Inflation

[Beach Hut]

given the genuinly international dimension of borrowing and saving now, i think we should start to think that this is the new normal. money flows need to flow somewhere, theres an awful lot of surplus cash around (yes, even in the UK after a recession), so credit is cheap.

I can see that but where is this surplus cash ? Clearly not with banks as they will not lend or are they holding on to it to load their balance sheets....

 

[Herr Tubthumper]

given the genuinly international dimension of borrowing and saving now, i think we should start to think that this is the new normal. money flows need to flow somewhere, theres an awful lot of surplus cash around (yes, even in the UK after a recession), so credit is cheap.

Surplus cash? I thought money was being parked these days.

 

[beorhthelm]

...Clearly not with banks as they will not lend or are they holding on to it to load their balance sheets....

yep. or to be more precise they are being told they must, to make them more resilient to future "shock". legislators are at the same time telling banks to lend and to hold more cash. hmmm.

but also companies (collectivly) are sitting on large cash piles and consider internationally banks havent necessarily been troubled.

 

[Beach Hut]

but also companies (collectivly) are sitting on large cash piles and consider internationally banks havent necessarily been troubled.

That is perfectly true as one company I know has moved €450m positive during this recession

 

[Beach Hut]

Surplus cash? I thought money was being parked these days.

What do you mean by parked, is that the same as just holding on to it.....

 

[CorgiRegisteredFriend]

Although bank interest rate will rise it will be gradual and in small increments. Won't hit the 5% level for many years.

 

[Captain Sensible]

What do you mean by parked, is that the same as just holding on to it.....

Does this not mean they hold their money in the safe havens like the USD or CHF? And don't risk it.

 

[Eeyore]

In this event, low inflation seems to be a bad indicator. Prices are clearly falling, which I think may indicate a slow in demand.