Community Views : What’s on the boards today….20th Dec 2010

20th December 2010

The Daily Telegraph

"Banks should offer customers two types of deposit account, one with a blanket guarantee that pays little interest and one that leaves savers exposed to losses, according to the terms of fundamental reform proposed by Policy Exchange, a think-tank."

lordbarnett comments: "Banks should not be allowed to operate unless they can cover clients money, remember these people are gambling with your money in the hope of making a large profit for themselves, hats why they offer you a piss poor return on your savings, remember the old days when a building society dealt with nothing but property? then they "Branched" out into retail banking and thats when the brown stuff hit the fan? the taxpayer should not be picking up the bill for any failed business, the whole banking industry needs overhauling, but you know what? it wont be, and years down the line it will happen again."

City Wire

"Will 2011 see an end to the emerging markets party?"

The Daily Telegraph

"Financial advisers fear a crash could come soon as income-seeking investors flood into emerging market bond funds, despite warnings from the Bank of England that this may be a bubble about burst."

CNN Money

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 There is plenty of discussion on inflation and interest rates:

The Daily Telegraph

"Recent news about inflation has all been in one direction – up. As a result, those who had been warning about the inflation danger have been crowing. And those who had been downplaying it – from the Bank of England to yours truly – have had an uncomfortable time. Shouldn't the second group just admit they were wrong and shut up?"

andrewx says: "QE IS INFLATION! You can choose to measure inflation the standard way that economists measure it (the same economists who claimed it would bring economic stability), and you can choose to ignore items like food and energy, but if you want to really understand finance, you need to look at a much bigger picture than just an economic statistic called CPI."

The Guardian

"Inflation isn't a worry – it's a sign of catastrophe averted. At the moment, rising prices can be largely explained by the devaluation of the pound and rising VAT. There has been little sign of wage inflation – or, thankfully, deflation."

bawlee writes: "Outside the circles of certain bankers and senior executives, there is precious little sign of the kind of wage inflation that caused Britain so much grief in the past. Of course, you're an economist, so you won't care what this means for the average Joe on the street. Prices of essentials are going up, fuel prices are at a record high, very few people are getting pay rises, more are going to lose their jobs. Who cares that the rich ones who got us into this mess are getting huge pay rises, just so long as wages overall aren't going up, eh? Recent economics history provides answers to the consequences of "damaging" wage inflation. But have you got anything that tells us what happens when the poor get poorer and struggle to pay for essentials whilst the rich get richer? Surely you were tought this when you studied economics? Btw, have you paid back your student loan yet?"

The Daily Telegraph

"In the latest blow to the Bank, the CBI warned that higher than projected price rises will force policymakers to start raising interest rates in the spring to curb the threat to the economy."

deptofcuts says: "Tell us something we dont already know…This is just preparation for the ground war. why wait till spring-? just get on with it!!"

The Independent

"The British economy will escape a "double dip" next year, but households face a tight squeeze on living standards from higher-than-expected inflation, rising interest rates and tax rises, according to forecasts from a leading employers' organisation."

ebbi says: "what double dip recession ??? the banks and bankers seem to be doing extremely well, as far as the nation is concerned , well ,unfortunately the government is useless and powerless to do anything other than cuts cuts and more cuts to make sure there will be more hardship and misery."

The Adam Smith Institute

"For the last 12 months inflation has been above target, and consistently seems to have been higher than expected. This has been accepted on the basis that the Bank of England's medium term forecasts have shown inflation falling to more tolerable levels. We are told each month that high inflation "will be temporary", that the causes were just momentary changes in supply, and to rejoice that we are avoiding deflation. Yet, a long run trend seems to be forming."

Peter says: "All very true. One should just add that another
damaging effect of inflation is that it allows government to grow by feeding off the hidden tax that is inflation. When half someone's savings disappear, the value hasn't gone – it's just been transferred to the people printing up the money ie the government."

City Wire

"The CBI has warned the Bank of England (BoE) will have to raise interest rates in the spring in order to bring inflation under control."

Mark Camden-Clarke comments: "I have stated for many many months that an increase in interest rate will NOT happen until June 2012 when it will raise the rate to 1.50% simply for the reason stated by Paul Scott, they need to ensure that UK Plc is on solid foundations before increasing rates as a rate rise on loose foundations will push us back into recession much more than we have been up until now"

The Motley Fool

"5 Shares to Secure Your Financial Future"

CNN Money

"10 Best Stocks for 2011"

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