Macroeconomics, the economy, inflation etc. *likely to be very dull*
Comments
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If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.0
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Governments/Banks shouldn't have relied on that train of thought though in my mind, the future can change. Near zero interest rates have been a new low in historic morms (they were even considering ZIRP at one point). They should have considered the debt at the average historic IR. That would have been prudent conservative banking.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
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I believe that UK Government debt tends to have a longer duration than many other countries.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
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Everyone's an expert in bond prices after the fact, but in the moment I think you'd be hard pressed to find good reason to criticise the make up of the duration choice of UK gov't debt in the context of the time.1
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Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
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If our debt is over a long period at low interest rates, inflation would make it into a non-problem wouldn't it?Dorset_Boy said:
I believe that UK Government debt tends to have a longer duration than many other countries.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
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The problem is that the debt is permanent so eventually it will all be at much higher interest rates and debt servicing costs will eat up an ever higher % of Govt expenditure? As this happens they will have to spend less elsewhere or borrow more.rick_chasey said:Everyone's an expert in bond prices after the fact, but in the moment I think you'd be hard pressed to find good reason to criticise the make up of the duration choice of UK gov't debt in the context of the time.
You know where I think this will end.0 -
I think the UK has longer dated debt than most countries, but a large chunk is owned by the Bank of England in any case.kingstongraham said:
If our debt is over a long period at low interest rates, inflation would make it into a non-problem wouldn't it?Dorset_Boy said:
I believe that UK Government debt tends to have a longer duration than many other countries.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
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I'll keep saying it till I am blue in the face. Everything should be orientated about long term sustainable GDP growth.surrey_commuter said:
The problem is that the debt is permanent so eventually it will all be at much higher interest rates and debt servicing costs will eat up an ever higher % of Govt expenditure? As this happens they will have to spend less elsewhere or borrow more.rick_chasey said:Everyone's an expert in bond prices after the fact, but in the moment I think you'd be hard pressed to find good reason to criticise the make up of the duration choice of UK gov't debt in the context of the time.
You know where I think this will end.
All roads should lead to that, and that includes borrowing. I am not interested in imaginary lines in the sand for when debt is too much etc etc.
If you decide to run a policy (austerity and Brexit) which harm long term growth, then yes, you will likely run into debt problems down the road.
The solution however is to get the f*cking economy going again, rather than doubling down on austerity.
If it requires borrowing, then you do that - though I think we all agree that as the borrowing costs increase, the return on growth needs to be higher to justify it, so it should become a less appealing option as costs rise.0 -
C
You are being disingenuous, how could anybody oppose borrowing for long term economic growth?rick_chasey said:
I'll keep saying it till I am blue in the face. Everything should be orientated about long term sustainable GDP growth.surrey_commuter said:
The problem is that the debt is permanent so eventually it will all be at much higher interest rates and debt servicing costs will eat up an ever higher % of Govt expenditure? As this happens they will have to spend less elsewhere or borrow more.rick_chasey said:Everyone's an expert in bond prices after the fact, but in the moment I think you'd be hard pressed to find good reason to criticise the make up of the duration choice of UK gov't debt in the context of the time.
You know where I think this will end.
All roads should lead to that, and that includes borrowing. I am not interested in imaginary lines in the sand for when debt is too much etc etc.
If you decide to run a policy (austerity and Brexit) which harm long term growth, then yes, you will likely run into debt problems down the road.
The solution however is to get the f*cking economy going again, rather than doubling down on austerity.
If it requires borrowing, then you do that - though I think we all agree that as the borrowing costs increase, the return on growth needs to be higher to justify it, so it should become a less appealing option as costs rise.
If the Govt borrows £200bn and announces an extra £2bn to invest in rural broadband then we are both happy with the £2bn.
Where we disagree is the other £200bn paying wages and benefits at levels we can not afford.0 -
In simple terms your optimism about our GDP is much higher than mine. We may have taken control of our borders (🤣) but we are at the whim of the world markets.rick_chasey said:
I'll keep saying it till I am blue in the face. Everything should be orientated about long term sustainable GDP growth.surrey_commuter said:
The problem is that the debt is permanent so eventually it will all be at much higher interest rates and debt servicing costs will eat up an ever higher % of Govt expenditure? As this happens they will have to spend less elsewhere or borrow more.rick_chasey said:Everyone's an expert in bond prices after the fact, but in the moment I think you'd be hard pressed to find good reason to criticise the make up of the duration choice of UK gov't debt in the context of the time.
You know where I think this will end.
All roads should lead to that, and that includes borrowing. I am not interested in imaginary lines in the sand for when debt is too much etc etc.
If you decide to run a policy (austerity and Brexit) which harm long term growth, then yes, you will likely run into debt problems down the road.
The solution however is to get the f*cking economy going again, rather than doubling down on austerity.
