Implications of a triple dip recession
Mar 13th 2013, 7:06 am
#31
Lost in BE Cyberspace
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Location: Disneyland, Dubai
Posts: 15,887
Re: Implications of a triple dip recession
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.
Mar 13th 2013, 7:18 am
#32
Account Closed
Joined: Feb 2011
Posts: 0
Re: Implications of a triple dip recession
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.
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?
Mar 13th 2013, 7:30 am
#33
Lost in BE Cyberspace
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 15,887
Re: Implications of a triple dip recession
Inflation also has the effect of 'paying off' the debt for you but making it less valuable.
Mar 13th 2013, 7:54 am
#34
Account Closed
Joined: Feb 2011
Posts: 0
Re: Implications of a triple dip recession
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.
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.
Mar 13th 2013, 7:57 am
#35
Lost in BE Cyberspace
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Mar 14th 2013, 2:47 pm
#37
Not an evil hypnotist
Joined: May 2007
Posts: 1,975
Re: Implications of a triple dip recession
From my current favourite economist:
http://www.guardian.co.uk/commentisf...-long-term-fix
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.
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.
Mar 14th 2013, 2:55 pm
#38
BE Forum Addict
Joined: Sep 2009
Location: Kuala Lumpur
Posts: 1,160
Re: Implications of a triple dip recession
Anyone got any thoughts on the dreaded "stagflation"?
Mar 14th 2013, 8:47 pm
#39
Lost in BE Cyberspace
Joined: Nov 2012
Location: bute
Posts: 9,740
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.
How will this one end ? Maybe the survivalists and loonies have a point.
Mar 15th 2013, 7:28 am
#40
BE Enthusiast
Joined: Jun 2012
Location: Magic Kingdom
Posts: 947
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)
