So yeah, the economy is fucked

[Visage]

Originally Posted by Oswald

u clueless cunt

rates will be 7% by 2025

No. We're about to enter a massive depression, so why on earth would central banks raise interest rates?

[Oswald]

to control the inflation
we are going back to the end of the 70s

[Visage]

Inflation caused by?

[Oswald]

the fed and BOE are about to print 30trillion to stave off the deflation
then its inflation all the way

[Visage]

Just like in 2008, right, hence all the rampant inflation ever since?

[Malcolm Tucker]

This is nothing like 2008.

[Frank Castle]

Exactly crog.

This is IT

[Malcolm Tucker]

In all seriousness inflation was already rising a little quicker than boe would have liked and was probably going to go above the target on its own, but they were ready to raise interest rates a little (0.75 they got to I think?) to keep it under control

Now three inflationary things have happened out of fucking nowhere in no time at all.

1. Interest rates lowest in how long? probably the history of the country? 0.1%. They can't raise that again any time soon without smashing everyone who is getting through this on borrowed money. Think of how many are covering their 20% furlough wage reduction with money they don't have? Private debt was already sky high and savings non-existent, this was an issue in its own right now it's even worse as coronavirus has likely poured petrol on this. So raising interest rates to fight inflation will be last thing they want to do or they'll only be able to tinker with it by minuscule fractions of a percent, it's not going to go up to any significant level any time soon, everything has settled to a new normal with ultra cheap rates, if anything the average household is only managing to handle that as it is, there's absolutely no headroom for interest rates to go up

2. High demand and low supply for all sorts of consumer goods, food, drink, pretty much anything imported so, you know, most things. The only thing dipping slightly (arguably not nearly enough considering OIL IS LITERALLY CHEAPER THAN A FREDDO) is petrol, but most people aren't feeling the full benefit as car use has plummeted. We're still on the same tank of petrol since this all started. The lawnmower is probably the highest user of petrol in the household now. So even though the money is not spent there, it's spent elsewhere (energy bills sky high for a lot of families right now) so I think most are worse off with cost of living.

3. Last but not least, UK is issuing a metric fucktonne of government bonds to pay for just 3 months of this economic earthquake, but the figures are all on a retarded assumption the country will miraculously spring back in July. They will be pumping even more money into virtually every sector of the economy for another 6-8 months at least.

All of this is inflationary as fuck. As a lot of economists said after the 2008 recession, when tories hamstrung the recovery and we've sorted of been in an economic malaise through the 2010s, we've been left badly exposed to another economic shock. Banks may have shored up emergency capital (I bet they've been burning through that at a rate of knots lately) but we still had a way to go to be back to pre-2008 norms. We deployed our arsenal of weapons and don't have much left apart from just hurling money at everything. It's all we have, open up the taps and hope the currency doesn't devalue too much too quickly. Sterling will be fine though, it won't inflate wildly, it'll never happen to us. It's just one of those things you read about but you don't really think it'll happen. Like that global pandemic they're always banging on about that'll kill millions. Yeah yeah.

[Visage]

But the original point made by Bakez was that we were headed for steep rises in interest rates.

Not going to happen.

Plus its hard to suggest that post covid things are going to be very inflationary - its not like theres going to be huge pent up demand in the economy. The money being pumped in is essentially Keynesian to keep the economy on life support.

[Malcolm Tucker]

I suppose bakez is saying they may feel they have no choice, what'll fuck people the least, letting inflation run high for a sustained period or pressure it downwards but cripple people and businesses in debt

the issue is if we'd have been at 2007 interest rates and inflation etc when this covid hit the measures would be more prominent, now it just feels so impotent to lower a base rate already so close to zero from the last crisis, cheap loans and money were our normality, we have nowhere lower to go