Bank of England – Page 8 – Infinite Unknown

Markets face major crash if US bail-out plan collapses

September 27, 2008 by Infinite

There will be a depression anyway, but if the bailout “succeeds” there will be a complete meltdown in the not too distant future. Again the elite is pressing the fear button.
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World markets depend on Paulson’s plan Photo: GETTY

London shares could lose a fifth of their value and the money market faces collapse unless US politicians succeed with their financial bail-out plan, it has been warned.

A leading investor predicted that the FTSE 100 could drop by as much as 1,000 points on Monday if Treasury Secretary Hank Paulson’s $700bn (£380bn) plan fails. Such a fall would come close to matching the stock market crash of 1987.

The warning came as markets lurched their way to the end of another fraught week amid fears that the White House rescue operation could be derailed in Congress by conservative Republicans.

Fed, ECB, Bank of Japan Lead Global Plan to Pump $247 Billion Into Markets

September 18, 2008 by Infinite

Sept. 18 (Bloomberg) — The Federal Reserve almost quadrupled the amount of dollars central banks can auction around the world to $247 billion in a coordinated bid to ease the worst crisis facing financial markets since the 1920s.

The Fed increased the amount of dollars that the European Central Bank, the Bank of Japan and other counterparts can offer from $67 billion “to address the continued elevated pressures in U.S. dollar short-term funding markets.” The Bank of England, the Bank of Canada and the Swiss National Bank also participated.

Policy makers have struggled to revive confidence in markets this week as investors stockpiled money on concern more financial institutions would fail after the bankruptcy of Lehman Brothers Holdings Inc. and the U.S. government bailout of American International Group Inc. The cost to hedge against losses on U.S. government debt climbed to a record yesterday.

“There’s a complete lack of faith in the markets,” said Jim O’Neill, chief economist at Goldman Sachs Group Inc. in London. “There’s a lot of cash hoarding and people losing trust in banks, so the central banks are acting to relieve that. This might not be the last time they have to act.”

Jobless set to top two million as the UK economy heads for meltdown

September 14, 2008 by Infinite

A JobCentre office

The true scale of the jobs disaster facing Britain is revealed today as experts issue dire warnings that up to half a million workers will lose their jobs over the next two years, as companies cut costs and scale back investment plans to survive the economic downturn.

Official figures are widely expected to reveal this week that the number of people out of work and claiming benefits increased for a seventh successive month in August.

Finance companies based in London’s Square Mile have already laid off thousands of workers since the US mortgage crisis unleashed chaos in the world’s markets last summer; and the 5,000 UK-based staff at crisis-hit investment bank Lehman Brothers are awaiting news this weekend about how many of them will be made redundant.

Tens of thousands to be laid off every week as UK falls into recession

September 11, 2008 by Infinite

MPC member warns of ‘horrible surprise’
Gloomy assessment sends London shares falling

Tens of thousands of people could be laid off every week in the run-up to Christmas as the UK economy falls into recession, David Blanchflower of the Bank of England’s monetary policy committee warned today.

Blanchflower told MPs to expect “a large increase in unemployment”, and warned that a “horrible surprise” could be just around the corner. The gloomy assessment sent shares in London falling, and also weakened sterling yet further against the dollar.

Blanchflower, who has repeatedly tried and failed in recent months to persuade the MPC to cut interest rates, predicted that the unemployment count will rise by 60,000 a month for several months in a row, probably starting in October.

“I believe we will see a deeper economic decline than other people think,” Blanchflower told the Treasury select committee, ruling out the possibility that the UK GDP will not shrink.

Huge rise in the price of food

September 6, 2008 by Infinite

Supermarket food prices are soaring, with the price of key items rising at several times the rate of inflation, figures show.

The rising cost of the shopping basket

The price of fresh food has risen by 12 per cent since the start of the year, while meat and fish now costs 23 per cent more on average. Meanwhile chicken and ham have risen by 42 and 45 per cent since January, placing the former staples out of many consumers’ price range.

The rises in the price of both basic pasta and basmati rice have also smashed through the 40 per cent barrier.

Even so-called slump proof tinned foods have registered a price rise of 15 per cent – more than three times the Government’s official inflation rate of 4.4 per cent.

