November 30th Strikes - UK

[The UK in Exile]

Because, of course, we're in exactly the same sitaution as Weimar.

Ow8... we aren't.

3/10 please try harder.

Never said we were, generally cos we aren't printing out couple of million quid every day. Which is what we would be doing, if we simply turned to printing more money to payoff debt.

nowadays we do 75 billion all at once.....

[Great Nepal]

Obviously, printing money has shown to work very well in the past: indeed, there is also a name for that theory - known as "Money Brick theory". A example of this great theory:-

You make out that I'm advocating printing money. I'm not. It's a simple fact that this is what the BofE is doing, and this helps contribute to the low interest rate you're so keen to point out.

Well, inflation seems to be decreasing as well, so obviously BoE hasn't been using its press much, has it?

[Olivaero]

Of course there are options other than cutting pensions, options that will hurt less in the long term, par example, cutting down on tax evasion? Are the conservatives looking at this? No. Of course not. They are hitting the poor hardest, which is why unions are necessary to represent the workers in situations where the ruling party does not represent the interests of the working class and does not need to because they only need to represent 51% of the country to get elected (not even that if you take into account turnout in elections).

[New Kilballyowen]

Regarding ambulance drivers, nurses and police officers striking, I'm with Calvin Coolidge. "There is no right to strike against the public safety by anybody, anywhere, at any time." If people's lives depend on someone, they shouldn't be striking. The other occupations, lunch ladies and such, I'm more ambivalent about. They aren't endangering lives by striking, so I see no real reason to oppose it.

[Keronians]

You do realise that inflation leads to creditors having to lose money, yes?

Locally, yes. Internationally, no, as the exchange rates offer a buffer and allow for another way to manipulate the markets to make money from differences in currency values.

No, they lose money internationally.

Person A is American. He invests $100 in British bonds. This would be 80 pounds (yes, I know it's not, but assume it is, for simplicity's sake). BofE prints money, causing inflation. Inflation leads to a weaker pound. $1 =/= 80 pence anymore. Now, $1 = 90 pence.

The time comes for the British government to pay back its debt. With an original yield of 10% (ludicrously high, I know, but stick with it), it must pay person A back 88 pounds. At a conversion rate of $1 = 90 pence, you obtain back $97.78 (88 x 10/9).

He has made a loss.

[Sovietiya]

And lets be honest, what do private sector business REALLY offer the people of Britain, other than services or products at extortionate prices that rise in line with this ridiculous government & its english banks' figures of inflation and interest rates.

Just about everything you use in your life, interestingly enough.

Actually...

China provides almost everything I use in my life, to be precise.

[Myrth]

You make out that I'm advocating printing money. I'm not. It's a simple fact that this is what the BofE is doing, and this helps contribute to the low interest rate you're so keen to point out.

Well, inflation seems to be decreasing as well, so obviously BoE hasn't been using its press much, has it?

Actually they printed £75 billion back in October.

[The UK in Exile]

Regarding ambulance drivers, nurses and police officers striking, I'm with Calvin Coolidge. "There is no right to strike against the public safety by anybody, anywhere, at any time." If people's lives depend on someone, they shouldn't be striking. The other occupations, lunch ladies and such, I'm more ambivalent about. They aren't endangering lives by striking, so I see no real reason to oppose it.

I believe abulance drivers and the like do, "emergency only" strikes. thus they still turn up for work and still answer calls but don't do non-essential work.

for example when the coastguard go on strike, they still man the radio and still rescue boats, but don't do radio check, weather reports, all non-essential calls.

[Great Nepal]

Well, inflation seems to be decreasing as well, so obviously BoE hasn't been using its press much, has it?

Actually they printed £75 billion back in October.

Which must be pretty reasonable if inflation actually decreased and is predicted to continue downhill.

[Keronians]

Actually they printed £75 billion back in October.

Which must be pretty reasonable if inflation actually decreased and is predicted to continue downhill.

Growth is expected to go downhill.

I wouldn't rule out another bank liquidation.

[Myrth]

No, they lose money internationally.

Person A is American. He invests $100 in British bonds. This would be 80 pounds (yes, I know it's not, but assume it is, for simplicity's sake). BofE prints money, causing inflation. Inflation leads to a weaker pound. $1 =/= 80 pence anymore. Now, $1 = 90 pence.

The time comes for the British government to pay back its debt. With an original yield of 10% (ludicrously high, I know, but stick with it), it must pay person A back 88 pounds. At a conversion rate of $1 = 90 pence, you obtain back $97.78 (88 x 10/9).

He has made a loss.

There are so many other factors affecting exchange rate that it doesn't make any difference. Inflation has been running high in the UK for a good year now, and in that time the exchange rate of the Pound to the Dollar has only fluctuated between about $1.5 and $1.6 to the £ sterling.

[Keronians]

Just about everything you use in your life, interestingly enough.

Actually...

China provides almost everything I use in my life, to be precise.

I assume you are joking, yes?

[Samozaryadnyastan]

I got yelled at for crossing a picket line at uni.
If they block off both entrances to the compound in which an entire department is situated, that's deliberately blocking it off to the point where I have to cross picket lines.

Not my fault Physics lecturers don't strike because they're all on multi-million pound research grants.

[Keronians]

No, they lose money internationally.

Person A is American. He invests $100 in British bonds. This would be 80 pounds (yes, I know it's not, but assume it is, for simplicity's sake). BofE prints money, causing inflation. Inflation leads to a weaker pound. $1 =/= 80 pence anymore. Now, $1 = 90 pence.

