yesterdays express

Nobody can say. Who knows when inflation will become a problem and force their hand. Looking at the state of the currency though I would think that it might be sooner rather than later especially if there is a recovery elsewhere. Already Australia has raised rates and several others arent far away.

http://www.thisismoney.co.uk/news/article.html?in_article_id=491839&in_page_id=2&ct=5

Have a look at this. Whether it is to be believed 100% I am not sure myself.

Personally I don't see rates moving upwards anytime soon, however.

I am in agreement. Rates are going nowhere whilst unemployment is rising!

Is that the big factor when setting rates then chisel?

chisel
Several months ago I stated on here that there was a lot of trouble ahead with self-cert mortgages, and you replied saying "'there was a very small % of these loans and that is why we would not get into much trouble as in the US". Today the leader of the FSA said "45% of all mortgages made in 2007 were self-cert" and many of these were now in trouble. Who do I believe him or you? I await your words of wisdom on this subject.

Chisel will tell you that 45% is good !

Rates will be low for at least a year. In that time, there will be lots and lots more QE.

Then when it bites, in maybe 3 years, the sh1t will really hit the fan.

My advice - use the low rates to pay off as much of your mortgage as you can. And don't, under any circumstances, invest in property, unless you need it to live in long term.

So what cunning plan does Merv King have for controlling inflation when it starts to take off......which I suspect is about to hit us.

Will he be seen burning piles of money on Finsbury Circus by way of a reversal of QE?

Inflation has been low for almost a generation now, but the goods we buy from abroad and the raw materials we use in our factories are becoming more expensive.....these costs have yet to be passed on to the British consumer.

Merv's recent statements that he's not too worried about a drop in the value of Sterling may come back to haunt him.

I've mentioned before price disparities between the UK and abroad, and this can currently be seen to quite an effect in the price of cars.

Buying a car in Ireland at the moment is likely to cost you 30 to 50% more than the cost of the same car in the UK. Prices have probably been held on the basis that surely Sterling will recover back to its more historical level with the Euro....Merv's comments may now force a bit of action from those who price up the goods on sale in this country.

The interest rate tool may be a blunt instrument when that starts to happen

"Shab 14 Oct 02:33

Rates will be low for at least a year. In that time, there will be lots and lots more QE. "

Not so sure about this. The BoE have pretty much exhausted their initial target pool of GILT's, and the value of this process is looking somewhat tainted at the moment.

still rates will be low for a year

ALL OF YOU ARE WRONG HERE,

DEFLATION is the biggy here, when banks get kicked in the nuts they don't get better for years and years, which measn less credit sloshing around, now while QE and zero interest rates can flood the market with money for a while, it just ends up in financial paper assets, none of this money is getting through to businesses who actually create and make things and hire people. All this QE and zero interest rate policy is give bankers huge bigger than ever bonuses while the REAL economy goes down the pan-these pinstripes don't have a scooby doo what the real business owners are going through.

Sooner or later the markets will realise that the consumer is competely had it in the US and UK and that will bring the CRASH II which imo will be more violent and dramatic than October 2008. Invest in Bonds -German Bunds are a good play and maybe a few defensive stocks.

To compare it to a nighout, were at the 5am stage where really we should get a drink of water and go to bed, but no instead we want more stimulus and we take the ket/coke/pills combo which will supercharge us for another few hours. It only means the fall will be much harder later down the line. If you've made a good profit buying stocks in march, take your *****off the table, in terms of property, property will get cheaper definitely in the next 2 years and this may take 5 years plus to stabilise. Unemployment may be slowing but its only becasue wages have been keep under control and people are know working more part time hours. Don't believe the hype, do you honestly think anything other than QE and zero interests are driving these markets? Its a complete mirage and the first stiff of the rug being pulled things will collapse like a deck of cards.

XX

wow

"Buying a car in Ireland at the moment is likely to cost you 30 to 50% more than the cost of the same car in the UK."
Probably not the best country for a comparison LUFC.

property get cheaper in next 2 years....nother dreamer...goodnight..xx