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Re: Implications of a triple dip recession
Originally Posted by Scamp
(Post 10600492)
OK. What about the national debt, this have an effect on not just the credit rating but the value of the nuggets?
As the rating goes down, interest rates for government bonds (should) rise. This puts further pressure on finances and the value of the nugget. One way to reduce the interest rates is to print the money and buy your own debt (also known as QE) - that pushes the value down further. |
Re: Implications of a triple dip recession
Originally Posted by Millhouse
(Post 10600570)
both.
As the rating goes down, interest rates for government bonds (should) rise. This puts further pressure on finances and the value of the nugget. One way to reduce the interest rates is to print the money and buy your own debt (also known as QE) - that pushes the value down further. Is that what you see as a main cause for nuggets being worth less today than a year ago? |
Re: Implications of a triple dip recession
Originally Posted by Scamp
(Post 10600591)
Printing money to pay debt is obviously quite a simple solution, yet is the QE going on now actually going towards paying debt or is it just trying to create some inflation?
Inflation also has the effect of 'paying off' the debt for you but making it less valuable. |
Re: Implications of a triple dip recession
Originally Posted by Millhouse
(Post 10600613)
The results are one and the same. Government issues debt, the bank buys the debt. Government funds things-- this causes inflation and weakens the currency that also causes inflation.
Inflation also has the effect of 'paying off' the debt for you but making it less valuable. The A-level just doesn't cut the mustard and I've clearly forgotten most of it. |
Re: Implications of a triple dip recession
Originally Posted by Scamp
(Post 10600654)
I wish I'd done an economics degree.
The A-level just doesn't cut the mustard and I've clearly forgotten most of it. |
Re: Implications of a triple dip recession
Originally Posted by Millhouse
(Post 10600656)
I have neither. I'm an engineer.
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Re: Implications of a triple dip recession
From my current favourite economist:
Despite the devaluation, Britain's service exports have fallen – average annual service exports for 2008-11 were 8% lower than for 2005-07. This may be understandable, given the poor state of its financial sector – rocked by one scandal after another and hemmed in by a slow tightening of global financial regulation. However, manufacturing exports, which were supposed to make up the shortfall created by the services sector, also fell by 8% after the devaluation. This is highly unusual.[...] The only reason the British balance of payments situation has not been worse is the large increase in primary commodity exports – oil, minerals and food. These were on average 22% higher in 2008-11 than in 2005-07. In other words, since the crisis the British economy has been moving backwards in terms of its sophistication as a producer. All of this means that, without addressing the underlying decay in productive capabilities, Britain cannot fix its ailing economy. |
Re: Implications of a triple dip recession
Anyone got any thoughts on the dreaded "stagflation"?
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Re: Implications of a triple dip recession
This recession is worse than the one that started in 1931. How did that one end ? With the enormous deficit spending in WW2.
How will this one end ? Maybe the survivalists and loonies have a point. |
Re: Implications of a triple dip recession
At least we could stock up on Pot Noodles to survive the end of days. I see manufacture of them is coming to Leeds (Yorkshire) since it will now cost the same as getting them made in China. Hooray for Pot Noodles, they will save our economy! (or not)
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