The future of interest rates? Can you afford it?

fingledingle

ItsyBitsySpider wrote: »

Pardon my ignorance, I am just a new member but whatever you are saying can be easily interpreted as financial advice. What are your credentials, would you like to reveal your identity?

Give the guy a break,anyone who takes it as financial advice without checking other sources would deserve a fall.
I thought it was a good summary of the state of the game at this point, but I would not view it a solid advice,and ask for his credentials.

demontfort

HAMISH_MCTAVISH wrote: »

Whilst I'd be absolutely delighted to have Mark Carney's pay packet, I'm afraid that I can't take credit for his wise forward guidance on rates.

But anyone wondering if UK housing is going to get cheaper or more expensive over the next 5 years, should probably note the extraordinarily high £250,000 per year housing allowance he negotiated for himself before taking on the role....;)

Oh I'd be delighted to have Carney's job, essentially he just sits back and proudly watches the housing bubble inflate whilst continuing to rubberstamp farcical 0.5% interest rates and spouting his mickey mouse forward guidance.

In fact the biggest decision Carney and his overpaid chums have to make is which selection of biscuits they want at their monthly MPC meetings.

getmore4less

wage inflation will be the driver.

just like when rates were 10%+ 3-4 pay rises a year sorted out the payment you just had to ride out a few months.

it's low inflation that stopped things being worse.

HAMISH_MCTAVISH

demontfort wrote: »

he just sits back and proudly watches the housing bubble inflate.

There is no housing bubble.

Just a shortage of houses, which will inevitably drive prices up due to sound fundamentals, not speculative mania.

Where prices rises are cause by a genuine imbalance between supply and demand, it is by definition, not a bubble.

MortgageAnxiety

Hamish - thank you, a superb overview.

HOWEVER... What happens if we go the other way?

I have been reading a lot about the debt ceiling in the US and the prospect of them defaulting. With a default I understand this will have global ramifications and cause an unprecedented rise in interest rates in the US and presumably the UK?

I concede that I do not fully appreciate how this will work or impact on the UK, but from what I have read...

US bonds become higher risk - fewer buyers - rates rise to make more attractive - recession

OR

US bonds are sold off - US buys more (QE) - rates held low - US bankrupts itself.

How would these impact on the UK?

HAMISH_MCTAVISH

There is no prospect of a debt default in the USA.

The tea party nutters have been absolutely humiliated in a total defeat, and the Republicans now risk losing 37 seats and control of the lower house in the mid-terms due to an unprecedented swing in the polls.

The public are angry at the pointless, political, partisan, games being played, and overwhelmingly blame the republican party

Thrugelmir

MortgageAnxiety wrote: »

Hamish - thank you, a superb overview.

HOWEVER... What happens if we go the other way?

I have been reading a lot about the debt ceiling in the US and the prospect of them defaulting. With a default I understand this will have global ramifications and cause an unprecedented rise in interest rates in the US and presumably the UK?

I concede that I do not fully appreciate how this will work or impact on the UK, but from what I have read...

US bonds become higher risk - fewer buyers - rates rise to make more attractive - recession

OR

US bonds are sold off - US buys more (QE) - rates held low - US bankrupts itself.

How would these impact on the UK?

First sign of madness. Talking to yourself. .........:eek: