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Recession


onlyme
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swiss_democracy_for_all

There has to be one, and a big one. Question, is, will they manage it correctly and do what is necessary? Many of the things that need to be done will involve making a recession a lot deeper......

My guess is no, they won't, especially now the government is going to be weak, whoever it is.

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swiss_democracy_for_all
1 hour ago, onlyme said:

Inflation 2.9%.

They might react and raise rates if it goes over 5-6%, but more likely will just say it's temporary and currency related.

If you're a multi-millionaire, getting returns of 5-10% is pretty easy, so the elite don't care about inflation which mainly robs the poor.

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  • 2 weeks later...

Ambrose in full doom mode:

http://www.telegraph.co.uk/business/2017/06/25/next-global-financial-crisis-hit-vengeance-warns-bis/

 

Interesting excerpt from the paywall side (just sign up with a free email address, no validation further required):

 

"Ultimately you have to take the bitter medicine rather than storing up ever more trouble for later. Critics say this is a recipe for revolution in the current febrile mood. "

 

Usually, admissions like this are kept behind closed doors.

One flaw in his argument is this inevitability about rate rises. Could someone explain that?

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  • 2 weeks later...
A tremendous # on the lung

If there is a recession soon (and I think there will be one, particularly as Brexit supposedly looms closer), how will the government / BOE react?

I suspect there will be an outcry for more government "investment", i.e. more borrowing? Which would mean more QE? However, if rates in the US are slowly moving up, will this be possible? What would happen if the BOE just mopped up gilts that were no longer desirable to foreign holders? I assume the currency would get trashed? But would the BOE care about this? They don't seem to have given much indication of being worried about it recently, in fact they seem to have actively encouraged it.

I see a situation where (imported) inflation rises; unemployment rises; UK assets drop; savings rates remain negative in real terms. In short, is it time to get out of £ and into $ (or other)? And if so, what is the best choice?

Apologies if the above is incoherent, I'm not sure I really know what I'm talking about! I just have a hunch that being largely in sterling could be a bad choice fairly soon. 

Politically I suspect it will all continue to be manipulated in order to cancel Brexit; and we will ultimately end up with egg on our faces and far less influence in the EU going forwards. 

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One percent

I thought that the recession (depression) started around 2007.  What has happened since then is that tptb have managed to mask it and keep the plates spinning through various interventions. The main one has been public borrowing, despite the rhetoric of austerity, this has continued to climb unabated.  Then we have had a massive growth in private debt, encouraged through historically low interest rates.

There has been wholesale selling off of all our assets to overseas buyers, from government buildings such as Whitehall, through to swathes of new build flats and many of our industries (what we have left). 

We have seen the school leaving age rise to 18 and a massive increase in university study by the young to hid the massive youth unemployment figures. 

To cap it all off, we have seen a mass influx of gimmigrants so as to mask the appalling GDP figures.  

What is happening now is that they are running out of ideas to keep the idiocy going.  It is going to go like a corked volcano and I can see a crash reminiscent of the 30s coming.  What will compound this is the 'just in time' approach to food supply which in any kind of reset will see food shortages.  It isn't going to end well.  

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A tremendous # on the lung

Yes, I tend to agree with all of that.

Sterling has obviously tanked against most currencies recently, and is still near long term lows against the $. I've seen some suggestions that it may strengthen soon, but I just don't see it. My investment strategy at the moment feels akin to being a rabbit in the headlights. 

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