The Disconnect Between Supply and Demand in Gold & Silver Markets

August 19, 2008 by Infinite

There is a huge demand for both gold and silver right now in India and North America. North American shops are completely bare of silver. Indian shops are empty of both silver and gold. Even the Indian banks don’t have any gold or silver. The big western bullion banks, based in New York and London, control both the gold and silver trade. Reports from India are that they are refusing to extend Indian bank lines of credit, forcing the small banks to deliver to clients, collect money, and pay down lines of credit, before being allowed to take delivery of another gold or silver shipment. This is very abnormal. Normally, if a banker’s bank knows that its customer-bank has firm orders, it would extend the smaller bank a bigger line of credit. Not now.

By refusing to extend lines of credit, the big bullion banks are essentially rationing a very thin supply. Most physical silver, for example, is being reserved for industrial and fabrication use, and investors are simply not able to get any, without waiting for months. Investor oriented shops are bare, and the U.S. Mint has suspended coin production. All available supply seems to be reserved for industrial users. You cannot substitute paper claims for real silver, in industrial use, because paper doesn’t have the physical properties of silver. So, it seems that all available supply is being diverted to industrial users, and, to a lesser extent, aside from the squeeze on lines of credit, also to jewelry fabricators. But, investors are left out in the cold. They can accept paper claims, or nothing. The most interesting mistake that the manipulators have made is in not supplying the U.S. Mint, which has run out of silver, proving that there is a severe shortage.

Sterling slumps to 12-year low

August 15, 2008 by Infinite

The pound has fallen to its weakest level in 12 years after the Bank of England signalled that it is no longer prepared to raise interest rates.

Sterling dipped sharply against both the dollar and the euro after the Bank used its quarterly Inflation Report to slash its economic growth forecasts and predicted that inflation will dip back towards its 2pc target over the next two years.

Inflation surges to 16-year high

August 13, 2008 by Infinite

Inflation soared to 4.4% last month – the biggest jump in the cost of living in more than 16 years – on the back of rocketing food prices, clouding hopes that the Bank of England will move to cut interest rates in coming months.

The Office for National Statistics said today that the consumer prices index (CPI), the government’s preferred inflation measure, leapt to an annual rate of 4.4%, up from 3.8% in June. This beat analysts’ expectations of inflation of 4.1%, and is more than double the government’s target.

This is the highest level recorded since the CPI series began in January 1997. According to analysts, inflation was last higher in April 1992 when it hit 4.7%.

The main driver was hefty rises in food prices, particularly bacon, ham and poultry. The cost of meat on the year was up a record 13.7%. Bread and cereal prices also shot up and fuel inflation was at an all-time high as well.

Banks: Plans to Seek Secret Emergency Funding

July 22, 2008 by Infinite

So in a free market it is justifiable to keep some “potentially situations” secret!?!? Hmmhh.
Secret from whom?

“The main case for an exception would be if disclosure could panic investors and lead to fears for a bank’s solvency, the regulator said.” Investors in the U.K. have all the right to panic.

“Under certain circumstances, immediate disclosure would still be required.”
These “certain circumstances” will occur when it is too late to panic!
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The City watchdog has laid out plans to allow banks to tap the Bank of England for emergency funding without informing the market, in a move which might avoid a repeat of the run on the bank which led to the collapse of Northern Rock.

Under the European Union’s market abuse directive, regulated firms have to disclose price sensitive information. However, the Financial Services Authority yesterday said there were potentially situations where banks would be allowed to keep it secret if they had applied to the Bank.

The main case for an exception would be if disclosure could panic investors and lead to fears for a bank’s solvency, the regulator said. The FSA laid out a series of proposals in a consultation document. It invited industry groups to respond by September 30.

Status Report on the Collapse of the U.S. Economy

July 17, 2008July 16, 2008 by Infinite

“But, realistically, all ordinary people can do today is try to survive, perhaps by working with friends and neighbors in planting food and living within the underground economy. At least people might not then have to starve to death, because hard as it is to believe that “it could happen here,” widespread famine in the U.S. seems a real possibility over the next several years. Nations take such risks when they allow capitalist agribusiness to destroy local agriculture.”

With the economic news of the week of July 14-the continuing crisis among mortgage lenders, the onset of bank failures, the announced downsizing of General Motors, the slide of the Dow-Jones below 11,000-we are seeing the ongoing collapse of the U.S. economy.

Even the super-rich are becoming nervous as cries for an emergency suspension of short selling ring out.

