Originally posted by centurian
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Reply to: House Prices stable - yeah right
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Previously on "House Prices stable - yeah right"
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Originally posted by DimPrawn View PostEarly 90's interest rates 15%
Base rates were at 12% for a few hours. The highest they were for any substantial period of time was 10%.
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Originally posted by AtW View PostDepends who sells paper tulip for real cash to cretins at BoE.
If it's Govt that sells bonds then this money go into Govt spending and keep interest rate on bonds low by making up for lack of demand from real investors.
If it's banks of all sorts that sell tulip "AAA" assets in exchange for real cash then this money will end up on commodities markets to make said banks big $$$ that they will repay as bonuses to employees where as everyone else will keep paying the price in higher inflation.
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Originally posted by Freamon View Post...which will go straight into bank reserves and no further (as the previous £200bn has done).
If it's Govt that sells bonds then this money go into Govt spending and keep interest rate on bonds low by making up for lack of demand from real investors.
If it's banks of all sorts that sell tulip "AAA" assets in exchange for real cash then this money will end up on commodities markets to make said banks big $$$ that they will repay as bonuses to employees where as everyone else will keep paying the price in higher inflation.
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Originally posted by TimberWolf View PostFew people support that view. AFAIK most economic experts consider QE equivalent to printing money.
In March 2009, the Monetary Policy Committee announced that, in addition to setting Bank Rate at 0.5%, it would start to inject money directly into the economy in order to meet the inflation target [comment: i.e. increase it]. The instrument of monetary policy shifted towards the quantity of money provided rather than its price (Bank Rate). But the objective of policy is unchanged - to meet the inflation target of 2 per cent on the CPI measure of consumer prices. Influencing the quantity of money directly is essentially a different means of reaching the same end.
Significant reductions in Bank Rate have provided a large stimulus to the economy but as Bank Rate approaches zero, further reductions are likely to be less effective in terms of the impact on market interest rates, demand and inflation. And interest rates cannot be less than zero. The MPC therefore needs to provide further stimulus to support demand in the wider economy. If spending on goods and services is too low, inflation will fall below its target [comment: can't have that can we!].
The MPC boosts the supply of money by purchasing assets like Government and corporate bonds – a policy often known as 'Quantitative Easing'. Instead of lowering Bank Rate to increase the amount of money in the economy, the Bank supplies extra money directly. This does not involve printing more banknotes. Instead the Bank pays for these assets by creating money electronically and crediting the accounts of the companies it bought the assets from. This extra money supports more spending in the economy to bring future inflation back to the target.
Bank of England | Monetary Policy | Quantitative Easing Explained
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Originally posted by Freamon View Post...which will go straight into bank reserves and no further (as the previous £200bn has done).
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Originally posted by DimPrawn View PostThis govt will not allow house prices to fall much. We'll see a helicopter drop of cash before then, or govt mortages interest free for life. Too many Tories have massive BTL portfolios for them to do otherwise.
Buy and relax.
Infact buy 1000 BTL house, and be even more relaxed nothing can go wrong and you're children will inherit a fortune.
Perma boom.
But you were right about Krusty.
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Originally posted by The Agents View View PostTis swings and roundabouts. Buy a house and it will go up in value. Maybe not immediately, and it might take a drop before it goes up, but ultimately, it will always go up. It's completely immaterial as well - once you're on the ladder, prices going up and down make no difference at all - unless you have two places to live, you're always going to need a house, which means your gains just get passed down the chain.....
If you don't want to move any time soon, you're fine - the only difference you'll see is mortgaging options shrinking the further away you get from having 20% collateral in the property.....
Buy and relax.
Infact buy 1000 BTL house, and be even more relaxed nothing can go wrong and you're children will inherit a fortune.
Perma boom.
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Originally posted by NorthWestPerm2Contr View Postinteresting discussion here. I always end up more confused though as every side appears to have a good argument... in the end only time will tell I guess.
If you don't want to move any time soon, you're fine - the only difference you'll see is mortgaging options shrinking the further away you get from having 20% collateral in the property.....
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interesting discussion here. I always end up more confused though as every side appears to have a good argument... in the end only time will tell I guess.
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Originally posted by nomadd View PostYes, buy now, at the end of the biggest boom in history. When house prices are already falling. And the banks have turned off the money taps (as they never had the money in the first place...) Oh, and this mornings news reports that 50% of EAs have disappeared since 2008.
House price boom? Buy now? I think not.
Ps. Been watching one property in the NW that's already had £70k trimmed off in the last 9 months alone. Still unsold. And a long way further to fall.
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Originally posted by nomadd View PostYes, buy now, at the end of the biggest boom in history. When house prices are already falling. And the banks have turned off the money taps (as they never had the money in the first place...) Oh, and this mornings news reports that 50% of EAs have disappeared since 2008.
House price boom? Buy now? I think not.
Ps. Been watching one property in the NW that's already had £70k trimmed off in the last 9 months alone. Still unsold. And a long way further to fall.
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