Osborne says that he would allow Bank to do more easing

StevieJ

des_cartes wrote: »

NE will only affect those who bought from around 2003 with high ltv mortgages. he majority of houseowners would not be in negative equity from falls of 30% over 3 years. Many people are paying down the debts anyway and as the more financially astute are beginning to understand, lower house prices mean they spend less on trading up to a larger property and the prospects for their children affording to buy in the future are improved.

I think most people have understood that for years

des_cartes

HAMISH_MCTAVISH wrote: »

Source? Evidence? Link?

Didn't thnk so.....

1% falls for even a few months would cause consumer spending to dry up and hurt the economy very badly indeed. There's no chance such falls would be tolerated for years without significant intervention.

You only need to go back to the early 1990's to see that the previous Tory government allowed prices to fall at this rate. They didn't intervene then to prop up overvalued house prices and they won't now.

des_cartes

Degenerate wrote: »

Er no, he's just promised to go along with whatever the MPC request, which is exactly what Brown & Darling did.

I guess it's only "funny money" when it's printed for a Labour chancellor.

If QE is authorised then you will see a very different application than when Brown threw funny money into the system only for most of it to finish up in the hands of those who had caused the same problems that resulted in the need for QE. The priority this time will be to channel money into small/medium sized businmess finance for companies that will provide the future wealth and not into the hands of bankers via propping up the bloated housing market.

Degenerate

des_cartes wrote: »

If QE is authorised then you will see a very different application than when Brown threw funny money into the system only for most of it to finish up in the hands of those who had caused the same problems that resulted in the need for QE. The priority this time will be to channel money into small/medium sized businmess finance for companies that will provide the future wealth and not into the hands of bankers via propping up the bloated housing market.

Brown and Darling had no say over how the QE money was directed, they just authorized the BOE's request. Osborne has said he will do the same. Are you suggesting that Osborne will reach in to meddle with the operation?

Incidentally, the last £200B was used to buy gilts as they are the safest asset class you could possibly use to push more money into the system. Any diversification into other assets such as corporate bonds (which may happen, it has been mooted) would be a riskier and inherently more "funny money" operation, because it runs the risk of the bond value being wiped out by bankruptcy and the money lost forever. QE up to this point has been constructed as a reversible operation, pushing money into the system by the purchase of assets that can certainly be sold or redeemed at close to the purchase value.

In short, you haven't a clue what you're talking about.

des_cartes

Degenerate wrote: »

Brown and Darling had no say over how the QE money was directed, they just authorized the BOE's request. Osborne has said he will do the same. Are you suggesting that Osborne will reach in to meddle with the operation?

Incidentally, the last £200B was used to buy gilts as they are the safest asset class you could possibly use to push more money into the system. Any diversification into other assets such as corporate bonds (which may happen, it has been mooted) would be a riskier and inherently more "funny money" operation, because it runs the risk of the bond value being wiped out by bankruptcy and the money lost forever. QE up to this point has been constructed as a reversible operation, pushing money into the system by the purchase of assets that can certainly be sold or redeemed at close to the purchase value.

In short, you haven't a clue what you're talking about.

I suggest you revisit this thread if and after any further QE has been implemented. I will be here to challenge your final sentence.

chucky

des_cartes wrote: »

You only need to go back to the early 1990's to see that the previous Tory government allowed prices to fall at this rate. They didn't intervene then to prop up overvalued house prices and they won't now.

the Tory government didn't allow prices to fall - they didn't know how to resolve the issues that had built up in the economy and didn't know how to deal with it because they had bigger issues to deal with.

when people criticise the last Labour government's economic policy and think the tories would have done better they should really look at the tory economic policy in the laste 1980s and early 1990s.

ERM anyone??

des_cartes

chucky wrote: »

the Tory government didn't allow prices to fall -

ERM anyone??

Nonsense. If they were concerned that falling house prices were a threat to the economy they could, and would have loosened monetary policy by lowering interest rates. It wasn't and they didn't.

chucky

des_cartes wrote: »

Nonsense. If they were concerned that falling house prices were a threat to the economy they could, and would have loosened monetary policy by lowering interest rates. It wasn't and they didn't.

you've shown you don't know what you're talking about again...

do you even know what the ERM issue was?

this link might help you - des_cartes helpline

lemonjelly

chucky wrote: »

the Tory government didn't allow prices to fall - they didn't know how to resolve the issues that had built up in the economy and didn't know how to deal with it because they had bigger issues to deal with.

when people criticise the last Labour government's economic policy and think the tories would have done better they should really look at the tory economic policy in the laste 1980s and early 1990s.

ERM anyone??

Made me chortle!

Pointless headline anyway. I'd expect the tories will want (to an extent) to allow the BoE to remain independent. I know that the tories will want the BoE to appear independent regardless.

The BoE will make the call, & in all likelihood, the government can go with it. It is great marketing after all. If it goes well, "we supported the independent BoE's decision. It wouldn't have happened under that lot!" If it goes pear shaped, "we went with the BoE, who were made independent by labour, remember. Lets blame them for that too!"

Degenerate

chucky wrote: »

you've shown you don't know what you're talking about again...

do you even know what the ERM issue was?

A little pointer for des_cartes:



A wonderful example of Tory economic competence.