Bitcoin Forum

Moody's said it had acted to downgrade Britain for the first time because of “continuing weakness in the UK's medium-term growth outlook”, the risk that the Government will fail to hit its targets for reducing the deficit and the UK's “high and rising debt burden”.

QE may need to be raised by £175bn, says BoE's David Miles
The Bank of England has a case for restarting its asset purchase programme, and may need to increase it by up to £175bn if the economy is running substantially below capacity, a senior policymaker has said.

Yeah, we will all die. Hehe. Earlier or later.

Bitcoin is never going to replace the £.

we are among many other large countries in the same boat

Yes, the Titanic   unsinkable.

Germany and the UK will be the only countries left standing!

If they want a rematch...lets have it!
(Only joking German friends  :) )

The UK has come through two World Wars and survived.
 
I love Bitcoin, but man does it attract some crazy people  :)

Printing money is the way out of this recession both for the US and the Uk. The Us is not in a particularly good place either.

But the Us and the Uk both have a massive advantage that our debts are denominated in the currencies we print, so as long as it is done fairly slowly, over a few years, they can print as much as they like and will do so. Many countries can live easily with inflation rates as high as 20% with out chaos. Hell, Turkey used to have 100% inflation, and although it was chaotic, people still worked, lived, ate, etc.

My advice is buy Gold and Bitcoins, and Desireable property which will always be in demand. Get the biggest mortgage you can afford, and watch THAT get inflated away too!!

Lol that is a little bit sensationalistic if you ask me! The Pound will be here for a long time yet.
"George Osborne has warned there will be no let up in his plans to reduce the deficit"
Well that's a good thing isn't it? We are high in debt, at least they are sticking to plans to get us out of it.
Our credit rating has been reduced a little? Not massive news, we are among many other large countries in the same boat.
Bitcoin is never going to replace the £.
Bitcoin potentially could be a large player in digital online commerce, or simply be relegated to the grey / black market digital currency only.
A bit premature to tell everyone to stock up on Bitcoins and Gold... you can hardly buy any of life's necessities with Bitcoin in the UK yet!

It's not just the politicians who are in a muddle about the economy. Research published today reveals that only a tiny proportion of Britons understand the difference between debt and deficit – or know which one the Government is trying to reduce.

The Royal Mail pension fund will be transferred to the Government next month, in a move that paves the way for privatisation of the postal service.

Treasury officials are finalising plans which see the Royal Mail sever all responsibility for its huge pension fund, from the start of April.

The proposals, which have the backing of the Communication Workers Union, will provide the Chancellor with a £28bn windfall.

Accounting arrangements mean the £28bn of assets will show up in Treasury books immediately, while the the pension fund's £37.5bn liabilities will only show up on the books over the next 20 to 30 years.

The UK has come through two World Wars and survived.
 
I love Bitcoin, but man does it attract some crazy people  :)

Yes, and PC word processors would never replace typewriters, and email would never replace letters, digital cameras would never make film obsolete, online video would never kill off high-street video rental. Yes, very good that we have all those long-standing things still with us...

What happens to gold price if interest goes up, does it drop?

Problem is you are expecting a clever electronic etch a sketch to replace word processors. That just isnt going to happen either. Bitcoin is a lot of things, but an viable general alternative to fiat currency, it aint. Ripple otoh, way too early to say, but at least its not unthinkable.

Bitcoin has flaws... in your world the price of Bitcoin would keep inflating until only one currency remained (BTC), nobody would spend any money for fear of its value growing the following week! Why buy a car this week if its cheaper next week?

Arguably superior alternates for things are invented all the time... doesn't mean they gain mass adoption, so your list is meaningless.
Bitcoin has a big future, its just not what some dreamers let themselves believe. (In my opinion)

"George Osborne has warned there will be no let up in his plans to reduce the deficit"
Well that's a good thing isn't it? We are high in debt, at least they are sticking to plans to get us out of it.
Our credit rating has been reduced a little? Not massive news, we are among many other large countries in the same boat.

There is a train of thought that the Bank of England is quietly fostering inflation.  If it can successfully keep interest rates low it can inflate away the countries debt. 