What is really taking place, however, is that the producing economy of working men and women is being crushed by the overall debt burden on households, businesses, and governments that could reach $70 trillion by 2010. The financial system, including mortgage giants Fannie Mae and Freddie Mac, is bankrupt, as the debts it is based on cannot be repaid.

George Soros: rocketing oil price is a bubble

May 27, 2008 by Infinite

Speculators are largely responsible for driving crude prices to their peaks in recent weeks and the record oil price now looks like a bubble, George Soros has warned.

The billionaire investor’s comments came only days after the oil price soared to a record high of $135 a barrel amid speculation that crude could soon be catapulted towards the $200 mark.

In an interview with The Daily Telegraph, Mr Soros said that although the weak dollar, ebbing Middle Eastern supply and record Chinese demand could explain some of the increase in energy prices, the crude oil market had been significantly affected by speculation.

Telegraph TV: George Soros on oil prices

“Speculation… is increasingly affecting the price,” he said. “The price has this parabolic shape which is characteristic of bubbles,” he said.

‘We face the most serious recession of our lifetime’

The comments are significant, not only because Mr Soros is the world’s most prominent hedge fund investor but also because many experts have claimed speculation is only a minor factor affecting crude prices.

Oil prices stalled on Friday after their biggest one-day jump since the first Gulf War earlier in the week.

At just over $130 a barrel, the price has doubled in around a year, causing misery for motorists and businesses.

However, Mr Soros warned that the oil bubble would not burst until both the US and Britain were in recession, after which prices could fall dramatically.

Bank bail-outs to be kept secret

April 30, 2008 by Infinite

The Bank of England has imposed a permanent news blackout on its £50bn-plus plan to ease the credit crunch.

Ferocious and unprecedented secrecy means taxpayers will never know the names of the banks that have been supported through the special liquidity scheme, which was unveiled by Bank Governor Mervyn King last week.

Requests under the Freedom of Information Act are to be denied. Details will be kept secret even after 30 years – the period after which all but the most sensitive state documents are released.

Any Bank of England employee leaking the names of institutions involved will face court action for breach of contract.

Even a figure for the overall amount advanced will not be published until October. Meanwhile the Bank is expected to issue at least £50bn of Treasury bills to banks in exchange for their mortgages – entirely in secret.

The REAL cost of inflation

April 22, 2008April 19, 2008 by Infinite

The Daily Mail’s Cost of Living Index reveals food prices rising at SIX times official figure

The true, devastating scale of rising prices is revealed today – by the new Daily Mail Cost of Living Index.

It shows that families are having to find more than £100 a month extra this year to cope with increases in the cost of food, heat, light and transport.

According to the Consumer Price Index, inflation is running at only 2.5 per cent.

Yet the Mail’s index finds that food costs alone are rising at 15.5 per cent a year – more than six times the official rate.

And there are double-digit increases in other “must-pay” essentials such as petrol, gas and electricity.

Many families need to find more than £1,200 extra a year just to stand still.

Once higher mortgage costs are added, millions are having to pay out at least another £2,000 a year to keep their heads above water.

The Bank of England’s chief economist Charlie Bean admitted last night that higher food and energy costs are likely to push the Consumer Price Index over 3 per cent this year.

Inflation hits consumers worldwide

April 14, 2008 by Infinite

(AXcess News) – Gas pumps in the United States tell the same story as rice prices in Thailand: Inflation is a global phenomenon this year.

Oil hit a record $112 per barrel this week, and a United Nations official warned of continued pressure on food prices, which by one index are up 45 percent in the past year.

The challenges are worst in developing nations, where raw materials account for a larger share of consumer spending. But another factor – the sagging value of the US dollar – means that imports cost more in America and other nations that peg their currencies to the dollar.

Still, regardless of this currency phenomenon, several broad forces are pushing prices up.

After years of strong global economic growth, prices of oil, grains, and some metals have spiked. Investors are adding fuel to that fire by buying up hard assets like commodities, which are viewed as a hedge against inflation.

More fundamentally, many nations have been relatively loose in the creation of money supply. For all the news about interest-rate cuts by the Federal Reserve, this trend goes well beyond US shores.

IMF says US crisis is ‘largest financial shock since Great Depression’

August 15, 2008April 10, 2008 by Infinite

A foreclosure sign in Florida. Photograph: Joe Raedle/Getty Images

America’s mortgage crisis has spiralled into “the largest financial shock since the Great Depression” and there is now a one-in-four chance of a full-blown global recession over the next 12 months, the International Monetary Fund warned today.