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Debate House Prices
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Debt really is wealth..... Apparently.
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Why not? Inflation normally encourages spending, on the grounds that if you don't buy it now, it will be dearer later. That's why deflation is so dangerous to economies - nobody spends because they're waiting for cheaper later.SecondLegDownIsTheBigOne wrote: »inflation and low interest rates are not encouraging us to spend
And low interest rates are hardly an encouragement for saving.
What is odd about the current economic situation is the number of people whose response to it is perverse. The economists are doing their nuts because people just aren't behaving like the textbooks say they should be, pursuing self-interest."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
What is odd about the current economic situation is the number of people whose response to it is perverse. The economists are doing their nuts because people just aren't behaving like the textbooks say they should be, pursuing self-interest.
It's not that people's response is perverse....
Millions of people would love to take advantage of the once-in-a-lifetime record low rates and buy houses, furnishings, etc, which would stimulate the economy exactly as intended.
However the banks are absorbing all the QE money to rebuild balance sheets and increasing margins between cost of funding and retail loan rates to record high levels of profitability.
The banks are threatening the economic recovery, not the people. And if this doesn't change soon, at some point there will have to be more direct intervention from either the govt or BOE to get spending moving again as has happened elsewhere.“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 -
I think we need people to spend on goods and services, not just blowing up asset price bubbles.HAMISH_MCTAVISH wrote: »Millions of people would love to take advantage of the once-in-a-lifetime record low rates and buy houses, furnishings, etc, which would stimulate the economy exactly as intended."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
HAMISH_MCTAVISH wrote: »It's not that people's response is perverse....
Millions of people would love to take advantage of the once-in-a-lifetime record low rates and buy houses, furnishings, etc, which would stimulate the economy exactly as intended.
However the banks are absorbing all the QE money to rebuild balance sheets and increasing margins between cost of funding and retail loan rates to record high levels of profitability.
The banks are threatening the economic recovery, not the people. And if this doesn't change soon, at some point there will have to be more direct intervention from either the govt or BOE to get spending moving again as has happened elsewhere.
The banks didn't stop us from taking advantage of these once in a lifetime rates. We're almost 2 years in and no rate change.
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HAMISH_MCTAVISH wrote: »However the banks are absorbing all the QE money to rebuild balance sheets and increasing margins between cost of funding and retail loan rates to record high levels of profitability.
Suggest you read the banks published figures. Lloyds saw a decline in net lending margin in 2011 and is forecast see to further decline in margin in 2012.
My small building society lender made a net after tax profit of £112,000 in 2011. Hardly profiteering.....0 -
I think we need people to spend on goods and services, not just blowing up asset price bubbles.
You really don't get it.
There will be no significant recovery in the wider economy until there is a house price recovery.“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 -
HAMISH_MCTAVISH wrote: »You really don't get it.
There will be no significant recovery in the wider economy until there is a house price recovery.
I cant see a house price recovery happening in my neck of the woods unless we get a sudden increase of employment opportunities.
Its like a vicious circle isnt it.0 -
What if I don't need to buy anything? Living costs aside, I have all the shizzle I need. If any appliance packs up tomorrow, I'll go out tomorrow and buy one to replace it. I own all my "possessions" outright, we own our car outright, we own our furniture outright, we own our appliances outright and we have no debt.
I don't have a speak-your-weight mobile phone, I don't need one. A couple of friends were showing off their tablets, I played around with one for a while, determined that it does nothing that I need that my laptop doesn't and in fact fails to do 1 thing that is essential to me. Why should I buy one? To keep someone made to work for their JSA occupied? I know the difference between need and want. But if anything goes wrong with life tomorrow, I know I can cope for a while.1. The house price crash will begin.
2. There will be a dead cat bounce.
3. The second leg down will commence.
4. I will buy your house for a song.0 -
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RenovationMan wrote: »I can't remember where your 'neck of the woods' is this week, but around Manchester, property prices are rising.
Lucky for me i dont live around manchester.
I live quite a few miles away from manchester and have a few areas in mind to move to, none of them have seen any price rises.0
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