Much as I like the idea of a federal Europe this is a good (or the main) reason that the UK never joined the single currency.

The flaw in this cunning plan will be downward pressure on average wages. With millions unemployed and underemployed workers have very little bargaining power to raise wages in line with inflation.

Debts might look less significant as essentials soar in price due to inflation but if wages don't keep up things will only get worse.

I can only see fat-cat salaries rising with or above inflation as its those who decide salaries to be paid.  The Con-Dem's will promise the middle-class (voting class) a massive tax cut to win the next election.  Just like the Tories promised to punish the scroungers (unemployed [non-voting class] for the banks casino losses before the last election.

Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.  The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £375 billion.

Since the May Inflation Report, market interest rates have risen sharply internationally and asset prices have been volatile.  In the United Kingdom, there have been further signs that a recovery is in train, although it remains weak by historical standards and a degree of slack is expected to persist for some time.  Twelve-month CPI inflation rose to 2.7% in May and is set to rise further in the near term.  Further out, inflation should fall back towards the 2% target as external price pressures fade and a revival in productivity growth curbs domestic cost pressures.

The rise in June in input prices was driven by Home Food Materials (who makes these categories up?) which soared by 7.2%. As we had not had the recent hot weather by then that leaves the wet weather of 2012 and early in 2013 to take the blame.

But on a more fundamental point if you feel that food purchases have become noticeably more expensive then at least one component of the UK inflation measuring system is agreeing with you as Home Food Materials annual inflation is now running at 14.3%.

May I present to you Lord Professor Sir Mervyn King, soon to be ex Governor of the Bank of England.

A true asset to the nation. His gold plated inflation linked multi million pound pension pot isn't enough reward for his tireless service to the people. I shall be contacting my local MP to insist on his face being on the next £10,000 note


http://aaaaargh.files.wordpress.com/2011/10/mervyn-king.jpg

What happens to gold price if interest goes up, does it drop?

The best answer is maybe.

Rising rates are deflationary for the money supply.  Historically, with gold backed money, this meant gold price would rise as people needed gold to pay the higher interest.  In modern times, however there is no such link.  One might argue gold could drop due to people needing to raise liquid capital.  But then again, one could argue that gold could rise because the large institutions shorting it would need to close out their positions to recover their collateral.

If interest rates go up every mortgage taken out in London and the South East of England since 2005 is going to go into default. It's not possible for mortgage holders to absorb exponential increases in the cost of lending when wages are at best stagnant and food prices are going up 14.3%.

Many of those mortgages are interest only with no repayment vehicle. The banks will be fucked.

someone just needs to create a new cryptocoin that will give rewards so that there is a 4% inflation indefinatly....

problem solved

It's quite possible you are joking, but I'll answer anyway because I'm in the mood:

Are you serious? I doubt this would solve anything. For example freicoin has something that has a similar effect: demurrage. It causes money to lose value over time (similar to inflation). It's slightly better than inflation because it doesn't do that by increasing the money supply and giving the newly printed money to a select few (as is done with state-enforced fiat).

The main problem with this approach is that it resembles "bad money". Noone wants to use it for storing wealth because the crap keeps losing value. Such money can only be forced on people (as we see with state-sponsored fiat money). It's highly unlikely it would be used voluntarily.

The whole "the economy must grow" mantra is a farce anyway. An economy can grow, of course, but in general it's more like a living organism: it must inhale and exhale. An inflationary currency forced on it is like injecting growth hormones at arbitrary locations of the body. It will lead to tumors and a gernerally sick condition. Inflation is a hidden tax. The parasitical governments of the world cannot tax the wealth gains in a deflationary environment and therefore need to force inflationary crap on us.

20m adults concerned about debt
More than 20 million UK adults worry about personal debt, with two-thirds blaming the cost of living for their financial troubles.

 The number of debt-ridden adults who worry about their finances has risen by 8pc since February, according to a survey by insolvency trade body R3.

One fifth of UK adults say they are "very" or "extremely" concerned about their current debts.

