Drago
Legendary Member
- Location
- Suburban Poshshire
Seems a fair swap. Some people pay tens if thousands for a baby.
OMG they cut my interest rate!
- Thread starter swee'pea99
- Start date
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keithmac
Guru
Quite an interesting outlook on it!.
mustang1
Legendary Member
- Location
- London, UK
Does that cover the cost of the letter that was sent out to you?
The past decade the governments ("central planning") suggested alot money creation > inflation.
Actually, that was false. They did so to suggest prices would increase alot. They didn't. And why: because their central banks paid (along an interest rate on deposits banks held at central bank facility) their bank system members to NOT lend it out.
But some people believed the suggested inflation, and swapped their savings towards whatever (stocks, materials, ..., everything that is storable for some time). Only that those markets were frontrunned and they paid higher prices for it.
So that "alot money creation" created only money in the inflation-sterile environment of central bank deposit facilities.
And why: to control the total amount money, and with it, general price trend (inflation).
There are 2 ways to do that, excluding eachother:
- control interest rates and accept the consequences for the money supply
- control the money supply and accept the consequences for the interest rates
The first is used outside crises. During the booms.
The latter is used in crises. During the busts.
Why: to allow selectivity when handing over new money.
Imagine a central bank wants to give one of its member banks 1 million dollars.
2 ways to do that (the interest % are relative to market interest not to zero so negative has not any meaning)
1) a loan of 100 million dollars, at an interest of -1%
2) a loan of 10 million dollars, at an interest of -10%
Case 1) is inside crises, and blows up the money supply but not inflationary - it's a sterilized balance.
Case 2) is outside crises, and blows up the money supply, and is coupled to wages, index adjustments, ...
Inside crises, post booms, they don't want people to spend more, as to stabilize price inflation due to the boom. So they don't want those annoyant index adjustments / wage increases etc. That's the selectivity.
And that's why Quantitative Easing was/is a scam. If they say Federal Reserve created 2 trillion dollars, it's not 2 trillion inflation to come, it's only that very low interest rate on it, that the Fed pays to its member banks, that is inflationary.
Actually, that was false. They did so to suggest prices would increase alot. They didn't. And why: because their central banks paid (along an interest rate on deposits banks held at central bank facility) their bank system members to NOT lend it out.
But some people believed the suggested inflation, and swapped their savings towards whatever (stocks, materials, ..., everything that is storable for some time). Only that those markets were frontrunned and they paid higher prices for it.
So that "alot money creation" created only money in the inflation-sterile environment of central bank deposit facilities.
And why: to control the total amount money, and with it, general price trend (inflation).
There are 2 ways to do that, excluding eachother:
- control interest rates and accept the consequences for the money supply
- control the money supply and accept the consequences for the interest rates
The first is used outside crises. During the booms.
The latter is used in crises. During the busts.
Why: to allow selectivity when handing over new money.
Imagine a central bank wants to give one of its member banks 1 million dollars.
2 ways to do that (the interest % are relative to market interest not to zero so negative has not any meaning)
1) a loan of 100 million dollars, at an interest of -1%
2) a loan of 10 million dollars, at an interest of -10%
Case 1) is inside crises, and blows up the money supply but not inflationary - it's a sterilized balance.
Case 2) is outside crises, and blows up the money supply, and is coupled to wages, index adjustments, ...
Inside crises, post booms, they don't want people to spend more, as to stabilize price inflation due to the boom. So they don't want those annoyant index adjustments / wage increases etc. That's the selectivity.
And that's why Quantitative Easing was/is a scam. If they say Federal Reserve created 2 trillion dollars, it's not 2 trillion inflation to come, it's only that very low interest rate on it, that the Fed pays to its member banks, that is inflationary.
potsy
Rambler
- Location
- My Armchair
I've been really lazy with my savings the last couple of years, but am now starting to look at things again.
So along with my first dabble in premium bonds I'll be moving my modest sum from their current 0.2% account to a huge 1% with NS&I.
I know there are probably slightly higher rates out there but I like to use those I have heard of
So along with my first dabble in premium bonds I'll be moving my modest sum from their current 0.2% account to a huge 1% with NS&I.
I know there are probably slightly higher rates out there but I like to use those I have heard of
bonds stocks and property are immediate spending - that's the goal of a loan: spend now, earn later.
Qe wasn't "allocated" at all, the created money just sits there, as reserves on top of required reserves ("excess"), awaiting a destruction as simple as it was created. In meantime, making savers>speculators falsely thinking prices would rise, and willing to pay prices driven higher by frontrunning of entities / agencies that cooperate with the central banks / governments.
The opposite is fact: money that isn't spent has no influence on general prices.
A false thought (that it would be spent), does have an influence on <certain> prices, namely in temporarly driven up prices (due to speculation-stockpiling), followed by a destockpiling upon discovery of the thought having been false, with prices driven back down.
And that was/is the goal: getting rid of a desired amount existing money, that was wasted on temporarly driven up prices.
- Location
- Somewhere wet & hilly in NW England.
I've been really lazy with my savings the last couple of years, but am now starting to look at things again.
So along with my first dabble in premium bonds I'll be moving my modest sum from their current 0.2% account to a huge 1% with NS&I.
I know there are probably slightly higher rates out there but I like to use those I have heard of
I hear this comment now and again from savers/investors but really, if the bank or whatever is fscs protected then the safety of your money is underwritten by the Gov'.
So why no destockpilling yet?
And why pump more in recent months?
Temporarly means 11 years and counting?
Or 20 in case of Japan?
Which would mean we have been for some time already in the negative real intrest rates
For the obvious: because they want to see speculators lose so much of their savings that their new money replaces existing at their targeted rate.
What is your evidence for "pump more in recent months"?
I've seen claims like this enough times in the past, and everytime a closer look showed that "pump" as a scam.
For ex, one of the last times I did, was after news and other media claimed that the european central bank popped up its big cannon (if I can translate that literal), and what happened really: their new LTRO (longtermrefinancingoperation)'s appeared the very day that previous LTRO's ended (read: paid back) so in effect there was no more money created, it just replaced.
And that seems to be a common practice in misleading.
Remember the story of years ago, that the Federal Reserve would have created NOT 1200 billion in 2008 (QE1) but 16.000 , so called reveilled after an investigation of the Fed (GAO audit)?
It was touted all over the place, especially by the stores whose profit origins from speculators making bad decisions.
Reality: that 16000 was just the non term adjusted total of the loans of QE1.
The adjustment calculated to precisely 1200 billion.
See: they just ignored ALL loan paybacks.
Like that one can claim amounts as big as desired, by just increasing the measurement period.
And yes, temporarly is easily a decade and more.
Look at your own UK government 20 years ago, it sold alot of its gold reserve at cheapskate recordlow prices to its bullion banks. https://www.bbc.co.uk/news/business-48177767 It wasn't the only government doing it then.
And 10 years ago, governments started buying it back from their bullion bank buddies, at recordhigh prices... Go figure.
Look at the so called Central Bank Gold Agreements. A kinda market "promise" to limit gold sales.
But the limit was 600 tonnes per year. High enough to not really count as a limit... Seen afterwards: look at now, they buy that amount annually. Only that they don't put in the media as a limit, haha.
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Ming the Merciless
There is no mercy
- Location
- Inside my skull
Omg you had a non zero interest rate...
Yeeeees, but now I am at loss
It would mean anyone putting money in sp500 or nasdaq companies in the past decade is speculator
One more question, how different end result would cb buying bonds from companies have on the financial markets, compared to qe?
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