Pound slumps to all-time low against dollar

[Chomper Higgot]

Just now, BritManToo said:

I thought they bought 65M of Gilts?

Yes, the BoE’s own Guilts.

 

AKA quantitative easing.

 

https://en.m.wikipedia.org/wiki/Quantitative_easing

[baboon]

7 minutes ago, hotandsticky said:

It will be forgotten well within the 2 year survival deadline.

We'll see. 

[BritManToo]

2 minutes ago, Chomper Higgot said:

Yes, the BoE’s own Guilts.

 

AKA quantitative easing.

 

https://en.m.wikipedia.org/wiki/Quantitative_easing

So you're saying the government repaying a loan early is a bad thing?

Edited October 3, 2022 by BritManToo

[Chomper Higgot]

5 minutes ago, baboon said:

You do know they have just scrapped the tax cut for the rich?

No they have not, they’ve scrapped the 45-> 40% tax cut to high earners.

 

High earners are still to receive £Billions of tax cuts paid for with borrowed money.

[Chomper Higgot]

Just now, BritManToo said:

So you're saying the government repaying a loan early is a bad thing?

They are repaying a loan early, they are propping up the currency by buying Guilts.

 

They pumped out £65Billion to reduce the damage done by the idiot budget, this will increase inflation.

[BritManToo]

2 minutes ago, Chomper Higgot said:

They pumped out £65Billion to reduce the damage done by the idiot budget, this will increase inflation.

I see inflation in the UK as a good thing.

It pushes up my pension which I spend in Thailand.

[RayC]

6 minutes ago, hotandsticky said:

That would just be stubborn.

 

It didn't look like a great move from day one - not just from the populist vote angle, economically it was unfunded and therefore poorly thought out 

 

Correcting an error and living with opposition p1ss taking is preferable to the economic and political consequences of a bad decision.

The whole package is largely unfunded as it is underpinned by increased government borrowing. That's not the issue. The issue is why has this abrupt 'about turn' occurred?

 

I thought that the whole point of cutting the top rate of tax was that the increased spend of this group would generate demand and consumption in lower income brackets?

 

According to the PM yesterday,  this was sound economic policy. If that's the case surely it is today? Where is the courage of her convictions?

[youreavinalaff]

6 hours ago, SatEng said:

and just benefitted from another tax cut

So your point is?

Keep up with the news. 555

[RayC]

18 minutes ago, hotandsticky said:

It will be forgotten well within the 2 year survival deadline.

She'll be lucky to survive 2 months if she carries on like this.

[nigelforbes]

3 minutes ago, Chomper Higgot said:

They are repaying a loan early, they are propping up the currency by buying Guilts.

 

They pumped out £65Billion to reduce the damage done by the idiot budget, this will increase inflation.

Not exactly.

 

The BOE is going to buy Gilts at the rate of 5 billion a week, they haven't started yet and may never need to do so since the news that they might, seems to have quelled markets. BTW Gilts and guilts, oh never mind. ????

 

Secondly, they are going to use the Foreign Currency Reserves to buy the Gilts, later they will sell them again so there's no negative hit taken anywhere.

 

 

[Chomper Higgot]

1 minute ago, RayC said:

The whole package is largely unfunded as it is underpinned by increased government borrowing. That's not the issue. The issue is why has this abrupt 'about turn' occurred?

 

I thought that the whole point of cutting the top rate of tax was that the increased spend of this group would generate demand and consumption in lower income brackets?

 

According to the PM yesterday,  this was sound economic policy. If that's the case surely it is today? Where is the courage of her convictions?

Exactly that.

 

Time for Truss to publish the economic plan she claims she’s working to.

[baboon]

4 minutes ago, RayC said:

The whole package is largely unfunded as it is underpinned by increased government borrowing. That's not the issue. The issue is why has this abrupt 'about turn' occurred?

 

I thought that the whole point of cutting the top rate of tax was that the increased spend of this group would generate demand and consumption in lower income brackets?

 

According to the PM yesterday,  this was sound economic policy. If that's the case surely it is today? Where is the courage of her convictions?

She HAS convictions other than 'Me, me, me'...?

[baboon]

3 minutes ago, Chomper Higgot said:

Exactly that.

 

Time for Truss to publish the economic plan she claims she’s working to.

