We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
Interest Rates - BoE should cut them or the governer should go!
Comments
-
At the moment high interest rate increases inflation as it dumps economy
So at 5% currently it's too high, but it was too low for too long?Mr King [...] understands that he [...] is a cause of many problems - that the interest rate was too low for too long and that it caused housing bubble.
With the exception of Feb 2003 - Feb 2004, it hasn't been below 4% in the last 30 years! Even in 2004 it was at 3.5% for only 4 months. So this radical cut in interest rates that you propose is needed can't be very big, as (according to you) the difference between a high interest rate and a low interest rate is no more than 1.5%.0 -
The Bank of England yesterday reversed its decision to end an emergency lending scheme for banks next month, citing the turmoil in money markets this week since Lehman Brothers collapsed.
A very long horizon, what do you think? Good enough to take care of BoE?
http://www.guardian.co.uk/business/2008/sep/18/bankofenglandgovernor.banking0 -
King is earning the wrath of this government because he is the only person standing in the way of all sorts of lunatic bailout schemes which would sell not just your future, but your children into slavery by both inflation and taxes to support this mob - including the bankers, thier lunatic losses and fake profits, and artifically try to inflate housing market credit again, which people close to this government, like all the Labour MPs about to lose thier seats are demanding.
For example - Will Hutton (A new labour insider) is constantly popping up on the news and claiming the end of the world is about to occur (utter utter nonsense) - with us all ending up eating worms, or each other, in a doomsday that will be worse than the 1930s depression etc... UNLESS, xxx bank, and its directors are given endless taxpayer bailouts and guarantees, added to the national debt like a banana republic, all to start selling lier loan mortgages again, to get the one way property bet - thie governments 'wealth machine' going again..
Wrong, it is other way around! If you get it your way, it will repeat 90's and 160.000 families that lost their homes, probably more this time. It is the game as old as stock markets - get everybody hooked selling them at high prices, then crash the market and buy back at much lower.Interest rates don't matter - because the extension of credit will never be as mad again, so asset prices must fall to more reasonable levels. In this process, credit must get tighter until sanity in housing is restored. If the BOE cut interest rates to 2%, a run on the pound would occur. .
If the inflation eats excess price, it may avoid price crash and repossessions. And if you haven't noticed yet, a run on the sterling already occurred!
As I explained, Mr King is a part of the problem, not of any solution. And this game with inflation is only because he doesn't have anything else to show as his legacy!0 -
If the inflation eats excess price, it may avoid price crash and repossessions. And if you haven't noticed yet, a run on the sterling already occurred!
As I explained, Mr King is a part of the problem, not of any solution. And this game with inflation is only because he doesn't have anything else to show as his legacy!
Why do you want to stop house prices crashing? It has to crash so ftb's can get on the market, house prices have been abnormal for years, a super bubble that has now popped. Do you not want ftb's owning their own house anymore? Just because someone has paid £200,000 for a house it doesn't mean it's worth £200,000.
Yes there will be pain but if people would of turned round and stopped buying into this madness, (house prices only ever go up by £1000's every month) then we wouldn't be in the situation we are in now.0 -
It should all go to the pan, we need to learn and start again!"Banking establishments are more dangerous than standing armies." Thomas Jefferson
"How can I believe in God when just last week I got my tongue caught in the roller of an electric typewriter?" Woody Allen
Debt Apr 2010 £00 -
If you have read this thread, you would have seen exactly that as the interest rate is relative to economic growth. It was too low ue to cheap imports (and somebody (GB) thought it was a good idea to support property investments as personal pension funds); now it is too high (due to not any more cheap imports and still high price of oil), economy is weak (and another person will like it to see it even weaker (MK)) so it should be smaller. Simple proof - bubbles that burst. p.s. You can argue that huge increases in salaries for jobs supplied by the Government and huge increases in numbers with all benefits (buy 5-bed house, pay for 3) helped fuelled this crises.So at 5% currently it's too high, but it was too low for too long?
With the exception of Feb 2003 - Feb 2004, it hasn't been below 4% in the last 30 years! Even in 2004 it was at 3.5% for only 4 months. So this radical cut in interest rates that you propose is needed can't be very big, as (according to you) the difference between a high interest rate and a low interest rate is no more than 1.5%.0 -
Why do you want to stop house prices crashing? It has to crash so ftb's can get on the market, house prices have been abnormal for years, a super bubble that has now popped. Do you not want ftb's owning their own house anymore? Just because someone has paid £200,000 for a house it doesn't mean it's worth £200,000.
Yes there will be pain but if people would of turned round and stopped buying into this madness, (house prices only ever go up by £1000's every month) then we wouldn't be in the situation we are in now.
Read again. I am not against house prices falling, I am against crash. And the crash already happened, it can become only worse.
10% fall in absolute terms + 5% inflation + 10% fall in sterling = calculate yourself using whatever system you want.
If the crash happen, it will overshot. A lot of families will not be able to find deals so they will lose houses. And so on... then in 5,10, 15 years there will be another rush, another house price bubble and so on...
If the price of houses stagnate for 4-5 years, inflation will eat their values.
Second reason - the whole British economy depends on housing market (because of some "smart" ideas...). Kill the market and it will kill economy. FTB will not have jobs, nobody will offer them deals without guarantee.
You want that?!0 -
True super.
They are all to worried that the banking system will collapse.
Imagine all the bank accounts and direct debits etc!"Banking establishments are more dangerous than standing armies." Thomas Jefferson
"How can I believe in God when just last week I got my tongue caught in the roller of an electric typewriter?" Woody Allen
Debt Apr 2010 £00
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 354.6K Banking & Borrowing
- 254.4K Reduce Debt & Boost Income
- 455.5K Spending & Discounts
- 247.4K Work, Benefits & Business
- 604.3K Mortgages, Homes & Bills
- 178.5K Life & Family
- 261.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.7K Read-Only Boards