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Here come the apologists for interest rate rises yet again. They appear not to understand the acute deflationary pressures on the economy. Such recovery as there was after 11th September is already drawing to a close - just consider the effect on spending power in the South East of the new wave of layoffs in the City.
This week we have learned that inflation did not rise as the "experts" had expected - no surprise if you have listened to our message. There are many ways of avoiding future inflation. One serious method would be to impose restrictions on lending. Why are the authorities so reluctant to do so? Because they want to create inflation; the fight against it is rank hypocrisy.
It now looks as if events will take over and force the pace. The stock market is poised for a renewed downward drive following the countertrend rally which started last November. The global economy may aready be weakening. Consumers certainly cannot afford to pay higher interest rates without some serious economic damage resulting, a point the authorities are only too uncomfortably aware of.
These limited standards of analysis extend to ignorance of the Gilt market. The market has long since anticipated the possibility of a rate rise and is now starting to think about serious recession. Yet, even in the last week, an investment magazine that ought to know better published the statement "Gilt prices are likely to fall when interest rates rise from their current low". Contrarians read this as a sign that lower interest rates lie ahead.
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