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Thread: Bank of England, Aug 2008: 5% chance of economic contraction greater than 1.5%

  1. #1
    Politics.ie Member cyberianpan's Avatar
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    Default Bank of England, Aug 2008: 5% chance of economic contraction greater than 1.5%

    A confession has to be part of your new life.
    Ludwig Wittgenstein
    So the Bank of England are being welcomely frank:

    We can't predict recession, says Bank of England deputy governor Charles Bean - Telegraph
    Charlie Bean has admitted that the Bank of England failed to seen the recession coming and said people should not expect to be able to predict the timing and scale of such events with any "precision".
    Yet are the public ?

    People who say "I saw it coming" are noisy these days - and are accorded unduly high attention due to an analogue of "[ame="http://en.wikipedia.org/wiki/Survivorship_bias"]Survivorship bias - Wikipedia, the free encyclopedia[/ame]"

    Also a lot of people seem to think "the government should have seen it coming"... yet it is clear that recessions are not widely forseeable

    The Russian government is one of the few (only?) governments I know of that promises to control the weather... it is not time for the public to stop expecting politicians to have major infleunce over the economy ?


    cYp
    "Yawn , am I alive yet ?"

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    Politics.ie Member Squire Allworthy's Avatar
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    I think the collapse in property values was very easy to foresee, The numbers only made sense if you assumed ever increasing property values. Price were rising well ahead of peoples earnings etc.

    It is now a lot more difficult to predict the future than it was.

    • Will we have higher rates of inflation and if so when?
    • Will there be a double dip?
    • Will current policies fuel bubbles in commodities and when will that unwind?
    • How will the problems of currency values be resolved?

    Governments everywhere are up to their necks in market manipulation, so economic outcomes may be due to political imperatives.

    I am going with continued low interest rates, slow recovery and rising inflation several years out. Commodities remaining volatile. points to watch are increases in base rate as these will have a dramatic effect of investment decisions and signs of increasing money supply. As for the Euro no member state will be allowed to default so busy times in the ECB so value against Sterling and the dollar likely to ease with time.

    10 years out China will be the worlds largest economy and several other countries such as Brazil will be much more prominent. Europe and the US are in relative decline and I see little to suggest that that trend can be turned.

  3. #3

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    The media went into overdrive yesterday about the 0.8% QoQ growth or 2.5% yoy growth in GDP. They failed to mention that real inflation is running at near 5%, that the GDP deflator is a very generous 1.67% and that government expenditure and quantitative easing has happened in the meantime.

    Remove them variables and the real economy contracted further.
    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

  4. #4
    Politics.ie Member Asparagus's Avatar
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    Quote Originally Posted by cyberianpan View Post
    So the Bank of England are being welcomely frank:

    We can't predict recession, says Bank of England deputy governor Charles Bean - Telegraph


    Yet are the public ?

    People who say "I saw it coming" are noisy these days - and are accorded unduly high attention due to an analogue of "Survivorship bias - Wikipedia, the free encyclopedia"

    Also a lot of people seem to think "the government should have seen it coming"... yet it is clear that recessions are not widely forseeable

    The Russian government is one of the few (only?) governments I know of that promises to control the weather... it is not time for the public to stop expecting politicians to have major infleunce over the economy ?


    cYp
    There's none as blind as those that will not see.

    Death, Taxes and Economic Cycles - you might not know exactly when they are coming but you can broadly predict them.

    Politicians entire political lives are spent inside one cycle - they think they have control over booms and busts but in truth they will justmake things worse if they try to interfere.

    By the way - the next global recession will hit in the decade around late 2040 early 2050
    ANGER IS A POLICY, GET OFF YOUR KNEES

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