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Even Merryn gets it..... (at last)
HAMISH_MCTAVISH
Posts: 28,592 Forumite
http://www.moneyweek.com/blog/property-market-bail-out-is-making-you-poorer-00248.aspx#commentsThe Bank of England's deputy governor, Charlie Bean, says that savers who don't think they are getting enough interest on their cash should keep their consumption up by spending their capital instead. Savers, obviously, find that a pretty unpalatable solution to their problems.
They wonder if a better solution might be for the Bank of England to note that inflation is far, far higher than 2%, and to put rates up.
Sadly, that isn't going to happen.
What we are seeing in the UK economy at the moment is a sustained effort to engineer nominal property price stability.
Why?
Because sustained property price falls and their knock-on effects through consumption to the rest of the country are currently considered to be just too damaging to our still-fragile financial system.
But while everyone is worrying about deflation, it is entirely possible that this price stability (or the effort to create it at least – there is no guarantee that it will work) will come at the cost of inflation in pretty much everything else.
Even Queen Bear MSW gets it.
Why is it so hard for our little bunch of bear cubs to accept?
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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Funny it should be you posting this article up Hamish.
Supply and Demand is all there is. Those are your fine words, are they not? I'm sure we have heard them over and over again in relation to proerty prices.
But what's this? Is it a change of tact? Maybe a lightbulb moment? A new visionary?
It's even bolded...What we are seeing in the UK economy at the moment is a sustained effort to engineer nominal property price stability.
Really?
Now who would have guessed? Engineered property prices? BOE in the same article?
Never!!
So what's happened now to supply and demand?0 -
If you were so convinced Hamish, you'd be on here telling us about your new purchase.
Until you put your money where your mouth is, your opinion is essentially worthless.0 -
If you were so convinced Hamish, you'd be on here telling us about your new purchase.
Until you put your money where your mouth is, your opinion is essentially worthless.
I find this opinion rather strange and have said what I'm about to say before. Even if you're incredibly bullish about a specific asset (as Hamish seems to be with property) you still don't spend every last penny you have investing in that asset. For example, I'm bullish about the Indian stock market's prospects over the next 5-10 years. Therefore around 15% of my portfolio is currently in India and I stick around 10% of my new investment money each month in India. However, I obviously wouldn't invest 100% of my money in India as this would be a foolish approach, but I'm still very bullish about this asset.
Therefore, I understand that Hamish can be extremely bullish about property yet not wish to buy / invest any more at the moment. Can you not see or understand this?0 -
I thought house prices were high due to the shortage of land, supply and demand, increasing population etc.. and that they would never fall because of these facts.HAMISH_MCTAVISH wrote: »http://www.moneyweek.com/blog/property-market-bail-out-is-making-you-poorer-00248.aspx#comments
Even Queen Bear MSW gets it.
Why is it so hard for our little bunch of bear cubs to accept?
We have been told this time and time again, but now is seems that this is not true and they need to take any measures necessary to keep prices high, if they don't prices will fall.0 -
Graham_Devon wrote: »Supply and Demand is all there is. Those are your fine words, are they not?
Originally? No.
I borrowed them from generali.
But I agree 100%.So what's happened now to supply and demand?
Since when have I ever denied that the availability of mortgage finance, interest rates, etc are all components of the supply and demand equation?
Oh, that's right..... I haven't.
So this is just another one of your strawman moments.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
satchmeister wrote: »I thought house prices were high due to the shortage of land, supply and demand, increasing population etc.. and that they would never fall because of these facts.
We have been told this time and time again, but now is seems that this is not true and they need to take any measures necessary to keep prices high, if they don't prices will fall.
Are you really this stupid?
Or is this just deliberate trolling.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Did Merryn 'get it'?
Did you 'give it to her'?
Sorry, just bored.
Still, dippy title, deserves it really...0 -
Did Merryn 'get it'?
Funny, you've always been quite the Merryn fan.
Let me guess, now you disagree with her?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
So what part does engineering house prices have in supply and demand Hamish?
I don't think you realise, but you have just posted up, basic confirmation of everything "bears" have been saying about propped up house prices, which has consistently been met with "its supply and demand, BOE does not target house prices".0 -
Graham_Devon wrote: »So what part does engineering house prices have in supply and demand Hamish?
Engineering price stability enables the conversion of need and desire into effective demand.I don't think you realise, but you have just posted up, basic confirmation of everything "bears" have been saying about propped up house prices, which has consistently been met with "its supply and demand, BOE does not target house prices".
And I'll ask you again, since when have you ever seen me deny that the availability of finance, interest rates, etc are not components of demand?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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