If QE Was Withdrawn....

Glen_Clark

dktreesea wrote: »

If housing benefit wasn't paid on, say, the first £40 of rent a week, and then only a certain percentage thereafter,up to, day a maximum about of £200 a week, people in private lets that they can't afford would be quick to move to more affordable housing.

That seems to be Cameron's thinking. But he, like you, is so detached from reality he doesn't realise affordable housing is not available. Thats why we have to have housing benefits in the first place.
Councils put people in the cheapest available - which is sometimes very expensive.

Glen_Clark

JohnRo wrote: »

Slum lords are the problem .

Slum landlords are the result of the problem, which is restricting the housing supply to force up house prices. Many supposedly respectable people are part of that, like the National Trust/English Heritage/RSPB who consider their view of an open field or wild birsd habitat more important than thousands of people having a proper home, Other Selfish Local Nimbys, and Politicians and Royalty which pander to them to boost the price of their own rental portfolios.

bowlhead99

QE or money printing pushes up asset prices because of the extra cash and cheap finance floating round the economy. As investors, what we want, are our equities to go up in value at a rate exceeding the resulting inflation - which should be possible because of the businesses and consumers using the stimulus to expand and spend, respectively.

The problem is that one of the classes of asset prices boosted by general QE, Funding For Lending, Help To Buy etc is residential property, which is a problem given we all need to live somewhere while only some of us can invest in it.

Therefore arguably to make the printing of money more neutral on anyone wanting to rent a house or buy a house, we should print more houses.

grey_gym_sock

bowlhead99 wrote: »

Therefore arguably to make the printing of money more neutral on anyone wanting to rent a house or buy a house, we should print more houses.

http://www.bbc.co.uk/news/technology-22152212

cepheus

informative post on this subject here
Will the end of Quantitative Easing trigger a second crisis?

By Ranjit Sidhu | Published: June 3, 2013


Something strange has been happening in the stock markets since 2008: they have been going up. Not just up, but absolutely flying.


Through the prolonged failed recovery, unemployment, an investment crisis, the Fukushima crisis and the EU debacle, Wall street, still the market all else look to, has doubled in value.
Since 2008 the world’s central banks have taken a proactive stance with Quantitative Easing (QE) of which we have no historical precedent to fall back on. However, when you plot the major actions of the US Federal Reserve with the Wall Street market on a monthly basis, the correlation is clear (fig 1).

Over the last few weeks something even stranger happened: while the US economy has shown real signs of growth with house prices rising and unemployment falling, Wall Street lost 300 points and government bond interest rates spiked. Again, QE was the major factor: as unemployment closed in on the Federal Reserve’s target of 6.5 per cent, the markets got spooked that Ben Benanke, the chairman of the Federal Reserve, would start to withdraw their QE monthly fix.

JohnRo

Perhaps it shows quite clearly the consequences of central banks using the billions they're printing to buy stocks - either directly or through retail outlets. The printed money that we've all been conned into thinking was going to be used to lend out to SME and get the economy moving has and is instead, predictably, being used by private banksters for speculation and private profit at every one elses expense. No changes there then.

The complete disconnect between stock markets and the real economy has coincided with QE and the disconnect is so severe that no one is at all sure where proper levels are and should be, which is why there are these strong pull backs on any news about reducing or withdrawing the narcotics supply.

pqrdef

bowlhead99 wrote: »

As investors, what we want, are our equities to go up in value at a rate exceeding the resulting inflation - which should be possible because of the businesses and consumers using the stimulus to expand and spend, respectively.

But consumers aren't spending, because the stimulus isn't reaching them.

If you want more money pumping round the economy, it's absurd to be having pay freezes and benefit cuts at the same time.

Only the UK is doing this.

pqrdef

JohnRo wrote: »

The complete disconnect between stock markets and the real economy

I think part of the problem is that traders are too well insulated from the real world. The news is something abstract that they read on their screens, as if it were all happening somewhere else. They don't feel it, so they soon forget it. Two days with no fresh bad news and they've gone back to thinking everything's OK again really - because in their world, it is.

sabretoothtigger

They arent supposed to feel it, they arent workers of these companies. Their job is to relate a global company earnings to a local price in sterling.

If UK stock exchanges trade the worlds largest companies but it is only 1% of the world population then we arent the influence many think we are, it is another world

money pumping round the economy, it's absurd to be having pay freezes

pqrdef

sabretoothtigger wrote: »

Their job is to relate a global company earnings to a local price in sterling.

But they don't. Until they get reminded, they forget how much crap they haven't priced in.