BBC Analysis - How Low Can Rates Go?

[HelpingHands]

Five minutes until we hear.  Will 'Carney Do Nothing' do something?  I'm not sure he will.

[HelpingHands]

Gold just spiked.   Rates cut to 0.25%

[HelpingHands]

More QE.

Gold at £1023 but the forum charts not caught up.

[HelpingHands]

Gold £1030

[richo]

Yep, more QE....

[Paul]

£1038 now - up up up 

 

[Roy]

HGM have little stock left?

[Paul]

they had loads of gold earlier today their spot price is still £1016 though pay be the reason

[Vern]

Probably lower than this catalytic converter precious metal hunter

[Daz147]

4 hours ago, Paul said:

they had loads of gold earlier today their spot price is still £1016 though pay be the reason

HGM must be busy, they still have not updated their spot price even at close of business.  The only gold they have left is half sov's for what is effectively spot at £122.

[MikeOxlong]

On 8/3/2016 at 18:21, KDave said:

If you save using shiny metal as the vehicle to transfer your purchasing power into the future then central bank policy is directly helping you. Cheers mark bring on the 0.25% interest rate, higher inflation and roll on the recession we are in/due. 

Not yet! Im not ready!

[HelpingHands]

http://www.telegraph.co.uk/opinion/2016/08/05/dont-blame-brexit-for-this-rate-cut-blame-project-fear/

[shemyaza]

Metal floats on top of Money Supply.

[richo]

The longer interest rates stay at historical lows, the nastier the shock will be when they eventually normalise. It's why the can keeps been kicked, and will keep been.

On a side note, my bank sent me a text 7 minutes after the rate decision to say savings rates were reducing. And, next day followed up with a 0.4% cut in the ISA rate. And one wonders why the banks have lost so much trust. I'll bet the mortgage pass on isn't 0.4%. 

[HawkHybrid]

8 hours ago, richo said:

I'll bet the mortgage pass on isn't 0.4%. 

 

even if it was all passed on, why should sensible savers be

penalised in favour of reckless spending by those in debt.

 

HH

[richo]

Lost a lot of respect for my bank who were always regarded as pioneering and leading in customer service, enticed on to an ISA rate at 3% around 3 years back, steadily chipped away, or 'streamlined' to 1.3% with no base rate changes, then now 0.9% after the last change. I bet there isn't anywhere better to go either. It's no wonder the banks have lost so much goodwill really. What's the point holding money as an investment. It's safe, but the return is non existent.

[KDave]

I hold a bit of cash for emergencies, some in HTB isas and such, but ultimately cash is a poor investment. At best you can expect a consistency of purchasing power over the short/medium term if you can find interest rates to beat real inflation (unlikely due to printy printy central banks) and anything long term you can historically speaking expect to lose significant amounts of purchasing power. Even short/medium terms there are risks from shocks such as seen with brexit, the losses compounded by the BoE actions to lower rates and print. Ultimately its all downhill for currency but we need to keep some to function - its always good to have some in an emergency or where the odds are in ones favor and the end goal is not too far off, such as is the case with my HTB Isas. I hate holding cash but there it is. 

[vand]

On 06/08/2016 at 09:09, richo said:

The longer interest rates stay at historical lows, the nastier the shock will be when they eventually normalise. It's why the can keeps been kicked, and will keep been.

They can NEVER normalize. Rate lowering and bringing forward future consumption is a one-way street. You know why growth is still anaemic despite the record low rates? It's because all the future growth that can be brought forward already has! The "future consumption" has been exhausted and we have now arrived in that future where all that future consumption was consumed yesterday.  All we have now to show for it is a mountain of debt that is unmanageable at anything above zero %.

[sovereignsteve]

On 06/08/2016 at 18:00, richo said:

Lost a lot of respect for my bank

really, you ever had any respect for your bank?

[richo]

2 minutes ago, sovereignsteve said:

really, you ever had any respect for your bank?

Unfortunately they have been allowed to engineer positions on savings where a base rate cut of .25% means a savings cut of .5%. Of course, if ever rates go back up, which you almost doubt now since the shock would be so severe, then I bet the increase on savings is at best like for like, if not under. 

[shemyaza]

Bank of Japan hinting at Raising Interest Rates with more Aggressive Quantitive Easing.That is back to Window Guidance 1949-1988 if they do that, its back to old school economics.