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McKinsey: UK households GAINED $1.1 Trillion from crisis
HAMISH_MCTAVISH
Posts: 28,592 Forumite
http://www.mckinsey.com/insights/economic_studies/qe_and_ultra_low_interest_rates_distributional_effects_and_risksAn Increase In Wealth Would More Than Offset Lost Interest Income For Households
"In the United Kingdom, household wealth may have increased by $1.1 trillion as a result of ultra-low interest rates, with an estimated 89 percent coming from housing, 10 percent from bonds, and 2 percent from equity."
So much for QE and ZIRP making us all poorer.
“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”
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”
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Comments
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Can you explain this further?
Is it suggesting $1T saving on mortgage interest payments?0 -
HAMISH_MCTAVISH wrote: »
So much for QE and ZIRP making us all poorer.
What porportion of the benifit of falling interest payments can be attributed to QE ZIRP etc considering that rates worldwide fell for a good 15-20 years before the crash and nations which did not do QE also saw pre and post 2007/8 recession falls in rates?
falling rates imo is a function of an advancing economy and is largely intrinsic and not to do with QE etc so bankers taking credit from what is the result of all business and tech and invention and innovation0 -
Can you explain this further?
Is it suggesting $1T saving on mortgage interest payments?
In a nutshell....
Borrowers gained more than savers lost when looking at just lending rates from banks.
Savers lost more than borrowers gained when you also include income from pensions and bonds.
But when you include everything....
Savers, borrowers, asset values, pensions, equities, etc....
The net gain to UK households was $1.1 Trillion.“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 -
So is this saying that zirp/qe prevented the value of the UK housing stock falling by an additional 1 trillion...some on here would have welcomed that despite the economic hardship that would have ensued.I think....0
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All it's saying is that qe propped up house prices. Viewing higher house prices as equating to higher living standards in aggregate is very dubious.FACT.0
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the_flying_pig wrote: »All it's saying is that qe propped up house prices. Viewing higher house prices as equating to higher living standards in aggregate is very dubious.
Good job property can't be dumped on the market as easily as shares. The true value would soon be recognised."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
THE_MASHED_TULIP wrote: »Good to see the truth posted and not the usual bitter twisted fantasy make believe scarmongering the goons want to post.
f you repeat a lie often enough, people will believe it, and you will even come to believe it yourself."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Houses prices weren't propped up, the economy was. There's not even a subtle difference.grizzly1911 wrote: »f you repeat a lie often enough, people will believe it, and you will even come to believe it yourself.0 -
The implications are obvious.
We should ask all global institutions to engineer another global financial crash. That way, we'll get another £1.1 Trillion increase in wealth.
... large gin & tonics all round....:rotfl:0 -
Seems it just shifted wealth to those that already owned property. Whether that is a good or bad thing is open to discussion.0
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