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It was all just a bad dream

So, that was it. The worst recession in living memory is, if you believe the latest government think tank reports, now over. The recession that Alistair Darling said would be the worst for 60 years (and he recently revised that estimate upwards to 100 years) has passed with nary a whimper in real terms. True, if you lost your job in the last year or so then you might not see it as being a particularly benign period of history, but really, as these things go, this has been ‘recession lite’, a recession for the generation that doesn’t dorecessions. Which, of course, makes me and Lance look a bit silly. Having correctly predicted that the recession would actually...

posted on: Jun 10, 2009 | author: Alex

Basic guide to Quantitative Easing

This is an article that I could have written a few months ago, when the Bank of England stated its intention to begin ‘queasing’. But it has become rather more relevant now that one of the pronouncements of the G20 summit is that the International Monetary Fund (IMF) will itself begin to ‘print’ additional SDRs (Special Drawing Rights, effectively the IMF’s own currency) which its contributor countries can draw down in the shape of dollars, euros, etc. Note my use of the word ‘print’ in the above paragraph. The days when first world countries used the printing press to increase the volume of money in circulation have long gone, assigned to eras such as Weimar Germany. Paper and...

posted on: Apr 4, 2009 | author: Alex

Where to put your savings in today’s low interest rate economy...

I’ve been waiting to finish this article until the UK’s inflation figures were released. They show the CPI figure for November to be 4.1%, higher than predicted by the majority of economists. This figure is more than double the 2% target that the Bank of England’s Monetary Policy Committee is supposed to aim for, yet the UK’s interest rates are falling rather than rising. (Incidentally, a fall in the rate of inflation doesn’t necessarily mean that prices are falling. That is one possible interpretation, but alternatively it could mean that prices are continuing to rise, just not as quickly as before. Newspaper articles rarely make this distinction, unfortunately.) Of course, the MPC would say that it is targeting...

posted on: Dec 17, 2008 | author: Alex

Deflation or inflation – what will happen in the UK?...

I’ve written in a previous article about the various concepts involved in economic inflation and how it can affect the value of your money, your wages and the things you buy. The opposite of inflation is deflation, which I’ll explain in this article before going on to discuss the probable and possible situations in the UK for the next few years. The ‘deflation versus inflation’ argument is more important in the UK today than it has been at any time in the last 30 years, so it’s worth thinking about in some depth. So, deflation. If inflation is a general increase in prices and/or wages driven by the greater availability of money (whether ‘real’ money or debt), then...

posted on: Dec 6, 2008 | author: Lance

Financial crisis over, armageddon cancelled – everything’s going to be just fine, right?...

Gordon Brown’s rescue plan for the banking industry seems to have been used as a blueprint for similar bailouts across Europe and even in the US, and for now it seems like the stock markets are responding positively with record gains on most of the major markets. So everything’s peachy and happy days are here again, right? Wouldn’t bank on it (haha – see what I did there?). The bailouts seem to have done a good job of restoring confidence in the world’s banks, which has helped them to recover some of their share values and in turn enable the plummeting stockmarkets to recover some of the massive losses that happened last week. But there’s still an awful...

posted on: Oct 14, 2008 | author: Lance

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