pongo Posted December 8, 2011 Share Posted December 8, 2011 Gordon Brown's policy of artificially low inflation and low interest rates are the largest part of the cause of the uk's problem When you talk about "artificially low inflation" - are you talking about the measure of inflation being inaccurately modelled (so as to make inflation seem artificially smaller) - or are you implying that some underlying objective statistic was deliberately miscalculated or manipulated - or are you implying that some mechanism was employed to somehow keep inflation "artificially low" ? What do you mean by "artificially low inflation" ? Bearing in mind, anyhow, that inflation is a subjective and therefore political estimate of one aspect of a snapshot of an economy. What model are you using and in what way are you suggesting that it was artificial ? by keeping inflation artificially low and leaving interest rates low, it left people with lots of money to spend, and the ability to borrow lots more. This in turn created the housing bubble, which is about to leave people with lots of negative equity type debt due to "real inflation" which is starting to hit Higher rates would have resulted in differently packaged lending - it would have been packaged to be equally affordable per month. People borrowed because unregulated collateralization created a seemingly infinite pool of magic liquidity. It was that liquidity which resulted in the seemingly favourable rates. Selling and repackaging that liquidity (and selling insurance against those loans) was a bigger business than actually collecting interest. The worse the risk the bigger the profits for the literally irresponsible lenders. The excellent documentary 'Inside Job' was broadcast last night on BBC4 as part of the Storyville season. Watch it here. A huge part of the problem has been created by 'revolving door' government - ie vested interests being appointed to govt or regulatory roles. That borrowing has not stopped - people are continuing to borrow beyond their means - for example "topping up" their mortgages to fund further spending, holidays, xmas etc. Link to comment Share on other sites More sharing options...
Lxxx Posted December 8, 2011 Share Posted December 8, 2011 The power elite have modified and updated their modus operandi now and have progressed from using bombs and bullets to 'financial weapons of mass destruction' to enslave us now. The big guns are saved for a rainy day, which might be coming soon to complete the job. Link to comment Share on other sites More sharing options...
Tweek Posted December 8, 2011 Share Posted December 8, 2011 The power elite have modified and updated their modus operandi now and have progressed from using bombs and bullets to 'financial weapons of mass destruction' to enslave us now. The big guns are saved for a rainy day, which might be coming soon to complete the job. Better buy extra bread this week then. Link to comment Share on other sites More sharing options...
Lxxx Posted December 8, 2011 Share Posted December 8, 2011 ...and lots of baked beans...in gold-plated tins. Link to comment Share on other sites More sharing options...
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