The time comes for the British government to pay back its debt. With an original yield of 10% (ludicrously high, I know, but stick with it), it must pay person A back 88 pounds. At a conversion rate of $1 = 90 pence, you obtain back $97.78 (88 x 10/9).

He has made a loss.

There are so many other factors affecting exchange rate that it doesn't make any difference. Inflation has been running high in the UK for a good year now, and in that time the exchange rate of the Pound to the Dollar has only fluctuated between about $1.5 and $1.6 to the £ sterling.

Yes, yes, that was an extremely simplified model. I even said so in the very post.

The main reason for the lack of fluctuation is the fact that the American exchange rate is not constant. The Federal Reserve in America also carried out its own QE.

[Angleter]

Market seems to disagree with IMF, then.
62.3% of GDP - UK - 2.52% Interest rate
63.4% of GDP - Spain - 5.26% Interest rate

Clearly, cuts are working and preventing UK going in general direction of PIGS. Oh, and lets not forget who brought about this mess in first place.

This is because the money markets know that if it comes to it, the UK can simply print more money to pay of its debts, as the Bank of England has been doing.
Spain doesn't have that luxury as it relies on the ECB.

Except there was no sustained drop in gilt yields in November 2009, when QE was increased for the last time until October 2011, and yields have in fact been falling at a steady rate since ~Feb 2011, which didn't see a whacking great devaluation. Indeed, when we did increase QE in October, the yields dropped and then rose, before we continued on the usual downward trend.

Graph

[Myrth]

Actually they printed £75 billion back in October.

Which must be pretty reasonable if inflation actually decreased and is predicted to continue downhill.

Inflation fell by about 0.2%, which seasonally is predictable. Food gets cheaper because of heavy discounting by supermarkets and good harvests from the autumn, and transport fares tend to drop because of reduced demand in the winter for flights etc.

[Keronians]

This is because the money markets know that if it comes to it, the UK can simply print more money to pay of its debts, as the Bank of England has been doing.
Spain doesn't have that luxury as it relies on the ECB.

Except there was no sustained drop in gilt yields in November 2009, when QE was increased for the last time until October 2011, and yields have in fact been falling at a steady rate since ~Feb 2011, which didn't see a whacking great devaluation. Indeed, when we did increase QE in October, the yields dropped and then rose, before we continued on the usual downward trend.

Graph

Yeah, that's what he's saying. That there is confidence in the UK because it has a central bank which:

a) Can act as a lender of last resort

b) Is designed so as to suit the specific needs of the UK

Which is not the case for Spain (unfortunately).

[Sovietiya]

Actually...

China provides almost everything I use in my life, to be precise.

I assume you are joking, yes?

No lol.

The only thing I ever use that does not have MADE IN CHINA printed on it are services.

[Great Nepal]

Which must be pretty reasonable if inflation actually decreased and is predicted to continue downhill.

Growth is expected to go downhill.

I wouldn't rule out another bank liquidation.

Growth has risen from 0.1% to 0.5%.

[Angleter]

Except there was no sustained drop in gilt yields in November 2009, when QE was increased for the last time until October 2011, and yields have in fact been falling at a steady rate since ~Feb 2011, which didn't see a whacking great devaluation. Indeed, when we did increase QE in October, the yields dropped and then rose, before we continued on the usual downward trend.

Graph

Yeah, that's what he's saying. That there is confidence in the UK because it has a central bank which:

a) Can act as a lender of last resort

b) Is designed so as to suit the specific needs of the UK

Which is not the case for Spain (unfortunately).

Except if QE, and not fiscal policy, was the main force behind our gilt yields decreasing, one would expect the yields to decrease in line with QE being wheeled out. But it isn't. The Bank of England's presence, also, isn't a new phenomenon that has only come to the markets' attention in early 2011.

[Keronians]

I assume you are joking, yes?

No lol.

The only thing I ever use that does not have MADE IN CHINA printed on it are services.

China doesn't provide it.

The firm paying for its production, gathering the raw materials and building the assets necessary for it, gathering suitable labour, and having the actual product idea is providing the product.

And, anyway, without capital goods (produced in developed countries, i.e. Japan, Germany, etc.), Chinese labourers wouldn't be able to produce this.

[Keronians]

Growth is expected to go downhill.

I wouldn't rule out another bank liquidation.

Growth has risen from 0.1% to 0.5%.

http://www.independent.ie/business/euro ... 36741.html

[Myrth]

Except if QE, and not fiscal policy, was the main force behind our gilt yields decreasing, one would expect the yields to decrease in line with QE being wheeled out. But it isn't. The Bank of England's presence, also, isn't a new phenomenon that has only come to the markets' attention in early 2011.

The inherent weakness of the Euro is, however.

[Keronians]

Yeah, that's what he's saying. That there is confidence in the UK because it has a central bank which:

a) Can act as a lender of last resort

b) Is designed so as to suit the specific needs of the UK

Which is not the case for Spain (unfortunately).

Except if QE, and not fiscal policy, was the main force behind our gilt yields decreasing, one would expect the yields to decrease in line with QE being wheeled out. But it isn't. The Bank of England's presence, also, isn't a new phenomenon that has only come to the markets' attention in early 2011.

No, but the lack of that ability for Spanish central banks, Italian central banks, etc. has come to their attention in the late 2000s.

[Great Nepal]

(Image)
Growth has risen from 0.1% to 0.5%.

http://www.independent.ie/business/euro ... 36741.html

Growth has been downgraded, but growth is still expected. Ie. GDP is still growing, just at slower rate.