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surrey_commuter said:

If I am right then you think we will see a gradual tightening of the debt markets and the Govt will cut it’s cloth to get debt under control.

Stevo_666 said:

surrey_commuter said:

rick_chasey said:

@surrey_commuter

https://www.collaborativefund.com/blog/who-pays-for-this/

Enjoy (or not).

I get your argument- I just don’t agree with it.

My argument is to mix your knowledge of economics, mix in a dose of common sense and then apply a filter of logical thinking.

Every few years we have a new Chancellor who preaches a version of “prudence” and introduces a new set of financial disciplines because the old ones no longer apply due to some paradigm shift.

Your link extols last month’s theory that so long as debt grows slower than GDP then we remain in a land of milk and honey.
This month we have a new boy and a new theory that we need to keep debt servicing costs below 6% and then we remain in the land of milk and honey.

Why change theory? they had breached it year after year and had announced spending plans that would see them breach it for the next 5 years.

Essentially I think where we disagree is what the end game will look like. If I am right then you think we will see a gradual tightening of the debt markets and the Govt will cut it’s cloth to get debt under control.

I think the tipping point was the GFC and that since then debt is already beyond political control. The underlying debt position will continue to worsen until another black swan hits and the end game will look like Greece ten years ago with the Govt forced to live within its means.

We are both dogmatic people but there must be a part of you you that would give a % chance on me being right.

You of course can not prove me wrong as I will just duck behind timing 😀

If you think we will have a problem with debt, watch Italy as this crisis unfolds and what that might do for the Eurozone. I predicted this a while back and looks like the trigger point may have come sooner than anyone realised.

Stevo_666 said:

surrey_commuter said:

Stevo_666 said:

surrey_commuter said:

rick_chasey said:

@surrey_commuter

https://www.collaborativefund.com/blog/who-pays-for-this/

Enjoy (or not).

I get your argument- I just don’t agree with it.

My argument is to mix your knowledge of economics, mix in a dose of common sense and then apply a filter of logical thinking.

Every few years we have a new Chancellor who preaches a version of “prudence” and introduces a new set of financial disciplines because the old ones no longer apply due to some paradigm shift.

Your link extols last month’s theory that so long as debt grows slower than GDP then we remain in a land of milk and honey.
This month we have a new boy and a new theory that we need to keep debt servicing costs below 6% and then we remain in the land of milk and honey.

Why change theory? they had breached it year after year and had announced spending plans that would see them breach it for the next 5 years.

Essentially I think where we disagree is what the end game will look like. If I am right then you think we will see a gradual tightening of the debt markets and the Govt will cut it’s cloth to get debt under control.

I think the tipping point was the GFC and that since then debt is already beyond political control. The underlying debt position will continue to worsen until another black swan hits and the end game will look like Greece ten years ago with the Govt forced to live within its means.

We are both dogmatic people but there must be a part of you you that would give a % chance on me being right.

You of course can not prove me wrong as I will just duck behind timing 😀

If you think we will have a problem with debt, watch Italy as this crisis unfolds and what that might do for the Eurozone. I predicted this a while back and looks like the trigger point may have come sooner than anyone realised.

Sorry I really don’t get the relevance.

Are you saying our political leaders will wake up when a similar sized economy gets into debt related trouble? because if so I don’t share your optimism

Not my main point. I'm mentionng another country with a larger debt issue than ours which may come to a head sooner. If that helps to wake people up then good.

surrey_commuter said:

so the BofE has increased QE to £50bn a month for the next four months
HMG is raising £60bn a month for the next four months

so it is deemed ridiculous for the Bof E to directly buy gilts so it takes an equivalent sum out of the market so the people it just bought off can buy back from the Govt

now what if the emperor has no clothes and the above is just total bow locks?

surrey_commuter said:

TheBigBean said:

surrey_commuter said:

so the BofE has increased QE to £50bn a month for the next four months
HMG is raising £60bn a month for the next four months

so it is deemed ridiculous for the Bof E to directly buy gilts so it takes an equivalent sum out of the market so the people it just bought off can buy back from the Govt

now what if the emperor has no clothes and the above is just total bow locks?

Does this mean you have finalled acknowledged that the BoE owns a lot of the government's debt on behalf of the treasury?

I have never denied that.

If this was in the private sector it would be called a scam

surrey_commuter said:

That is a colossal gamble on something that is “probably ok”

surrey_commuter said:

rjsterry said:

surrey_commuter said:

That is a colossal gamble on something that is “probably ok”

And the alternatives at this point?

The alternative was not to have debt over 80% of GDP when the next black swan flapped into view.

surrey_commuter said:

rjsterry said:

surrey_commuter said:

That is a colossal gamble on something that is “probably ok”

And the alternatives at this point?

The alternative was not to have debt over 80% of GDP when the next black swan flapped into view.

rjsterry said:

surrey_commuter said:

rjsterry said:

surrey_commuter said:

rjsterry said:

surrey_commuter said:

That is a colossal gamble on something that is “probably ok”

And the alternatives at this point?

The alternative was not to have debt over 80% of GDP when the next black swan flapped into view.

There were only 6 words and you ignored 3 of them. At *this point* what alternative do you suggest.

The debate we are having is about whether continuously running a deficit is sustainable.

Your question, as a stand-alone, makes no sense as it presupposes I think the Govt’s response is wrong, therefore I attempted to answer it in the context of the existing debate.

I think we were talking about the BoE's latest scheme. Your words were "that's a colossal gamble on something that is probably OK." It would have been lovely if we didn't have so much debt when Covid-19 kicked off, but we did. Wishing it wasn't so seems a bit futile.

surrey_commuter said:

rjsterry said:

surrey_commuter said:

rjsterry said:

surrey_commuter said:

rjsterry said:

surrey_commuter said:

That is a colossal gamble on something that is “probably ok”

And the alternatives at this point?

The alternative was not to have debt over 80% of GDP when the next black swan flapped into view.

There were only 6 words and you ignored 3 of them. At *this point* what alternative do you suggest.

The debate we are having is about whether continuously running a deficit is sustainable.

Your question, as a stand-alone, makes no sense as it presupposes I think the Govt’s response is wrong, therefore I attempted to answer it in the context of the existing debate.

I think we were talking about the BoE's latest scheme. Your words were "that's a colossal gamble on something that is probably OK." It would have been lovely if we didn't have so much debt when Covid-19 kicked off, but we did. Wishing it wasn't so seems a bit futile.

Our whole debate is over debt levels and if there is an end point what it looks like. Rick believes we are way off unsustainable levels I disagree and think that recent events are warning signs. Rick believes that we will see the end coming and mitigate accordingly, I believe by the time the politicians accept the inevitable it will be far too late.

TBB thinks it is good that the BofE buys up lots of our debt, I think that it is an accounting sleight of hand that covers up that we would struggle to sell that volume of gilts.

The debate is more about how much debt we have when the next black swan hits, this makes our current situation relevant and not to ignore on the grounds it is futile.

rick_chasey said:

Hey SC how do you explain the post WW2 recovery in the US?

Given it was more indebted proportionally than it has ever been before or sense immediately after?