A quote from another forum I find pertinent:

 

"It must be quite depressing being Truss and Kwarteng, knowing that you’re only in the job you are because you’re just a front for shady “think tanks” to try to rollout their tax/economic changes to suit their donors, without any of the negative impact to themselves."

[youreavinalaff]

6 hours ago, Chomper Higgot said:

Your ‘silent majority’ is a myth.

 

Elections are won by attracting a small number of swing voters in key ‘swing’ constituencies.

 

You can waffle on about ‘Work shy on benefits’ all you wish, when voters can’t afford to put regular meals in front of their kids, can’t afford to heat their homes and can’t afford their mortgage repayments, they are not listening to ‘scapegoating’.

 

They are focussed on the problems this Government has created for them.

 

 

Not problems they've caused themselves by not planning?

 

When things are good many people spend spend spend. Get a higher mortgage, buy a new car, go on holiday, depend £1000 per kid at Christmas.

 

My wife and I work 84 hours a week between us. Our hourly rate is just above minimum wage. We save when thigs are good. for times when things are more difficult. I could see that things would not just go back to normal after the pandemic and lockdowns. To me it was obvious. We saved to be ready. Those that did the same are just like us, not cold not hungry and not complaining and asking for handouts.

 

Those that think everything will remain constant, those that think governments can just give billions in furlough, and lockdown the economy without consequences, those that did not think ahead are now struggling. Simple.

[youreavinalaff]

18 minutes ago, Chomper Higgot said:

No they have not, they’ve scrapped the 45-> 40% tax cut to high earners.

 

Isn't that what you were talking about?

Edited October 3, 2022 by youreavinalaff

[proton]

Pound is 42.6 to the baht, what it was before all this fuss started

[RayC]

10 minutes ago, nigelforbes said:

Not exactly.

 

The BOE is going to buy Gilts at the rate of 5 billion a week, they haven't started yet and may never need to do so since the news that they might, seems to have quelled markets. BTW Gilts and guilts, oh never mind. ????

 

Secondly, they are going to use the Foreign Currency Reserves to buy the Gilts, later they will sell them again so there's no negative hit taken anywhere.

 

 

Unfortunately it is nowhere near as straightforward as that

https://theconversation.com/bank-of-england-bonds-rescue-has-two-ugly-implications-more-inflation-and-an-even-weaker-pound-191653

[nigelforbes]

2 minutes ago, RayC said:

Unfortunately it is nowhere near as straightforward as that

https://theconversation.com/bank-of-england-bonds-rescue-has-two-ugly-implications-more-inflation-and-an-even-weaker-pound-191653

I'm very happy to hear counter arguments or rebuttals but not from nonsense rags like The Conversation. Please, if you don't want use your own arguments, please use a source that is credible and reliable.

[nigelforbes]

Here's a news link to confirm the rate at which BOE will buy Gilts, 5 bill per month over 12 months:

 

https://www.reuters.com/markets/europe/bank-england-buy-long-dated-bonds-suspends-gilt-sales-2022-09-28/

[placeholder]

1 minute ago, nigelforbes said:

Here's a news link to confirm the rate at which BOE will buy Gilts, 5 bill per month over 12 months:

 

https://www.reuters.com/markets/europe/bank-england-buy-long-dated-bonds-suspends-gilt-sales-2022-09-28/

As that 5 day old article notes, that happened because of the tax cuts. Maybe now that things have changed, so have the plans of the BOE.

[Chomper Higgot]

13 minutes ago, youreavinalaff said:

Isn't that what you were talking about?

Erm no, it’s only a small fraction of the money being borrowed that being handed out in tax cuts for the already wealthy.

 

 

[youreavinalaff]

Just now, Chomper Higgot said:

Erm no, it’s only a small fraction of the money being borrowed that being handed out in tax cuts for the already wealthy.

 

 

Please could you elaborate? What tax cuts for the wealthy were there in the mini budget last Friday? Thanks.

[nigelforbes]

2 minutes ago, placeholder said:

As that 5 day old article notes, that happened because of the tax cuts. Maybe now that things have changed, so have the plans of the BOE.

The article was written on Thursday 29 September, US time, nothing has changed. 

[placeholder]

2 minutes ago, nigelforbes said:

The article was written on Thursday 29 September, US time, nothing has changed. 

