Brown's Plans

Gordon is gearing up for the coming meetings where the New Global Economic Order will be planned. We get a peek at some of his ideas in the trailing of his speech to The City tonight.

The Prime Minister yesterday promised to work with US President-elect Barack Obama to build a new global society in which the markets are subjected to morality and ordinary people's interests are put first.

Who could argue against ordinary peoples' interests being put first? Certainly not , indeed I would strongly argue that this is the very point of a market based system. For...

Continue reading...

Email to a friend   |   Permalink   |   Comment

Inflation, yes, but what about deflation?

It's horribly difficult to actually compare living standards across time. Not just because of inflation of course, that's simple enough to calculate. In fact, here's an example:
Millionaires need £17.5 million today to enjoy the equivalent lifestyle of a millionaire half a century ago, research shows. Latest estimates show there are more than 375,000 millionaires in the UK, but these individuals no longer enjoy the lifestyle they once could, according to the findings by Halifax Financial Services. This is because inflation has significantly eroded the value of money, with £1 million today having the equivalent spending power...

Continue reading...

Email to a friend   |   Permalink   |   Comment

Banks and LIBOR

There's a certain confusion doing the rounds about what LIBOR is and does. To define it, LIBOR is simply the rate at which banks lend to each other (without going into any more boring detail).

But it isn't the rate at which the Bank of England will lend to banks, nor is it the rate at which the banks borrow our savings and deposits to lend to other people. Those are rather lower, so why is it that LIBOR is the starting point for the rates at which the banks will lend to us?

Why don't the banks borrow from...

Continue reading...

Email to a friend   |   Permalink   |   Comment

Look to the inflation forecasts

Is inflation really falling? I am understandably taken to task by some CoffeeHousers for claiming that it is. When Brown claimed it was in PMQs yesterday, it was submitted to me as a possible Brownie. But what he says is perfectly true, and it's worth looking at in more detail - for this not only explains today's rate cut, but much about the nature of the deep recession we have now entered. It also underlines what I regard as a flaw in business reporting. You can pick up the papers and find the price of shares, bonds, wheat etc....

Continue reading...

Email to a friend   |   Permalink   |   Comments (9)

Spot the hypocrisy

Exhibit A: Yvette Cooper urges the banks to pass the interest rate cut on to borrowers.

Exhibit B: The state-owned Northern Rock withdraws tracker mortgages - which follow the movements of the base rate - to avoid passing rate cuts on to new borrowers.

Email to a friend   |   Permalink   |   Comments (4)