Is inflation starting to hit the housing market?

grizzly1911

IveSeenTheLight wrote: »

Your referring to deflation however.
I'm keen to understand what you are referring to as deflating.

Does thrug mean that everything else apart from housing is inflating, in most parts of the country and that for some it has yet to bottom out on it's slide?

Thrugelmir

IveSeenTheLight wrote: »

Your referring to deflation however.
I'm keen to understand what you are referring to as deflating.

If BOE does not continue to provide liquidity to the markets. Then the money supply will contract.

IveSeenTheLight

Thrugelmir wrote: »

If BOE does not continue to provide liquidity to the markets. Then the money supply will contract.

But you were talking about prices.
Talking about falling assets prices
If you look at the data, we have basically stagnated the last three years.
Where in the nominal deflation you are talking about that would outweigh hedging the costs against future inflation?

Thrugelmir wrote: »

You are starting from the point that prices must increase.

Maybe deflation is the real enemy.

As those overleveraged will be the ones at risk. As falling assets prices do not provide cover for those very real debts.

Harry_Boyle

Thrugelmir wrote: »

If BOE does not continue to provide liquidity to the markets. Then the money supply will contract.

Do you believe that the BoE will stop providing liquidity to the markets and allow deflation to occur?

Thrugelmir

Harry_Boyle wrote: »

Do you believe that the BoE will stop providing liquidity to the markets and allow deflation to occur?

BOE's remit is to maintain financial stability. Much depends on global events going forward as opposed to UK centric.

Thrugelmir

IveSeenTheLight wrote: »

But you were talking about prices.
Talking about falling assets prices
If you look at the data, we have basically stagnated the last three years.
Where in the nominal deflation you are talking about that would outweigh hedging the costs against future inflation?

Since the 70's the UK has had an ever increasing money supply coupled with looser and looser credit conditions. Now that's stopped. We have at least 5-6 years of retrenchment at the very least. So the "inflation" you are referring to is no more. Unless we all become super productive and increase GDP per head by some margin.

Harry_Boyle

Thrugelmir wrote: »

BOE's remit is to maintain financial stability. Much depends on global events going forward as opposed to UK centric.

Is that a 'yes' or 'no'?

Thrugelmir

Harry_Boyle wrote: »

Is that a 'yes' or 'no'?

Bets are currently on hold. Carney isn't on board until 1st July.

So King is unlikely to introduce any new lending schemes.

Given state of the banks. I would say that the BOE is highly likely to engineer at least one scheme to assist domestic lending for business and retail purposes. The caveat though is this will not increase overall mortgage lending merely support it. .

IveSeenTheLight

Thrugelmir wrote: »

Since the 70's the UK has had an ever increasing money supply coupled with looser and looser credit conditions. Now that's stopped. We have at least 5-6 years of retrenchment at the very least. So the "inflation" you are referring to is no more. Unless we all become super productive and increase GDP per head by some margin.

So........
Your position is..........

"Retrenchment" for 5-6 years (can we assume this includes the last three years stagnation?)

Then we will see the deflationary nominal prices you are referring to?

IveSeenTheLight

Thrugelmir wrote: »

Bets are currently on hold. Carney isn't on board until 1st July.

So King is unlikely to introduce any new lending schemes.

Sir Mervyn King put the proposal for more QE at the last MPC meeting and was voted against.

There is no edict that says things are on hold until Mr Carney suceeds in July