From veteran Independent Financial Adviser Alan Steel on George Kerevan’s warning of approaching interest rate rises
George that’s all very well, but I have to laugh when I read that we should be afraid of rising interest rates or inflation etc.
Four years ago at a lunch at Edinburgh we listened to the great and the good going on about the ridiculous QE levels which imminently would lead to rampant inflation. It never happened.
Now we should be scared of rising interest rates. Janet Yellen [chair of the US Federal Reserve] is no fool, and neither are the other G20 central bankers (who incidentally are all new post financial crisis). Can’t see her raising rates in the summer more than 0.25 per cent. A 0.25 per cent rise in rates in the 1970s and 80s wouldn’t have been noticed.
I’m part of the generation that coped with 26 per cent inflation in 1975/76, an average 14 per cent inflation in the 1970s into the 80s, a mortgage rate of 16 per cent in the late 1980s, double digit short term savings rates – and survived the UK going cap in hand to get bailed out by the IMF (or was it MFI?). That was over 40 years ago.
Money is an illusion. It was invented by humans. It doesn’t grow on trees. So what is debt or what is “real” money? And what would we prefer? High inflation and interest rates, or low rates and benign deflation?
Never underestimate the ability of humans to get things wrong and then fix them. Me? I still think low rates will survive and that QE will keep the recent equity bull market to keep going for a good few years yet.
From Linn audio systems founder and entrepreneur Ivor Tiefenbrun on Bill’s blog covering Scotland’s “severe” and “extreme” poverty statistics:
Do these figures take the black economy into account?
Are they worse that other places in the UK?
Is the position getting better or worse?
Is there not a better answer than more tax spend and welfare – or have you gone over?
(Bill’s explanatory and clarifying addendum: No.)