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Debate House Prices
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FED cuts by 0.5%
Comments
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If you just go back to 1970 then yes that is true...
But overall, through it's many "names" from Bank Rate, to MLR, Repo Rate and now Base Rate since 1694 (when it was initially set at 6%, before falling to 3% the following year) 4.5% is probably around the average Base Rate over that time.
And 5% is generally regarded by economists as the neutral rate for the economy at the moment (i.e. not tightening and not loosening).'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Strong currency at the moment though, I thought that was your point i.e. drop rates and weaken currency.
Their currency is has strengthened because out of all the major currencies, they are the country with the greatest GDP and productive capacity (which will be needed to dig themselves out of the rapidly depending economic disaster) and hence perceived as a safer place to put the cash (as bonds) which people have been averse to investing in the markets.
As for it being strong, well the main free-floating comparison currencies are Sterling and the Euro. Saying it is strong against them is damning it with feint praise.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Their currency is has strengthened because out of all the major currencies, they are the country with the greatest GDP and productive capacity (which will be needed to dig themselves out of the rapidly depending economic disaster) and hence perceived as a safer place to put the cash (as bonds) which people have been averse to investing in the markets.
As for it being strong, well the main free-floating comparison currencies are Sterling and the Euro. Saying it is strong against them is damning it with feint praise.[/quote]
Ah yes it is weak against the Yen, sorry what is the Japanese rate? is it 0.25?'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
I produced a reasonably detailed reply detailing why I thought that simply cutting rates to 'save the economy' wasn't a smart move - totally unaddressed by you in favour of a stupid sarky putdown.
Little point debating with people who just seem to be looking for a slanging match it would seem.
Get off your high horse why should I answer you when you did not answer the question!
No Slanging match, you just did not answer a simple question!
If some one asks you if you want a cup of tea they do not want to be told what the negetive effect would be or if coffee would be a better option some time in the future, answering the question is all that is needed!
We know there is no magic shot for the economy but do you think higher rates now are the answer or lower rates?
PS stop the little coments at the end this is debating.
I think you confuse debating with agreeing with you. If agreeing with you is debating, you are right we are not debating.;)0 -
Yes - low rates (and they started slashing them months back) have certainly worked for the US, haven't they :rolleyes:
Whew, they won't be having any economic problems now, will they?
Thanks for showing us the way US of A!
Have they not worked?
Please show some evidence as far as I know they are still trading and not bankrupt.
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Their currency is has strengthened because out of all the major currencies, they are the country with the greatest GDP and productive capacity (which will be needed to dig themselves out of the rapidly depending economic disaster) and hence perceived as a safer place to put the cash (as bonds) which people have been averse to investing in the markets.
As for it being strong, well the main free-floating comparison currencies are Sterling and the Euro. Saying it is strong against them is damning it with feint praise.
Ah yes it is weak against the Yen, sorry what is the Japanese rate? is it 0.25?
To Add to that the markets are reacting well to these low rates because going into a ressesion it is seen as a posertive step to ensuring the stability of those country's companies and workforces.
I think too many on here think interest rates only effect houses, and that low rates will stimulate the housing market.
If that is peoples worry they should open their eyes a bit because without jobs the whole home ownership thing will fly out of the window.0 -
To Add to that the markets are reacting well to these low rates because going into a ressesion it is seen as a posertive step to ensuring the stability of those country's companies and workforces.
I think to many on here think interest rates only effect houses, and that low rates will stimulate the housing market.
If that is peoples worry they should open their eyes a bit because without jobs the whole home ownership thing will fly out of the window.
Many of these jobs have turned out to be predicated on silly amounts of credit being available for which there is no real corresponding useful product in the economy.
They are going to go no matter what tricks the authorities try to pull. Unfortunately the process will also take down some otherwise good companies but such is the way these things work.
Once people have built adequate amounts of savings again and assets like houses are sensibly priced we can start rebuilding the economy with sensible lending against a sane baseline.
Until then the only way is down and feeding the credit dragon will at best postpone the immediate effects but result in a much greater crash at the end.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Many of these jobs have turned out to be predicated on silly amounts of credit being available for which there is no real corresponding useful product in the economy.
Histrorically (during the last 2 recessions) many manufacturing jobs where lost because of high interest rates and an over-valued sterling.
What do we currently manufacture that has no real use ?
We manufacture little enough in this county as it is, why are you so anxious to kill more productive capacity off ?
Seems a little odd.US housing: it's not a bubble
Moneyweek, December 20050 -
Until then the only way is down and feeding the credit dragon will at best postpone the immediate effects but result in a much greater crash at the end.
Why is low rates feeding credit.
Credit can be at any rate but if is not lent it does not matter.
A drop in rates will not mean more credit do you not understand that?
It will just make the businesses with loans have slightly more breathing space.
I think you will find we are already in the crash, but if you want to belive in some NWO scenario good luck.0 -
!!!!!!? I understand that you believe that low interest rates have brought us to where we are - that the low interest rates caused a credit boom, etc, etc. However, I do not really understand why you object to low interest rates now. I think you would agree that there has been a massive reduction in money supply caused by the delevaraging process. Thus, to counteract this governments have to try to do something to put some more money back into the system otherwise the situation would be catastrophic (as if it isn't bad enough already). Given the massive reduction in money supply, a reduction in interest rates and an increase in public spending would seem to be the obvious response...0
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