End of QE

treliac

I know enough who have maxed out on credit cards, taking advantage of the many tempting offers that used to come pouring through the letterbox and shuffling money from one to the other. Then have made regular drawdowns on their equity, on the premise that property prices always rise.

We have neighbours that recently lost their house to repossession and have relatives who have continued to spend more than they earn, living for the moment, without any real sense of the future.

I do think that some of these things are held in a state of delicate balance that won't take much to upset.

For too long there's been a sense of entitlement... that people should be able to have the finer things of life, whether they can actually afford them or not. This feeling is ingrained at many levels of society and isn't going to disappear until the capacity to borrow halts, they are forced to address the need to repay debt, increases in the cost of living hit - and it all becomes unsustainable.

Cleaver

bo_drinker wrote: »

More like all the bikes were made in China, the kid wasn't ready to go it alone the stabiliser breaks(from China) the kid comes off and gets a bloody nose for a long time and is too scared to get on the bike again. The bike lays on the floor and a tumbleweed blows by again and again. The end.

To be fair I hadn't considered that third scenario. I think when people combine ideas like this you get what is called a 'complex economic future-simulation model' (Generali will know all about these).

We'll call it the Cleäver-Drinker Model. You have to have an umlauts to make it look more credible.

Thrugelmir

Cleaver wrote: »

Thrugel, I think we both know that the people who spend their time on here with a constant mantra that we're all screwed, doomed and everything is awful are the same deep down as the ones who are always trying to tell us that everything will be fine and rosy in the world. Both sets of people have some serious self-doubt issues are are probably very unsure of their convictions in real life.

Agree with your comments. I've no objection to be corrected or proved wrong. Terms such as screwed, doomed etc make me laugh. As even with less money we'd all be around tomorrow. And most likely far far happier.

Emy1501

My understanding is the BOE feel its takes 9 months or so for QE to take effect so we are are only really now seeing the effect of it and we will see the effects of it for some months yet. Other though will say the effects are pretty immediate and therefore we will see the effects of the lack it pretty soon.

I suspect if we see reasonable growth figures in line with AD's predictions over the next 6 months or so then we will be OK for the time being. If there is a double dip though then government borrowing is going to get very expensive and interests will probably go up etc.

I'm not sure QE itself will have an effect on prices in the short term. More likely the stopping of SMI's, letting banks repossess again etc which will have the main effect if a new government cannot afford to keep them running.

Emy1501

Cleaver wrote: »

Thrugel, I think we both know that the people who spend their time on here with a constant mantra that we're all screwed, doomed and everything is awful are the same deep down as the ones who are always trying to tell us that everything will be fine and rosy in the world. Both sets of people have some serious self-doubt issues are are probably very unsure of their convictions in real life.

Totally agree with you. I don't think things are going to pretty over the next few years, not we are all doomed etc but things will be tight for most. I'm though comfortable with the fact I could be wrong and in some ways I hope I am.

Thrugelmir

Emy1501 wrote: »

My understanding is the BOE feel its takes 9 months or so for QE to take effect so we are are only really now seeing the effect of it and we will see the effects of it for some months yet. Other though will say the effects are pretty immediate and therefore we will see the effects of the lack it pretty soon.

I suspect if we see reasonable growth figures in line with AD's predictions over the next 6 months or so then we will be OK for the time being. If there is a double dip though then government borrowing is going to get very expensive and interests will probably go up etc.

I'm not sure QE itself will have an effect on prices in the short term. More likely the stopping of SMI's, letting banks repossess again etc which will have the main effect if a new government cannot afford to keep them running.

The trouble is, the outcome of QE is unknown. The banking system is off life support but still in intensive care. QE has resulted in the BOE buying Government debt.

We've been in a cocoon so far. Once QE disappears the UK is exposed to the international money markets. Greece is a classic example of the money markets dictating events. As Soros did to the UK some years ago.

chucky

Thrugelmir wrote: »

Many are already choking on their current debt.

these forums do make make people present things in the most dramatic way. do they do it to attract attention as they are missing something at home? i don't know, just putting it out there...

i don't know any people that are choking with debt, i know less than a handful of people that have been made uemployed. tyhey found work within a couple of months.

they were careful with their money and i guess they could have struggled if they were unemployed for a longer period.

but the comment "Many are already choking on their current debt" is a pretty dramatic statement that i don't agree with at all.

carolt

chucky wrote: »

these forums do make make people present things in the most dramatic way. do they do it to attract attention as they are missing something at home? i don't know, just putting it out there...

i don't know any people that are choking with debt, i know less than a handful of people that have been made uemployed. tyhey found work within a couple of months.

they were careful with their money and i guess they could have struggled if they were unemployed for a longer period.

but the comment "Many are already choking on their current debt" is a pretty dramatic statement that i don't agree with at all.

What a strange thing to say to one of our most respected posters.

chucky

Emy1501 wrote: »

I don't think things are going to pretty over the next few years, not we are all doomed etc but things will be tight for most. I'm though comfortable with the fact I could be wrong and in some ways I hope I am.

this is nothing new and what most people with balanced views would be expecting...

JonnyBravo

Cleaver wrote: »

The line in bold: is this the case? I must move in very savy fanancial circles you know. I always thought that I knew a wide mix of people with varying incomes at, dare I say it, different levels of society. And I don't know anyone 'choking on debt'. Maybe they're all just lucky or clever.

Have you considered you don't know anywhere near enough people for it to be considered representative with any confidence whatsoever?

Incidentally I know of one family struggling with debt. Always been the same. Withdrawn equity a couple of times and now it's biting them in the !!! of course. They won't lose the house, but gone are the holidays and any chance of moving etc.