Interest Rates going back up to normal levels again?

GreatApe

AG47 wrote: »

If the green shoots story was true then interest rates would be back to normal

Negative rates are now and at least for the next 10 years the normal

MobileSaver

Crashy_Time wrote: »

And much to the frustration of those trying to sell houses ... sales are plummeting, it is classic bubble/ponzi theory in action

Crashy, that statement is blatantly not true and is pretty pathetic even by your low standards. Seasonally adjusted house sales over the last 18 months are static at just over 100,000 each and every month.

westernpromise

Crashy_Time wrote: »

And much to the frustration of those trying to sell houses for bubble prices + 20%.....:rotfl: All that is happening as banks tighten is that sales are plummeting, it is classic bubble/ponzi theory in action

The people who must be really frustrated are those who shorted property 20 years ago thinking to buy back in cheap after a crash that never came, and who now need prices to collapse to below £0 to break even.

They're the ones I feel sorry for, but fortunately, nobody's so catastrophically stupid as to speculate in the price of the roof over their head and end up financially ruined as a result, are they, Crashy?

michaels

MobileSaver wrote: »

Crashy, that statement is blatantly not true and is pretty pathetic even by your low standards. Seasonally adjusted house sales over the last 18 months are static at just over 100,000 each and every month.

I think that is too easy - what if you look regionally and plot volumes against price changes there may be a different picture - the ripples are still spreading out even as the centre is falling.

MobileSaver

michaels wrote: »

I think that is too easy

Are house sales "plummeting" as Crashy would have everyone believe? Categorically, no, they are not.

You can slice and dice it whichever way you want, you can perhaps pick on certain regions if you want to distort the figures to further your agenda but ultimately 100,000 properties are being bought and sold every month and that figure hasn't changed in the last 18 months. It really is that easy!

AG47

GreatApe wrote: »

Negative rates are now and at least for the next 10 years the normal

There is no way negative interest rates can last for that long, if this was the case then nobody would save at all because it would be costing them and everybody would be in debt as much as possible because you get paid to be in debt

The world has too much debt right now, either the system collapses or debt needs to be reduced and interest rates going up is the only option

AG47

Filo25 wrote: »

Rates held at 0.5% on a 7:2 vote, it will be interesting to see the comments as always.

I would imagine 2 increases to 1.0% by the end of the year is still viewed as the most likely outcome.

There is just no knowing for sure how much they will rise, or how long it will take to get back to normal,

The only thing to know for sure, is that they are going back up.

westernpromise

You keep saying "normal" as though there's some "normal" rate we all agree on. I bet you think "normal" is 10% or so, am I right? If so I have bad news for you - rates have only been above 10% in 20 of the last 300 years and all of them were between 1970 and 1995.

Your idea of normal is probably a level that was an ephemeral aberration in itself.

I'd assume mortgage rates of 3 to 4% for the indefinite future / a standard mortgage term starting from here, if I were you.

GreatApe

AG47 wrote: »

There is no way negative interest rates can last for that long

Why do you think that?
Savings have existed for millions of years before even humans existed.
When a crow or a squirrel saves food for the winter by burying it what is the return on that saving? Well they forget where they berried half of the things they bury so their savings rate is negative 50% yet millions of years of evolution seems to find a negative 50% savings rate acceptable but AG47 doesn't?

AG47 wrote: »

if this was the case then nobody would save at all because it would be costing them and everybody would be in debt as much as possible because you get paid to be in debt

Well yes I got into heavy debt millions because it costs me close to zero. I think my averaged cost over the last decade was 3.3% and inflation over the decade has been 2.8% so real rates have been 0.5% for me.

As for the other side of the coin who are the depositors that are willing to lend to the banks at zero? Well anyone with excess who spends less than they earn they only have bank accounts paying zero. They can opt to buy property or shares but they prefer the stability of 0% savings vs the risk of property or stocks.

What really needs to happen the smart thing to do is for people to spend more and save less or perhaps even just work and earn less. Why save so much when in one generations time almost all needs and wants will be free or close to zero cost.

The world has too much debt right now, either the system collapses or debt needs to be reduced and interest rates going up is the only option

You have it completely backwards!
There is too much SAVINGS right now.
People need to stop saving so much and spend more. If they dont then the only option is for rates to stay close to zero or even go negative.

GreatApe

The great thing about the west is that you either have capital or you can borrow it for free so long as you show the most basic of competency by paying back your free capital on time.