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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (6667)	2/1/2004 1:01:15 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

Job losses in the US are depressionary (a bit different from deflationary at this stage), but only after the credit to finance consumption is removed. As long as consumer borrowing continues unabated, it's quite inflationary. In the meantime given that those jobs are going to Asia, it is highly stimulative there, with enormous inflationary feedback loops to the whole planet, which is a point you absolutely do not see, despite the fact I've posted endless evidence of it. Other than Canada (I'm out of that currency now), I think the US Fed is about the only one left on this rate nonsense too: BBC News January 30, 2004 Bank expected to up interest rate The interest rate could go up in February The Bank of England will raise interest rates this week, economists predict. With the UK economy growing in strength and consumer spending continuing, the bank is expected to raise the base rate by 0.25% to 4% on Thursday. The rise - the first since the 0.25% increase in November - would be another attempt by the bank to slow down seemingly ever-increasing house prices. Some economists now believe the Bank of England will raise interest rates on an almost month by month basis in 2004. Economic optimism They point to continuing official reports showing that the UK economy is expanding quickly, such as the Office for National Statistics (ONS) reporting that Britain's Gross Domestic Product expanded at its fastest rate in almost three years during the final three months of 2003 - up by 0.9%. The ONS also recently revealed that high street sales in December grew at their highest rate since May 2002. Philip Shaw of investment bank Investec said an interest rate rise in February could be the first of several. "A buoyant economy and a helpful background for the UK consumer should mean a continued steady stream of rate increases over the next year or so," he said. Record spending on credit cards Britons currently owe a total of £52.92bn on their credit cards Shoppers spent a record £11.56bn ($20.6bn) on their credit cards in November, official figures show. Despite a rise in UK interest rates in the same month, the figure was well up on November 2002's total of £10.14bn. The UK's increased dependency on credit cards has led to increased conern over personal bankruptcies. Separately, Bank of England figures reveal that new mortgage lending fell to £8.6bn in November. That is a decline from £9.5bn the month before, confirming suspicions that Britain's housing market is on course to slow down during 2004. Rates to rise? Consumers now owe a collective total of £52.92bn on credit cards. The UK central bank raised interest rates by a quarter-point in November - from a 48-year low of 3.5% - largely because it was concerned that debt and house prices were rising too fast. The combination of rising debts and rising interest rates has led some experts to warn that personal bankruptcies will also rise. However, the latest figures show that, while borrowing is still on the rise, more repayments were also being made. The Bank's Monetary Policy Committee is due to hold its first interest rate meeting of the year next week, but is widely expected to leave borrowing costs unchanged. However, many analysts believe a further rise in the cost of borrowing is likely, possibly as early as February.