What sounds worse, interest rates went up 40% today or interest rates rose by one half of one per cent today ? Both statements are accurate yet the first is the most sensational in the world of fear. It is fear that is the forerunner of crisis when bad decisions are made as we all make off to the hills.
Add to the headline that the dark nasty recession we are about to enter is something that we will suffer with for the next 500 days. That number of days sounds less burdensome that the Bank of England announce till the end of the year 2023. All in all as headlined ‘ It’s the way you tell them ‘, that famous strap line of Irish comedian Frank Carson ( deceased).
The interest rates are increasing from their 400 year lows to curb inflation yet viewed as any other good as money is we are simply stoking the fire of fear and recession. Any fool could have told you that the more money that is printed the less value it holds ( think of abundant toilet paper ) and in time then it becomes worth less. That’s exactly what’s happened, the Government printed more toilet paper ( QE) flushed through the coffers of Banks and repackaged to create higher asset values in property, share prices and more money chasing fewer goods. The Party can’t go on badly managed and we don’t all have to hibernate for 500 days as the balloons deflate.
Rather than increase interest rates and make life harder surely there is a better way to tell them ? I ask the question only because having seen boom bust scenarios over many cycles we know one thing. Nothing lasts forever and unless asset prices are in relative relationship with peoples incomes the outcome will be the dark days called recession. High House prices can be avoided by creating more houses or a new ownership model. Building these houses will create employment and getting rid of restrictive planning process will speed up delivery. High salaries are to embrace but paying soccer players and CEO Directors fortunes is not the way to sell them.
Madness comes in many forms and whoever is the next Prime Minister someone will have to tackle this economic episode quickly. What doesn’t make sense is that following todays interest rate increase the pound against other currencies fell and the stock market rose higher. One thing for sure speak negative expect negative , speak positive and see positive. It’s the way you tell them for never before have the opportunities been so much there with technology , climate issues , new power forms and new foods , new forms of transportation and new housing types and models that make the next 500 days really exciting and wake up to not hibernate in the fathoms of fear.
It’s the way I tell it.
qbitblogger 