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Dames

Us Rates Up Yet?

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Down Down i am feeling down :lol:  :lol:  :lol:

You say that, and normally I'd agree, but in actual fact the £ has strengthened this weekagainst the $, and thats after our rate cut and the markets pricing in the Feds next increase.

Anyone care to suggest a reason why? I for one am confused.

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Anyone care to suggest a reason why? I for one am confused.

Because the fundamentals of the US economy are lousy, and the Chinese have little need to prop up the dollar anymore? America seems to have most of Britain's economic problems, only worse: about the only exception I know of is that their housing bubble isn't quite as out of control as ours.

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Because the fundamentals of the US economy are lousy, and the Chinese have little need to prop up the dollar anymore? America seems to have most of Britain's economic problems, only worse: about the only exception I know of is that their housing bubble isn't quite as out of control as ours.

OK, that sounds reasonable. Thanks. The problem is it goes against the points that were being made last week. Things like

"the BOE can't cut rates, we'd just import inflation."

"Oil and many imported goods are priced in dollars, if we cut rates import costs will go through the roof"

Or words to that effect.

Are these arguements invalid?

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Are these arguements invalid?

A good question. It does appear that we may see the dollar drop against the pound even though they're raising rates and we're cutting... it really is Whacko World right now.

That said, if the dollar drops, oil prices are likely to go higher in dollars, so the effect would be the same.

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the only exception I know of is that their housing bubble isn't quite as out of control as ours.

The US may be behind for now, but they're trying pretty hard to catch up.

The big difference in the states is that there is a real split between the coastal areas where population pressures are high and land is limited, and the vast central areas where more housing demand simply leads to urban sprawl.

So california, new york, florida etc have been racing away, while middle america hasn't been pulled along quite the same way as the regions in the UK.

When you have more than 30% of purchases being by self classified investors or speculators, and flipping becoming a national pastime, you have to worry. There seems to be a hint of the mania that only the americans can do properly (although we also did pretty well this time!).

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True: it might actually be a worse bubble, but disguised by the low prices in the land-rich areas reducing the average.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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