MSE News: Halifax: housing shortage boosts prices

chucky

Graham_Devon wrote: »

I have already said. Without QE, banks would not be lending anywhere near what they are now. Hence the whole point of QE. To sort out an issue so that other parts of the business can continue.

so remind me your stupid point about comparing with Germany, their stimulus and their current issues?

Graham_Devon wrote: »

Wish you would just stop trying to make a mountain out of a molehill every time i post and twist beyond belief.

get over yourself, your paranoia is getting to you. are they chasing you around yet?

if you call that twisting beyond belief you have issues. you post stuff that makes no sense and i've highlighted that what you've said is wrong. quite simple. if you don't like it go back to DT and chat about subjects that you usually talk about like Prostitution.

chucky

stueyhants wrote: »

I'm not claiming to be an expert on this but I was under the impression that a lot of the money was not actually getting in to the wider economy and was sitting in the BoE as captial, deposited by the main banks.

One of the nice effect of QE is the profit the banks can make by buying governement gilts one week and then getting a genrous settlement as the BoE buys the gilts back through QE shortly after.

i think it will depend on the banks to be fair. some are using it for different things depending on the mess that their balance sheets were/are in.

QE does seem to be getting into the money supply as quickly as they'd like but maybe not as quickly as the BOE would like - they may need to exert political pressure on banks (threat of a bonus tax?) for them to use QE money for what they intended it for. it needs M4 to pick up to about 5% for it to be seen as working.

stueyhants

I agree with Graham on the Germany example.

An industry propped up with artifical stimulus will not do well once that stimulus has been removed without a sustained recovery in consumer demand (and ability to pay !)

What the Germany example is showing is that there isn't a real recovery in demand over there.

The UK is being propped up by a number of different stimulus. If we remove them too early I would argue the same would happen in the UK.

Now surely you can't disagree with that ?

stueyhants

chucky wrote: »

i think it will depend on the banks to be fair. some are using it for different things depending on the mess that their balance sheets were/are in.

QE does seem to be getting into the money supply as quickly as they'd like but maybe not as quickly as the BOE would like - they may need to exert political pressure on banks (threat of a bonus tax?) for them to use QE money for what they intended it for. it needs M4 to pick up to about 5% for it to be seen as working.

Negative IR on BoE deposits should do the trick !

chucky

stueyhants wrote: »

I agree with Graham on the Germany example.

An industry propped up with artifical stimulus will not do well once that stimulus has been removed without a sustained recovery in consumer demand (and ability to pay !)

What the Germany example is showing is that there isn't a real recovery in demand over there.

The UK is being propped up by a number of different stimulus. If we remove them too early I would argue the same would happen in the UK.

Now surely you can't disagree with that ?

yep i can

Germany is restricted in it's options to create demand. they have the issue of the Euro where it couldn't devalue like Sterling has, also the QE isn't going to be anywhere as accurate where you have the size of Europe and the number of countries in a worse state than the UK. they're going to soak that QE money like a sponge. it's the velocity of the money supply that we're trying to stimulate - here is where we have the "advantage" (i say that loosely) in the UK where we have more of a direct influence on our economy.

stueyhants

chucky wrote: »

Germany has the issue of the Euro where it couldn't devalue like Sterling has, also the QE isn't going to be anywhere as accurate where you have the size of Europe and the number of countries in a worse state than the UK. they're going to soak that QE money like a sponge. it's the velocity of the money supply that we're trying to stimulate - here is where we have the "advantage" (i say that loosely) in the UK where we have more of a direct influence on our economy.

Europe is mixed bag, some relatively strong countries and some up to their necks in it (i.e. the PIGS) so it depends whether the strong can help pull the others in to growth and recovery.

The UK has some serious inbalances, the country is spending too much money and that will have to stop. I think the UK has been shielded from international investor worries because a lot of countries are in the same boat.

What would concern me is if other countries (US, EU etc) grow before us or have stronger growth then we could become isolated and investment would dry up. Possinly forcing IR up beyond the natural level just to maintain international investment, espcially supporting our fiscal requirements which if we even half in the next 4 years are still significant per year.

It's not all doom and gloom there are some strong parts to the UK, I just hope another unsustainable housing boom doesn't cause another crash in the near future. Lets have stagnation for 10 years while wages catch up, that's probably the best outcome for the majority of the country.

nembot

Still don't get excited by figures when there's billions of pounds at stake, i'm sure they'd say black is white if it came to it and the HPI'ers would be reaching for the party poppers proclaiming "we told you black is white, haha you missed the boat"


Just like normal....