Where is the doom?

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DimPrawn replied

3 June 2013, 11:51
Originally posted by suityou01 View Post

That is until interest rates go up then the government will have to default on it's debts. Then there will be much doom.

But interest rates are set by the govt, why on earth put them up?

Instead there is talk of more "easing" and negative base rates....
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suityou01 replied

3 June 2013, 11:48
Originally posted by DimPrawn View Post

Pre 2008.

Fractional reserve banking meant banks were effectively "printing" an almost limitless amount of credit, house prices around the globe boomed, stock markets boomed, everyone was getting "richer" on all this lovely credit.

Then bang!

It all collapses.

Lessons must be learned, banks must not lend recklessly, reforms must take place, bubbles must not be allowed to happen...

Then central banks print money, and roll forward to 2013, stock markets are booming, property prices are booming, cheap money is everywhere, bubbles are blowing, govts trying to force banks to lend to anyone.

Moral of the story.

The only growth is the growth of cheap money. Govt wants growth at any cost. There is no prudent banking, and any falls will be underwritten with more cheap money.

Buy buy buy!

That is until interest rates go up then the government will have to default on it's debts. Then there will be much doom.
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DimPrawn started a topic Where is the doom?

3 June 2013, 11:23
Where is the doom?

Pre 2008.

Fractional reserve banking meant banks were effectively "printing" an almost limitless amount of credit, house prices around the globe boomed, stock markets boomed, everyone was getting "richer" on all this lovely credit.

Then bang!

It all collapses.

Lessons must be learned, banks must not lend recklessly, reforms must take place, bubbles must not be allowed to happen...

Then central banks print money, and roll forward to 2013, stock markets are booming, property prices are booming, cheap money is everywhere, bubbles are blowing, govts trying to force banks to lend to anyone.

Moral of the story.

The only growth is the growth of cheap money. Govt wants growth at any cost. There is no prudent banking, and any falls will be underwritten with more cheap money.

Buy buy buy!
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