Nationwide Nov08: -0.4% Mom, -13.9% Yoy

Jonbvn

baileysbattlebus wrote: »

After the remaining mortgage was paid off - we would have somewhere in the region of £300k - give or take.

the mortgage is around about £500

the house has 5 beds

if we invest the money at 6% it will give us around £1600 a month before tax

after tax about £1300 - which wouldn't be enough to rent a 5 bed house where we live - at a push we might get a 4 bed.

but we would be able to save the £500 mortgage payment

which would give us £6k a year + interest - tax

and our current equity would stay our current equity.

Would I do it - I don't know, it's not something I've ever thought about - I've never looked on the house as an asset that you could realise. The house is where we live, and I'm not emotionally attached to it really, we will sell one day and downsize. Would I rather have the house or the money - I'm not sure.

Getting 6% interest is overly optimistic. You will be lucky to get £1k pcm after tax.

With a deflationary economy the plan is good. However, as soon as you get any significant inflation (we will eventually), then your equity will be reducing. Some people reckon hyper-inflation may occur.

Plasticman

Generali wrote: »

It's about 20C at the mo over here and they reckon it'll get up to about 26C this afternoon. They're forecasting thunderstorms this afternoon - no bad thing as it's a wee bit muggy.

I don't think I like you any more

fc123

!!!!!!? wrote: »

I don't think this means anything like the end but don't close your eyes to market developments.

Give it another 6 months and those 8 trillion dollars pumped into the system (so far, there's more every day) might start to show their effect.

If they do, then expect inflation - and therefore house prices - to gain pace rapidly. Anyone with cash is going to see its purchasing power start to decline rapidly. Inflation basically steals from savers and earners to give to borrowers and debtors.

Remember, sustained deflation would be the worst possible thing that could happen to the governments of the West (they are as indebted as the individuals) so they simply will do anything to stop it happening ... and they have control of printing the money. Sooner or later they'll kick off sharp inflation and you don't want to be caught napping.

In the meantime, just enjoy the fact that consumer prices are deflating for the moment, house prices deflating even faster and unlike many, you've got money in the bank.

Chatting to my old dad about this. He believes that the govts of many countries will do this as the inflation will erode their debts away a lot quicker than doing it old style. Problem solved.

Worrying as I may repeat his life during the 70's...the one decade where I could have earnt a fair bit....just wafted away in inflation and high taxes.

neverdespairgirl

jamescredmond wrote: »

as he reclined lazily on the lido, the rapidly-tanning generali considered his options.

WIth that lovely red hair, I hope he's full-on with the suncream, as I can't imagine much tanning!

neverdespairgirl

chrisandanne wrote: »

Thanks for that Gen...guess what...it's cold, dark and it's rained all day, the pigeons have gone to bed and we had stew for tea 'cos it's cheap.

We had rice, sweetcorn, and soya beans, because it was Isaac's turn to choose.

neverdespairgirl

Jonbvn wrote: »

Getting 6% interest is overly optimistic. You will be lucky to get £1k pcm after tax.

All of our savings are currently 6.9% or more, fixed for another 5 to 11 months.

Generali

neverdespairgirl wrote: »

WIth that lovely red hair, I hope he's full-on with the suncream, as I can't imagine much tanning!

I'm slathered in #35 sun cream. Not much chance of buring!

dopester

fc123 wrote: »

Chatting to my old dad about this. He believes that the govts of many countries will do this as the inflation will erode their debts away a lot quicker than doing it old style. Problem solved.

Worrying as I may repeat his life during the 70's...the one decade where I could have earnt a fair bit....just wafted away in inflation and high taxes.

That is what inflation has being doing over the last 50 years. Deflation is a delayed compensation for inflation.

You ought to be careful if you are placing your bet on inflation forever and ever.

The question is whether hyperinflation, destroying the bond markets and the financial economy to ruin, is worth the cost of inflating away debts. I think the hyperinflation some wish for would be a lot worse than accepting deflation, and the market will fight to stop themselves being annihilated by debt lovers.