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Thread: Bond markets reward UK budget austerity with low interest rates. Lesson for Ireland.

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    Default Bond markets reward UK budget austerity with low interest rates. Lesson for Ireland.

    UK interest rates have dropped to the lowest levels in a generation.http://www.cnbc.com/id/39792565 This is probably due to UK government budgetary austerity and,to a lesser extent, fears of a double dip recession brought on by austerity.

    If UK interest rates fell mainly due to budgetary austerity,the lesson for the Irish government is clear:follow suit in the Decemer budget by slaying some public spending sacred cows,such as excessive wages and gold plated pensions. Then Ireland's punitive interest rates will fall towards Germany's low rates,which alone would be enough to revive the economy.
    Last edited by patslatt; 23rd October 2010 at 07:11 PM.

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    Quote Originally Posted by patslatt View Post
    UK interest rates have dropped to the lowest levels in a generation.News Headlines This is probably due to UK government budgetary austerity and,to a lesser extent, fears of a double dip recession brought on by austerity.

    If UK interest rates fell mainly due to budgetary austerity,the lesson for the Irish government is clear:follow suit in the Decemer budget by slaying some public spending cows,such as excessive wages and gold plated pensions. Then Ireland's punitive interest rates will fall towards Germany's low rates,which alone would be enough to revive the economy.

    I noticed how UK rates have dropped.

    But they also still have their own currency and they are contemplating billions in QE to stimulate the economy.

    Ireland has not a penny for stimulus and with the dollar and sterling dropping then I can't see exports rising.

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    Politics.ie Member ocoonassa's Avatar
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    Quote Originally Posted by patslatt View Post
    follow suit in the Decemer budget by slaying some public spending cows,such as excessive wages and gold plated pensions
    In principle I would agree with you entirely, save for this [ame=http://www.youtube.com/watch?v=3pwAFohWBL4]YouTube - Six Minutes with the Renegade Economist - Michael Hudson Special...[/ame]

    I really don't think that what is described therein should be got away with by those responsible. Clearly our Government is an agency of theirs. I'd rather see a Government that has true elected reps of the people making the tough decisions.

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    Yippee! Lets live like serfs, so that the cost for borrowing for the Statist Neofeudalists drop. Where can I donate 5 pints of my blood for Anglo Irish, my life for the elite....

    Yeah the solution to our €1 Trillion debt monkey is to stamp on the face of the domestic economy forever and to borrow to ad infinitum.

    The Gilt are at there lowest level because Interest rates are at there lowest levels EVER plus QE.
    “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - Friedrich A. Hayek

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    Quote Originally Posted by patslatt View Post
    UK interest rates have dropped to the lowest levels in a generation.News Headlines This is probably due to UK government budgetary austerity and,to a lesser extent, fears of a double dip recession brought on by austerity.

    If UK interest rates fell mainly due to budgetary austerity,the lesson for the Irish government is clear:follow suit in the Decemer budget by slaying some public spending cows,such as excessive wages and gold plated pensions. Then Ireland's punitive interest rates will fall towards Germany's low rates,which alone would be enough to revive the economy.
    You talk about countries like they were trained monkeys for the "markets." If we are good were are rewarded, if we are naughty, we are punished. But, I suppose, thats the reality of capitalism.

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    Quote Originally Posted by Breadan O'Connor View Post
    But they also still have their own currency and they are contemplating billions in QE to stimulate the economy.
    If anything that would cause rates to rise, due to the inflation and currency depreciation risk.

    No. The fact is in one fell swoop, the UK has done more than we have arsed around thinking about doing for the last two years now. Time to get the finger out, I think.

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    Latest M4 money supply figures released this week showed an unexpected decrease.
    “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - Friedrich A. Hayek

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    Quote Originally Posted by orbit View Post
    If anything that would cause rates to rise, due to the inflation and currency depreciation risk.

    No. The fact is in one fell swoop, the UK has done more than we have arsed around thinking about doing for the last two years now. Time to get the finger out, I think.
    So why is the 2 year treasury note in the States at a record low? The 10 year bond is flirting with a record low too.
    “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - Friedrich A. Hayek

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    Quote Originally Posted by Cassandra Syndrome View Post
    So why is the 2 year treasury note in the States at a record low? The 10 year bond is flirting with a record low too.
    What have US treasury notes got to do with the UK?

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    Quote Originally Posted by orbit View Post
    What have US treasury notes got to do with the UK?
    they're both engaged in QE
    “'retail deposit flight, I don't see that as a great danger. Ireland is an island” - Brian Lenihan - to hundreds of international investors

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