QE and asset price bubbles

Graham_Devon

Sir Humphrey, it's a fair point.

Everyone is reliant on the economy, whether thats a home owner, renter, farmer, haulier or dog owner.

But it's asset prices of houses that are inflating beyond anything else at the moment, which, can be bad for home owners, as well as good for home owners.

macaque_2

Generali wrote: »

The biggest problem for me with price bubbles is that it leads to a misallocation of investment. For example, lots of cash has been spent on buying 2 bed flats to rent out in horrible towns. The investment was made in many cases on the back of house prices rising at 20%+ pa.

If that money had been invested in businesses making other things or supplying needed services (for example there is a lack of accountants across the world) then a better economic outcome could have been available.

How you get to para 2 rather than para 1 I have no idea. Government diktat has been shown to fail rather dramatically. I'd love to see an alternative.

This wins Macaque's post of the month award. A framed copy will be displayed at the head quarters of the 70% club.

chucky

Graham_Devon wrote: »

But it's asset prices of houses that are inflating beyond anything else at the moment, which, can be bad for home owners, as well as good for home owners.

no that is not correct - have you not seen the equity markets and the price of gold?

the increase in house prices is a small percentage to what they've increased by

Graham_Devon

Sorry chucky. Although I can see what you are doing here, and have already done it to sir humphrey and then again at the new poster on the property prices thread...

You seem to have missed the fact that you don't pay a mortgage, therefore are not so much reliant on keeping your job, to buy your gold or equities.

I know I said asset prices, and thats given you this, but I was talking in context to this thread.

chucky

Graham_Devon wrote: »

Sorry chucky. Although I can see what you are doing here, and have already done it to sir humphrey and then again at the new poster on the property prices thread...

You seem to have missed the fact that you don't pay a mortgage, therefore are not so much reliant on keeping your job, to buy your gold or equities.

I know I said asset prices, and thats given you this, but I was talking in context to this thread.

the biggest feeder of QE hasn't been house prices (as you'd like to think) it's been the equity markets and commodities - have a look at the commodity stocks and commodity prices.

you've lost me with the link between QE and mortgage payments - does QE pay your mortgage?

i'm sorry - i can only reply to what you post. i don't have a crystal ball to see what you're thinking or what you'd like to to post.

i'm also sorry if you've made a statement, I reply to it and because you don't like the answer go around and pretend that you never meant that.

Generali

macaque wrote: »

This wins Macaque's post of the month award. A framed copy will be displayed at the head quarters of the 70% club.

Close to being an honorary member of the 70% club.

Where do I get my quasi-certificate my simian friend?

My most gracious thanks to you macaque.

Graham_Devon

chucky wrote: »

the biggest feeder of QE hasn't been house prices (as you'd like to think) it's been the equity markets and commodities - have a look at the commodity stocks and commodity prices.

you've lost me with the link between QE and mortgage payments - does QE pay your mortgage?

i'm sorry - i can only reply to what you post. i don't have a crystal ball to see what you're thinking or what you'd like to to post.

i'm also sorry if you've made a statement, I reply to it and because you don't like the answer go around and pretend that you never meant that.

I don't need to pretend. You've just done it again. I never mentioned QE, but you are trying to say I am wrong, yet again. Trying to tell me I said it, yet again, when quite clearly I didn't. Trying to make out Sir Humphrey said ALL home owners will have problems, when he clearly didn't say that.

The QE link is in the original post, and article. Wasn't in my post. The QE thing leads on to the bigger point which Sir Humphrey made.

I just wish you would stop constantly doing this over and over and over again. It's dire for anyone else to have to read it.

chucky

Graham_Devon wrote: »

I don't need to pretend. You've just done it again. I never mentioned QE, but you are trying to say I am wrong, yet again. Trying to tell me I said it, yet again, when quite clearly I didn't. Trying to make out Sir Humphrey said ALL home owners will have problems, when he clearly didn't say that.

The QE link is in the original post, and article. Wasn't in my post. The QE thing leads on to the bigger point which Sir Humphrey made.

:wall::wall::wall:

Sir Humphey implicitly said home owners - he didn't mention anyone other category or did he not?

Sir_Humphrey wrote: »

It is no good being a home owner if you are made unemployed.

can you see the word 'home owner' implicitly stated there. all you're doing is looking for a fight Graham - please stop. it's only an internet forum where people share their views. that's all

Graham_Devon

chucky wrote: »

:wall::wall::wall:

Sir Humphey implicitly said home owners - he didn't mention anyone other category or did he not?

can you see the word 'home owner' implicitly stated there. all you're doing is looking for a fight Graham - please stop. it's only an internet forum where people share their views. that's all

Yes, and home owners will be effected.

Renters will have their full rent paid for them after a certain amount of weeks should they find themselves unemployed in many cases. Owners will not, they will have only the interest paid, which could lead to difficulites.

chucky

Graham_Devon wrote: »

Yes, and home owners will be effected.

Renters will have their full rent paid for them after a certain amount of weeks should they find themselves unemployed in many cases. Owners will not, they will have only the interest paid, which could lead to difficulites.

at least you've now understandood my original question Graham and replying to it sensibly which Sir Humphrey failed to do which could have been done 8 posts back.

my next post then went on to ask how he could come to such an assumption without knowing the effect on home owners and their personal situations.

i also mentioned to you about equities and gold in relation to asset bubbles - they are the main asset bubbles at the moment. the house price bubble is masked more because everyone needs a home to live in.