the democrats couldn’t have found a better candidate.No-one, I repeat, no-one, should be celebrating at the thought of a Trump victory.
It's absolute madness that the Democrats are putting Biden up again for re-election.
I don't know what the answer is in all this mess, but it certainly shouldn't be Trump.
The Democrats ignored better candidates in 2016 and 2020 so this is the consequence.Just watched the clips; this is very bad. It’s incredible to me that the democrats couldn’t have found a better candidate.
It appears that Trump was, probably deliberately, not going in too tough on him: treating him like an old man, which of course he is.
Trump was very gentle on him. Obliterated him with kindness.Just watched the clips; this is very bad. It’s incredible to me that the democrats couldn’t have found a better candidate.
It appears that Trump was, probably deliberately, not going in too tough on him: treating him like an old man, which of course he is.
You think?! Surely it’s too late now?Trump was very gentle on him. Obliterated him with kindness.
I said back on November that they'll find a way to replace Biden and I still believe that's likely.
Surely only possible if he died?You think?! Surely it’s too late now?
There's no established mechanism for it but I believe they'll find a way possibly on health grounds.You think?! Surely it’s too late now?
He’s have more chance of winning if he diedSurely only possible if he died?
This is what I’d have thought.Surely only possible if he died?
Insane isn't it.Not arsed about American politics, one things for certain that America does bad things whoever is in charge ..
What I will say is after watching some highlights this morning , are the Democrats really putting forward a man who is clearly on the verge of possibly dementia by the looks of him , is that the best the USA has to offer ?
Given their power and influence, I’d say we all are.Even CNN have come out with a list of false allegation or mistruths made by Biden during the debate , the yanks are in trouble
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