If it requires borrowing, then you do that - though I think we all agree that as the borrowing costs increase, the return on growth needs to be higher to justify it, so it should become a less appealing option as costs rise.The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
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The government effectively sets the rate.focuszing723 said:
Governments/Banks shouldn't have relied on that train of thought though in my mind, the future can change. Near zero interest rates have been a new low in historic morms (they were even considering ZIRP at one point). They should have considered the debt at the average historic IR. That would have been prudent conservative banking.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
If they are lending to themselves?surrey_commuter said:
Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
As far as my limited understanding goes, the UK issued conventional gilts due up in 2071 a few years back at 1.625%.surrey_commuter said:
Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
Wouldn't they look pretty good (for the government) now?0 -
And that is where you hit one of the many inherent contradictionsrjsterry said:
The government effectively sets the rate.focuszing723 said:
Governments/Banks shouldn't have relied on that train of thought though in my mind, the future can change. Near zero interest rates have been a new low in historic morms (they were even considering ZIRP at one point). They should have considered the debt at the average historic IR. That would have been prudent conservative banking.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
If they are lending to themselves?surrey_commuter said:
Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
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TBB is the forum expert on Govt debt but from my limited understanding there would be very little demand a that level. I think the deepest markets are at 10 years and that the Govt has done well increasing the % of longer dated stuff.kingstongraham said:
As far as my limited understanding goes, the UK issued conventional gilts due up in 2071 a few years back at 1.625%.surrey_commuter said:
Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
Wouldn't they look pretty good (for the government) now?0 -
Does this all not lead back to having sensible government policy that is pro-business and pro-growth?0
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Yesskyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
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I'm not sure it's a contradiction. They could just issue more money but that would devalue the currency, so by introducing the idea that the money is 'borrowed' it counters that potential devaluation.surrey_commuter said:
And that is where you hit one of the many inherent contradictionsrjsterry said:
The government effectively sets the rate.focuszing723 said:
Governments/Banks shouldn't have relied on that train of thought though in my mind, the future can change. Near zero interest rates have been a new low in historic morms (they were even considering ZIRP at one point). They should have considered the debt at the average historic IR. That would have been prudent conservative banking.kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
If they are lending to themselves?surrey_commuter said:
Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
If it was that easy then every Govt around the world would do it.skyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
Once you have an effective rule of law then it is arguable that the best they can do is as little as possible to maintain consistency.
First of all you need a Govt that does not believe the State is all powerful and that you need to give the market the opportunity0 -
It is a combo of Austerity and Brexit, surely.surrey_commuter said:
If it was that easy then every Govt around the world would do it.skyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
Once you have an effective rule of law then it is arguable that the best they can do is as little as possible to maintain consistency.
First of all you need a Govt that does not believe the State is all powerful and that you need to give the market the opportunity
Nations who pursued Austerity post GFC performed lower than those who didn't. You can basically draw a line between how hard they went for austerity and how low the growth was.
Caveat are the PIGS who obviously went a bit mad pre GFC and paid the price, but that was exacerbated by the North Euro insistence on extra austerity.
So that puts a break on it and just when the UK emerges from that cost they go and do Brexit and that knocks off however much GDP, making everything difficult, but it also massively reduces investment in the UK due to the uncertainty and concerns about the political stability of the nation, ala Italy in the 90s.
Whole thing is a decade and a half of f*ck ups. All put in train by Cameron and Osbourne.0 -
So the state just needs to concentrate on rule of law? So full privatisation of education too? Go as far as army?surrey_commuter said:
If it was that easy then every Govt around the world would do it.skyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
Once you have an effective rule of law then it is arguable that the best they can do is as little as possible to maintain consistency.
First of all you need a Govt that does not believe the State is all powerful and that you need to give the market the opportunity
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there is a big difference between nothing and as little as possible.Jezyboy said:
So the state just needs to concentrate on rule of law? So full privatisation of education too? Go as far as army?surrey_commuter said:
If it was that easy then every Govt around the world would do it.skyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
Once you have an effective rule of law then it is arguable that the best they can do is as little as possible to maintain consistency.
First of all you need a Govt that does not believe the State is all powerful and that you need to give the market the opportunity0 -
Up to 25 years has always been very liquid, but up to 50 years seems possible now too. For example, Bouygeus are building and operating Brighton student accommodation for 50 years, and if an investor is willing to put their money into that then they will into gilts.surrey_commuter said:
TBB is the forum expert on Govt debt but from my limited understanding there would be very little demand a that level. I think the deepest markets are at 10 years and that the Govt has done well increasing the % of longer dated stuff.kingstongraham said:
As far as my limited understanding goes, the UK issued conventional gilts due up in 2071 a few years back at 1.625%.surrey_commuter said:
Why would anybody lend on those terms?kingstongraham said:If our massive borrowing was very long term at very low interest rates, we'd be sitting pretty now wouldn't we? With regards to the debt.
Wouldn't they look pretty good (for the government) now?
https://www.bouygues-es.co.uk/bouygues-es-officially-starts-50-year-fm-contract-university-brighton0 -
I disagree.surrey_commuter said:
there is a big difference between nothing and as little as possible.Jezyboy said:
So the state just needs to concentrate on rule of law? So full privatisation of education too? Go as far as army?surrey_commuter said:
If it was that easy then every Govt around the world would do it.skyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
Once you have an effective rule of law then it is arguable that the best they can do is as little as possible to maintain consistency.
First of all you need a Govt that does not believe the State is all powerful and that you need to give the market the opportunity
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I always laugh when people say "It's the least you can do.".Jezyboy said:
I disagree.surrey_commuter said:
there is a big difference between nothing and as little as possible.Jezyboy said:
So the state just needs to concentrate on rule of law? So full privatisation of education too? Go as far as army?surrey_commuter said:
If it was that easy then every Govt around the world would do it.skyblueamateur said:Does this all not lead back to having sensible government policy that is pro-business and pro-growth?
Once you have an effective rule of law then it is arguable that the best they can do is as little as possible to maintain consistency.
First of all you need a Govt that does not believe the State is all powerful and that you need to give the market the opportunity
Oh, I can do much less than that. 😉The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
Your generational time bomb starts here.0 -
Paying nursery staff more? As I said before, it is only two years.rick_chasey said:
Your generational time bomb starts here.0 -
but you told us earnings had flatlinedrick_chasey said:
Your generational time bomb starts here.0 -
Is that 2 years before you get some limited cover that wouldn't be sufficient to work full time.TheBigBean said:
Paying nursery staff more? As I said before, it is only two years.rick_chasey said:
Your generational time bomb starts here.0
