Think house prices will rise now.. read this...

[Technically Fundamental]

I thought that the main reason that they said Q.E. was feasible was because they used digitised money and not printed money.

Wont the US interest exp be offset against the interest on the tarp when the rates rise?

 

[N Rothschild]

It is not mate! Look how big is the USD debt! Look how much money is on the system and is not everything for the banks..

The FED has printed to much money out of nothing, is printing money to fix a problem and if it dont get fixed it`ll printe some more because the lenders are not lending money as they use to.

If the rates goes up do you know how much money USD will pay on interest of its debt? and what they going to do to pay they bills?

What happens if a person or a company spends more money than it gets?

not all debt held by the treasury is printed money...

and america's debt as a % of gdp is less than most other countrts in this crsis. people seem to be forgeting that!

 

[N Rothschild]

I thought that the main reason that they said Q.E. was feasible was because they used digitised money and not printed money.

Wont the US interest exp be offset against the interest on the tarp when the rates rise?

*snigger*

actual printed notes make up a very small part of the money supply.

 

[zambuck]

there is a decrease in the money supply and credit.

easy credit is gone. and people are currently paying down there huge debts thus decreasing the money supply.

all this money from the fed etc isnt actually reaching the consumer..its going into re capitalizing the banks. And as the for the treasury, there is no way to really know how much of this debt is being montatized by the fed.

Things are SO much more complicated than the theory of "omg printing money = hyperinflation" people just cant seem to see past this basic argument.

right now the world is in a deflationary cycle, END OF. whether this will continue remains to be seen but the only way out is to start lending again like a drunken sailor to service the current debt levels of the consumer. All this debt just results in one thing, transfer of wealth from the poor to the rich. There is only so much cash out there (alot less than there is debt) how do you think people are going tp pay the INTEREST on all this debt? well they dont, you just create yet more credit to keep the ponzie going..and that ponzie has now failed IMO.

so yeh tell me again there isnt a contraction in credit and the money supply?

last month was the biggest contraction of consumer credit in history

...You have posted very nice three charts.....can you please explain each in detail as to what you are trying to say about each.....This is not a trick question by the way....I presume that these are US related and not UK....I stand corrected....Are there any charts for UK data if the ones above are for US..?

after all we all want to learn more....

regards

 

[zambuck]

Deflation;
The term deflation was used with an alternative meaning by the classical economists, to refer to a decrease in the money supply and credit;

Is not what is happening in the market right now is it?

....it is not a blip in fall in prices...but it is sometimes described as a sustained fall in prices along with when inflation is also below zero....

 

[N Rothschild]

prolly best reading the article i took the charts from for a better understanding zambuck

The Government's Effort Has Failed - The Market Ticker

 

[zambuck]

He was right......the one below....

BBC NEWS | Business | Former rate-setter turns on Bank

And he the one below was sleeping....and is not too right now.......

BBC NEWS | Business | Market crisis 'will happen again'

 

[zambuck]

prolly best reading the article i took the charts from for a better understanding zambuck

The Government's Effort Has Failed - The Market Ticker

...Thanks...OK it confirms what I thought....these are for US and not for UK.....Issues are very different in both US and UK at this stage.....

I would like to see UK charts for the same subjects if available....Let me see if I could find them....

 

[poborsky]

so yeh tell me again there isnt a contraction in credit and the money supply?

last month was the biggest contraction of consumer credit in history

So as consumer credit contracts is it because banks will not or cannot lend or is it that consumers will not or cannot borrow? Maybe a bit of both, but its not good news. Talk is of a jobless recovery, now we have the consumer-less recovery. So we have no consumers, no jobs, only speculators left with cash that can purchase properties, so the banks cant make money and will need another few trillion printing to keep them on life support. And of course this will NOT lead to inflation.

 

[Technically Fundamental]

We'll see after christmas spending.

 

[Atilla]

We'll see after christmas spending.

Sorry just for clarification - What is it that we'll see after Christmas?

 

[zambuck]

....Yes same here....I am also trying to understand what TechnicallyFundamental is trying to say....

 

[Technically Fundamental]

Consumer spending, effects of unemployment, credit, retail etc

when q4 figs come out (if they aren't too doctored) we'll have a better view of whats what on the ground IMO

 

[Atilla]

Consumer spending, effects of unemployment, credit, retail etc

when q4 figs come out (if they aren't too doctored you hedging your bets here ) we'll have a better view of whats what on the ground IMO

Personaly I reckon we are going to have the best Christmas ever. People don't have much money so there will be more heart and soul. I'm really looking forward to it.

On the Faces night club at Gants Hill they have already put up their banner saying book your Christmas Party Now! - already... :-0

 

[Technically Fundamental]

Wouldn't be having too good a christmas if you got laid off

 

[gfrost]

Well looks like Atilla and Zambuck are right :smart:
I must say I am astounted that all the negative factors haven't led to a 2nd dip

Oh well, got to be wrong some of the time

Cheers

Graham

 

[N Rothschild]

lol getting a bit ahead of yourself i think...

 

[Atilla]

Wouldn't be having too good a christmas if you got laid off

I'll let you know after christmas if you promise to tell us what you expect to see after christmas.

 

[Technically Fundamental]

I'll tell you at 17:00 on thursday.

 

[SAINT]

No matter what happens at xmas, the problems run far deeper than a bit of xmas retail can fix. The cracks have been papered over in the hope of a miracle but the gloom is starting to appear. The spending of consumers is still lagging from the boom days because that is their reality but as Attila says, they may be in for a paradigm shift.

The stimulus money allowed bankrupt banks the ability to move their feet and also raise unimaginable sums in rights issues, such as the RBS 200p issue which investors are now trying to sue them for. The majority of investors still buy the short-term housing data that is spewed out by HBOS or RICS because they believe the stock bounce and the spin.

House prices fall 10%, then the obvious dead-cat bounce is labelled as the biggest rise in 5 years. It's just spinning numbers to drag in suckers. Asking HBOS and a team of surveyors to report housing numbers is a bit of a conflict of interest to say the least.

We were told there would be no bear market, no house price falls, no recession... I have zero trust in the leaders who helped to create this mess. The 'Jobless recovery' in economies which are 50-70% consumer almost makes me want to cry. From services to manufacturing to financial services the key components of GDP are losing jobs and contracts. Industries such as oil have been cutting jobs too and some firms are only clinging on due to oil prices.

To cut a long story short, I believe this mess has a lot more pain to dish out. The banks are using the borrowed time to weather future storms. We should too.