Looming Financial Collapse

C_J

hey, at least we’re not Turkey … yet.

“The inflation there is at 40 per cent and the main interest rate has just gone from 8.5 per cent to 15 — with the promise of more increases to come, maybe to as much as 40 per cent.”
– The Times

alistair

C_J There is no doubt that our stubbornly high inflation rate is largely attributable to the amount of quantitative easing we did during Covid and the comparatively generous furlough scheme. You can argue whether that and the lockdowns were right with the benefit of hindsight as Mervyn King did rather compellingly earlier this week. Liz Truss is just an unfortunate footnote.

Smallman1

alistair as Mervyn King did rather compellingly earlier this week

Unbelievable darts player.

C_J

alistair I think there’s a lot of different factors involved. Money was too loose for sure. Doing QE while prices were rising was something I can’t get my head around to this day.

As one of the more pro-Brexit voices on here I think we’d have to accept that Brexit has probably been an aggravating factor too although at least now we arguably have more freedom in terms of policy response now that we’re out.

What I mean by that is we’re not in the Euro, for example, meaning we can set our own money policy. And we don’t have to listen to their perhaps critical views about bailing out mortgage holders etc.

Wally

alistair That’s what happens when you ‘do a brexit’ and everything gets more expensive.

Raising interest rates isn’t going to work because people are spending high money on over priced food and petrol, not non essential consumer goods. People need to eat and work so good luck getting inflation down when you skin them for every penny on the essentials.

Morty-C-137

Wally It’s not a Brexit thing though or only isolated to Britain. Here in the Netherlands grocery stores just keep fucking raising prices. Especially of any products that are healthy (and fucking toiletpaper?).

They won’t settle for less profits than the absolute killing they made during the pandemic.

Most of us got a 5% pay increase at the start of the year (just some clever tax accounting scheme) and that has now basically evaporated already due to goods just being raised in price more aftwerwards.

whatever

C_J

we arguably have more freedom in terms of policy response now that we’re out.

Which policy freedoms do we have now that we didn’t have pre-Brexit and why are they benefits that lessen the damage wrought by Brexit?

Millsy

C_J sorry, we were using the Euro before Brexit’? No wonder I never seemed to have any disposable cash

303abuser

Morty-C-137 Same shit is happening here. Pretending we have a demand problem when corporate greed is driving inflation. Raising interest rates without a corresponding raise in wages is simply going to cause financial hardship for people and drive more money upwards.

If we don’t start to force large corporations to be good citizens and start actually contributing something to society, especially with an AI revolution on the near horizon, shit is going to get real very quickly.

Morty-C-137

303abuser Same shit is happening here. Pretending we have a demand problem when corporate greed is driving inflation. Raising interest rates without a corresponding raise in wages is simply going to cause financial hardship for people and drive more money upwards.

But the fucked thing is that, shortly after a pay raise corporations simply increase prices even more. The excuse they give is either “we now hav more expensive personnel to cover” or they blatantly raise because “that’s how markets work, folks now have more to spend”

Fucking pigs

Amps

303abuser force large corporations to be good citizens and start actually contributing something to society

You’d need to wheel out the guillotines to get the psychopaths to even consider it.

C_J

i literally spelled that out in my answer, mate.

whatever

C_J

Indeed, but it was a two-parter. Could you expand on why monetary policy and not having to listen to their (I assume you mean EU’s) criticisms about bailing out mortgage holders merited the referendum result in 2016 and the consequent damage?

C_J

Millsy if we’d voted to remain, it was very possible (some would say inevitable) that we’d have to join the Euro sooner or later - especially if Labour get in.

C_J

whatever no because I didn’t say that. I didn’t say it was worth voting leave for that. I was making the point that any assessment of the costs and benefits of voting leave should recognise both that Brexit has hurt us in terms of inflation but to some extent helped us in terms of having greater autonomy in how we respond to it. Other examples might include price controls, changes to regulation or trade deals.

Look, I’m not saying Brexit was great, or even the right thing to do - so don’t come after me please. I was always completely ambivalent. Obviously it has been a bit of a disaster in many ways. You have to be willing to at least keep an open mind to the possibility of some upside too, though, imo.

303abuser

Morty-C-137 Exactly, which is why we need some sort of regulation on profits, especially for essential goods and services.

whatever

C_J

It isn’t linked to whether Labour get into power. From a quick search:

There are 7 non-eurozone members: Bulgaria, Czech Republic, Denmark, Hungary, Poland, Romania, and Sweden who continue to use their own national currencies.
All but Denmark are obliged to join once they meet the euro convergence criteria, which is based on economic indicators (inflation, public debt and public deficit, exchange rate stability and the convergence of interest rates).

C_J

whatever if you’re saying what I think you’re saying - that we’d have had to join like it or not - you’re simply making my point for me.

C_J

303abuser Brexiteer!!!!!!

whatever

C_J

Understood mate and I am not ‘going after you’. What I’m trying to get to is that in order for something to be a benefit, it has to yield tangible advantages as compared to its disadvantages. What you seem to be saying (and correct me if this is wrong) is that a possible benefit of Brexit was not having to listen to criticisms about the Government/BOE’s handling of inflation and how we should alleviate pressure on people that are in danger of having their homes repossessed, so I’m struggling to see the upside here.

I’m totally open to someone highlighting the hidden benefits, but I think we’re at a stage where it is so obvious that Brexit is fucked that people have to be encouraged to say the truth of it and not dilute it by continuing to obfuscate about ‘benefits’ that really don’t exist.

I think the phrase is good day to you sir.

303abuser

C_J On the surface brexit seems like a bad idea, but I’m not going to pretend to be remotely informed on the subject.

whatever

C_J

You said it was more likely to happen under a Labour government. I was saying the main determinant is meeting the euro convergence criteria.

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