How the pound in your pocket has vanished

[scooterscot]

Question does not compute

Aye, a says, sae explain tae me hoo it is canada hae avoided thes crisis whist maintainin' a regulated financial industry?

[SpontaneousOrder]

Aye, a says, sae explain tae me hoo it is canada hae avoided thes crisis whist maintainin' a regulated financial industry?

Some muggers shoot their victims in the face. Other muggers don't. I see no paradox.

[alreadypacked]

Aye, a says, sae explain tae me hoo it is canada hae avoided thes crisis whist maintainin' a regulated financial industry?

What other langagues can you speak

[scooterscot]

What other langagues can you speak

Mah lingo haes git th' gchq servers pure burnin` a nook in th' ground. Tis na wonder thay cuid ne'er intercept a scots invasion, lik'.

[OwlHoot]

Deregulation? The banks were strong-armed into lending to 'sub-prime' borrowers. That sounds like the opposite of deregulation to me.

This is very true, especially in the US, going back to Carter and even Reagan.

So arguably Gordon Brown was right in saying that "it started in America"

[Zero Liability]

So explain to me how it is Canada have avoided this crisis whist maintaining a regulated financial industry?

What makes you think it did? The US and UK both have highly regulated financial industries and activist central banks yet had one, so how is it a differentiator anyway?

Something else to bear in mind is that Canada - and Australia - are commodities exporters, and this category of goods soared a bit after the crisis. This cushioned the blow for them but that is now reversing. However, they have kept much quieter about the support the government provided their banking industries.

This is very true, especially in the US, going back to Carter and even Reagan.

So arguably Gordon Brown was right in saying that "it started in America"

With one caveat - the US arms of British banks also participate in their version of open market operations.

The US is to blame for the global spread of credit expansion but it's not like politicians and central bankers here and elsewhere didn't actively resort to and encourage it and benefit from it whilst the good times were upon us.

[petergriffin]

The so called "pound in your pocket" is only 3% of the entire money supply. The rest is bank-created and about 30% of it goes into house prices (source: BoE 2012, I don't have the link handy but I could try).

Edit: according to the former head of the FSA, it's 75%:
http://blogs.independent.co.uk/2012/...-so-expensive/

[SpontaneousOrder]

If house prices are limited only by how much banks are willing to lend, and the amount banks are willing to lend is predicated on the government's promise of tax-payer funded bail-outs, then house prices are limited only by the extend to which the government is happy to see them rise.

The banks are a bit of a red-herring in all of this.

[minestrone]

Clinton dicking around with the community reinvestment act got the ball rolling, he forced the banks to lend sub prime. IIRC McCain and Bush tried to get the changes reverted but the Democrats with Obama blocked it.

Lawyers should never be allowed to run for any office in any place in the world.

[Sysman]

If house prices are limited only by how much banks are willing to lend, and the amount banks are willing to lend is predicated on the government's promise of tax-payer funded bail-outs, then house prices are limited only by the extend to which the government is happy to see them rise.

The banks are a bit of a red-herring in all of this.

As I see it the banks have been acting as government agents with regard to house prices.