Read the fine print:

https://www.reuters.com/markets/europe/bank-england-buy-long-dated-bonds-suspends-gilt-sales-2022-09-28/

[nigelforbes]

Just now, placeholder said:

Read the fine print:

https://www.reuters.com/markets/europe/bank-england-buy-long-dated-bonds-suspends-gilt-sales-2022-09-28/

I have no idea what you want me to read but it's not that relevant anyway. Look, I'm really sorry to have to do this but I've been putting it off all week. Your continued chasing of my posts without having anything useful to say is distracting from my enjoyment of this site. So I'm sorry to say I'm putting you on ignore and wont see your future posts.  Take care

[placeholder]

10 minutes ago, nigelforbes said:

I have no idea what you want me to read but it's not that relevant anyway. Look, I'm really sorry to have to do this but I've been putting it off all week. Your continued chasing of my posts without having anything useful to say is distracting from my enjoyment of this site. So I'm sorry to say I'm putting you on ignore and wont see your future posts.  Take care

Well, in a way you're right. 4 or 5 days isn't relevant, but you're the one who raised that point in the first place. But the point I was making still stands: things have changed in an important way since that decision was announced. So BOE policy may change, too.

Edited October 3, 2022 by placeholder

[Jai Dee]

A couple of posts of an inflammatory nature and responses have been removed.

Flaming other members is against Forum Rules.

 

[placeholder]

56 minutes ago, nigelforbes said:

I'm very happy to hear counter arguments or rebuttals but not from nonsense rags like The Conversation. Please, if you don't want use your own arguments, please use a source that is credible and reliable.

Not surprising that some disapprove of it:

 

"The Conversation is a network of not-for-profit media outlets publishing news stories and research reports online, with accompanying expert opinion and analysis.[1][2] Articles are written by academics and researchers under a free Creative Commons license, allowing reuse without modification.[3][2] Its model has been described as explanatory journalism.[4][5][6] "

https://en.wikipedia.org/wiki/The_Conversation_(website)

[RayC]

2 hours ago, nigelforbes said:

I'm very happy to hear counter arguments or rebuttals but not from nonsense rags like The Conversation. Please, if you don't want use your own arguments, please use a source that is credible and reliable.

I am quite capable of formulating my own arguments but when they have effectively been articulated for me - as in this instance - I prefer not to go to the bother of doing so.

 

With regards to the article itself. Perhaps, if you - and the two individuals who 'liked' your post - had been able to put your bias to one side and had bothered to actually open the link before dismissing the source (and, presumably therefore the article?) as "nonsense", you would have found that the author is an academic named Costas Milas. Prof. Milas teaches Finance at the Univ. of Liverpool, contributes to the World Economic Forum and has written articles for the FT. I would suggest that this makes him a credible source.

 

Moreover, the article is not simply a piece of government bashing. imo it offers a balanced view of what has happened in the money markets and what might happen in the future: it served to llustrate my point, namely that things are not as simple as you portrayed in your original post.

[nigelforbes]

37 minutes ago, RayC said:

I am quite capable of formulating my own arguments but when they have effectively been articulated for me - as in this instance - I prefer not to go to the bother of doing so.

 

With regards to the article itself. Perhaps, if you - and the two individuals who 'liked' your post - had been able to put your bias to one side and had bothered to actually open the link before dismissing the source (and, presumably therefore the article?) as "nonsense", you would have found that the author is an academic named Costas Milas. Prof. Milas teaches Finance at the Univ. of Liverpool, contributes to the World Economic Forum and has written articles for the FT. I would suggest that this makes him a credible source.

 

Moreover, the article is not simply a piece of government bashing. imo it offers a balanced view of what has happened in the money markets and what might happen in the future: it served to llustrate my point, namely that things are not as simple as you portrayed in your original post.

Indeed I did read the article but I stopped when the author started to use previous articles she had written as the basis for her current article and the justification to support her current view. There's nothing quite like using experts to support your opinion and hypothesis but when you are that expert...well! After that I started to look at the ownership of the site and its history, it's effectively university academics and researchers rather than industry or sector experts. There was yet a third aspect which had to do with the founder of the site which you will be well aware of given the controversy surrounding him. That was enough for me. So yes, I did do due diligence before I dismissed the link.