Worryingly, 42pc of adults said they struggled to make it to pay day, with most saying the high cost of living was to blame.

Liz Bingham, president of R3, said: “Although the economy is starting to pick up, many families are finding themselves left behind, weighed down by the cost of the day-to-day.

“There is a sizeable chunk of the population in a very precarious position. They are renting, they have no savings, and they are only able to pay off the interest on their debts without making any headway into the principal. These people have no financial buffer to cope with any increase in the cost of living.” 

Mark Carney to unveil 'pre-commitment' on interest rates

In Burnham-on-Sea in Somerset, Jack Horwood has been thinking about buying a new dishwasher. The 23-year-old, who has two business and administration qualifications and works at a national trade union, also yearns for more nights out in Bristol seeing the comedy shows.

Instead, he and his girlfriend are squirrelling away their wages to prepare for higher mortgage payments when interest rates rise. Horwood says they would probably spend £200 a month more if they knew rates would be unchanged for another two years.

On Wednesday, Mark Carney, the Bank of England’s new Governor, is expected to give Horwood, and the thousands like him across the country, just the kind of reassurance they are looking for. In a radical first for UK central bank policy making, the Canadian will unveil a “pre-commitment” on interest rates, with a pledge to keep then low for longer.

Bank of England ties interest rates to fall in unemployment

Interest rates are set to remain at a record low of 0.5pc for three more years after Mark Carney, the Bank of England’s new Governor, pledged to keep them on hold until the official unemployment rate hit 7pc.

In a radical switch to “forward guidance” for UK monetary policy, Mr Carney answered the Chancellor’s call to underpin the recovery by introducing the unemployment goal alongside its central 2pc inflation target.

The pledge was made despite a big improvement in the Bank’s outlook for the UK. It upgraded its growth forecast for this year from 1.2pc to 1.4pc and for next year from 1.7pc to 2.5pc, and Mr Carney said “a renewed recovery is now underway”.

However, he claimed that “this is exactly the time when something like this [forward guidance] is appropriate” and that the whole point of exceptional monetary stimulus was to get “the recovery going”.

Britain’s 7pc unemployment target is a mirror of the US policy, which has set a 6.5pc trigger. For unemployment in the UK to fall from its current rate of 7.8pc to 7pc, some 250,000 net jobs would have to be created today.

Some of you should start watching Ron Paul, Max Keiser, Nigel Farage and others, you will find out how we are being deceived.

Long live Bitcoin, Gold and Silver.

Britain's economic recovery is at an early stage and is still reliant on rising house prices and consumer demand, Bank of England Governor Mark Carney said in an interview on Tuesday.

"At this stage most of the growth in momentum is coming from the household sector and there's a pick-up in the housing market from quite low levels," he said in an interview with Cardiff's Western Mail newspaper while on a visit to the Welsh capital.

Earlier on Tuesday central bank data showed that mortgage approvals hit a five-year high, accompanied by a modest increase in lending to larger businesses, which Carney said was broadly where he wanted it to be at this stage in the recovery.

But he added in an advance copy of the interview published on the paper's website that he would be vigilant about any future excessive lending to households, and that he hoped to see more access to finance for start-up companies to give growth a firmer footing.

"We may not see very strong net lending figures but it's important that new businesses are getting access to credit because now we're starting to be at a point in the recovery where that should really start to happen," he said.

Britain's economy has recovered strongly since the start of the year after a lengthy period of stagnation following the deep 2008-09 recession.

But much of the growth has been helped by rising consumer spending at a time when take-home pay is still falling in real terms, raising doubts about its sustainability.

Some economists are also concerned that government schemes to encourage house purchases may lead to untenable increases in prices, though the rises are so far concentrated in London and neighbouring regions.

Carney stressed that housing transactions were still almost a third below pre-crisis levels, and that the central bank had other tools at its disposal to avoid it having to raise interest rates to tame house price rises in one part of the country.

"If there are imbalances ... in some parts of the economy, whether it's a sector such as housing or some regions, we can to a degree help lean against those so that we don't use our broadest tool, which is monetary policy, to try to attack a specific issue in a specific part of the country," he said.

