Deflation

[Ruprect]

You don't think that low RPI/CPI was used as a justification to ignore rising asset prices (a sign of the credit bubble)? This is what Mervyn King said in 2003:



Basically he is saying that central banks can ignore asset prices and just concentrate on "inflation".

Or you don't think that the asset/credit bubble was a significant contributory factor to the subsequent economic collapse?

Like I said, indirect at best. Lack of regulation around packaged debt was a little more significant IMO

[Freamon]

Like I said, indirect at best. Lack of regulation around packaged debt was a little more significant IMO

The reason the packaged debt marked imploded was that the models used to price those packages all had the assumption that the valuation of the assets behind them (houses) was not a bubble valuation and that those asset values could never fall. For the regulators to spot that issue, they would have needed to have accepted that the underlying asset valuations were wrong, i.e. the credit bubble existed. So, in my view, the lack of regulation was in large part thanks to the philosophy of the regulators that as long as they could "control" "prices" i.e. RPI/CPI they did not have to worry about asset bubbles and by extension the fallout that the bursting of those bubbles would cause. King even says so in the quote above, when he cites Greenspans view that regulators could just "mitigate the fallout when it occurs".

[AtW]

You seem wilfully oblivious to this.

RA RA RA I am very oblivious to this

[Ruprect]

The reason the packaged debt marked imploded was that the models used to price those packages all had the assumption that the valuation of the assets behind them (houses) was not a bubble valuation and that those asset values could never fall. For the regulators to spot that issue, they would have needed to have accepted that the underlying asset valuations were wrong, i.e. the credit bubble existed. So, in my view, the lack of regulation was in large part thanks to the philosophy of the regulators that as long as they could "control" "prices" i.e. RPI/CPI they did not have to worry about asset bubbles and by extension the fallout that the bursting of those bubbles would cause. King even says so in the quote above, when he cites Greenspans view that regulators could just "mitigate the fallout when it occurs".

Again you're creating your own cause and effect without backing it up. Trouble is I suspect now you're so entrenched in your own argument that you'll keep digging regardless of what anyone else suggests

[Freamon]

Again you're creating your own cause and effect without backing it up. Trouble is I suspect now you're so entrenched in your own argument that you'll keep digging regardless of what anyone else suggests

Clearly you disagree, although you haven't really explained why. Your counter-argument so far has essentially consisted of "oh no it doesn't".

[Ruprect]

Clearly you disagree, although you haven't really explained why. Your counter-argument so far has essentially consisted of "oh no it doesn't".

It's behind you



To be fair, I'm not trying (can't be bothered) to have an argument, just pointing out some holes in yours.

[AtW]

To be fair, I'm not trying (can't be bothered) to have an argument, just pointing out some holes in yours.

There is a hole in Freamon's mind.

[Freamon]

It's behind you



To be fair, I'm not trying (can't be bothered) to have an argument, just pointing out some holes in yours.

To be fair, you haven't really pointed out any holes, you've just said there are holes, but not explained what they actually are.