In April the BoE gained powers to tweak lending rules for banks on a sector-by-sector basis, and shortly after his arrival in July, Carney committed the central bank to keep its main interest rate on hold until unemployment falls to 7 percent from its current 7.7 percent.

"We're not going to look to tighten monetary policy until we see real traction and momentum in this recovery that has been sustained for some time," Carney said on Tuesday, echoing language on monetary policy he had used the previous week.

UK Govt Bonds 10 Year Note Generic Bid Yield GUKG10:IND  3.09%

The only part I disagree with is stocking up on Bitcoins. Bitcoins are nice, but you NEED internet to use them. In the event that the UK were to collapse and inflation jumps through the roof, most people will choose to abandon paying for access to the internet over being able to buy a loaf of bread to feed their family.

Bitcoin works as long as the system at least somewhat works. Not to say it won't go on somewhere in the world, as the whole system is unlikely to break all at once (and if it were to, then all out chaos would ensue and the internet would matter little as it is), but if one of the world's superpowers were to drop into anarchy, I suspect limited internet access would be a casualty of such an event, making bitcoins quite useless in that state until such a time things normalized.

UK 10 yr Gilt over 3% again. Woop woop  :)


http://www.bloomberg.com/quote/GUKG10:IND (http://www.bloomberg.com/quote/GUKG10:IND)

3% of the £1500 billion national debt is £45 billion. About 8% of government tax revenue going towards interest. How long can the madness continue

common misconception.

you can actually transfer bitcoins without internet, if you create your own peer-to-peer network. This can work with mobile phones, wifi hotspots, medium-range communication devices, pretty much anything will work really. As long as enough people participate in a network, and as long as there are some miners on the network, it doesn't have to be the internet per se. A smart engineer might be able to create such a system with very limited resources. For example, radiowaves are very easy to use and do not need a lot of materials at all (a lot of people made their own radios during ww2 to hear the news).

The (local) collapse of the internet would only prove to be a problem to banks, and not at all to bitcoin.

Ratings agency Standard & Poor's stripped Britain of its last remaining top-notch credit rating on Monday, slashing it by two notches from AAA and warning more downgrades could follow after Britons voted to leave the European Union last week.

S&P said it was the first time it had chopped an AAA-rated sovereign credit rating by two notches in one go.

Yes, and PC word processors would never replace typewriters, and email would never replace letters, digital cameras would never make film obsolete, online video would never kill off high-street video rental. Yes, very good that we have all those long-standing things still with us...

Ratings agency Standard & Poor's stripped Britain of its last remaining top-notch credit rating on Monday, slashing it by two notches from AAA and warning more downgrades could follow after Britons voted to leave the European Union last week.

S&P said it was the first time it had chopped an AAA-rated sovereign credit rating by two notches in one go.

It's game over for the Pound Sterling.

Huge budget deficits, pyramid scheme housing market, mounting inflation, massive real unemployment, suppressed interest rates, financial repression.....

http://www.telegraph.co.uk/news/politics/georgeosborne/9889605/George-Osborne-no-let-up-in-plan-to-cut-deficit-after-AAA-downgrade.html (http://www.telegraph.co.uk/news/politics/georgeosborne/9889605/George-Osborne-no-let-up-in-plan-to-cut-deficit-after-AAA-downgrade.html)


No government has the balls or the incentive to make the reforms necessary for a recovery. Their only plan is to stick with QE. To keep the plates spinning for just a little bit longer they'll keep the Bank of England pumping ever more worthless pounds into the economy.

http://www.telegraph.co.uk/finance/economics/9886554/QE-may-need-to-be-raised-by-175bn-says-BoEs-David-Miles.html (http://www.telegraph.co.uk/finance/economics/9886554/QE-may-need-to-be-raised-by-175bn-says-BoEs-David-Miles.html)


Raising QE by £175bn would mean the Bankrupt of England controlling more than 40% of the entire government debt market. Any small bump in interest rates and the whole sorry mess will go straight down the toilet.

Be prepared! Dump your pounds and start stocking up on food, gold and bitcoins. I dread to think what the country would look like with petrol at £5 a litre.

http://static.guim.co.uk/sys-images/Guardian/Pix/pixies/2011/8/8/1312833772779/Riots-break-out-in-north--007.jpg

http://www.almostzara.com/wp-content/uploads/London-Riots-2011.jpg

It's game over for the Pound Sterling.

Huge budget deficits, pyramid scheme housing market, mounting inflation, massive real unemployment, suppressed interest rates, financial repression.....

http://www.telegraph.co.uk/news/politics/georgeosborne/9889605/George-Osborne-no-let-up-in-plan-to-cut-deficit-after-AAA-downgrade.html (http://www.telegraph.co.uk/news/politics/georgeosborne/9889605/George-Osborne-no-let-up-in-plan-to-cut-deficit-after-AAA-downgrade.html)


No government has the balls or the incentive to make the reforms necessary for a recovery. Their only plan is to stick with QE. To keep the plates spinning for just a little bit longer they'll keep the Bank of England pumping ever more worthless pounds into the economy.

http://www.telegraph.co.uk/finance/economics/9886554/QE-may-need-to-be-raised-by-175bn-says-BoEs-David-Miles.html (http://www.telegraph.co.uk/finance/economics/9886554/QE-may-need-to-be-raised-by-175bn-says-BoEs-David-Miles.html)


Raising QE by £175bn would mean the Bankrupt of England controlling more than 40% of the entire government debt market. Any small bump in interest rates and the whole sorry mess will go straight down the toilet.

Be prepared! Dump your pounds and start stocking up on food, gold and bitcoins. I dread to think what the country would look like with petrol at £5 a litre.

http://static.guim.co.uk/sys-images/Guardian/Pix/pixies/2011/8/8/1312833772779/Riots-break-out-in-north--007.jpg

http://www.almostzara.com/wp-content/uploads/London-Riots-2011.jpg

Erm...all of those things are with us.  I just wrote someone a letter the other day, with a fountain pen no less.  And I'm not joking.

£ is backed by the requirement of a 2tn gdp nation with many people paying taxes in that currency, thats quite alot of demand.    Bitcoin is not replaceable for sterling in that way, its possible they issue too much sterling and dilute their demand.   2bn a year of tax is paid by foreigners who never enter the UK, due to the amount of trading done and many companies and commodities are nothing to do with EU just reliant on the UK legal system and other factors centred in London, etc


The ratings agencies are partly political I think.  Paid by the main issuers of debt, their allegiance is to those bringing the most business and that will be USA and EU in future I think.   Especially the EU which is taking over the fiscal failures of its minor nations and issuing new debt via the ECB I think

S&P downgraded USA at one point and their CEO left abruptly afterwards, I presume it was no coincidence.    Either UK has a deficit it must reduce and run a surplus but has failed to do so, true before and after leaving EU.   Its not yet clear for either argument if leaving will make worse or better that ongoing situation  


EU downgraded

http://www.reuters.com/article/usa-bonds-eu-idUSL1N19M1S8

Bitcoin has flaws... in your world the price of Bitcoin would keep inflating until only one currency remained (BTC), nobody would spend any money for fear of its value growing the following week! Why buy a car this week if its cheaper next week?

What said above can be applied to any major world economy. So there is no worry if everybody else is the same.

UK politics is in turmoil, it's a fucking circus. People resigning left right and centre (no political pun intended), and no plans whatsoever. Chilcot report throwing a spanner in the works...

I predict <1.20 before the end of the month. UK imports way more than it exports, a weakening currency is bad.

Keep your eye on the FTSE 250, not the FTSE 100. And obviously GBP/USD.

I predict <1.20 before the end of the month. UK imports way more than it exports, a weakening currency is bad.

Keep your eye on the FTSE 250, not the FTSE 100. And obviously GBP/USD.

I predict <1.20 before the end of the month. UK imports way more than it exports, a weakening currency is bad.

Keep your eye on the FTSE 250, not the FTSE 100. And obviously GBP/USD.