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Mortgage Rates Rise

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http://www.zerohedge.com/article/mortgage-rates-go-parabolic

It wont be long now. Once mortgage rates start rising over here, as they will, we will get our house price crash.

Rising rates will cause the crash in so many ways.

A ) The goverment will have to cut its deficit, reducing HB and closing SMI, it will have no choice.

B ) Plug in higher rates into affordability equations, and you get less money that you can borrow.

C ) The incentive for banks to repossess those behind on their mortgages becomes a lot bigger with higher interest rates.

D ) More people who have mortgage rates wont be able to afford them, just at a time when the government safety net goes.

Here it comes. No doubt about it, if these rising rates continue for even a little bit longer, the crash will finally be upon us.

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Can they QE to buy all outstanding debt i wonder..........?

Can they do the monster of all paper shuffles, so create enough 000000000000000000's on that screen to buy up all treasuries, own the debt markets, would this be an end to FIAT though? Is this the BenBershuffles plan.......

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Can they QE to buy all outstanding debt i wonder..........?

Can they do the monster of all paper shuffles, so create enough 000000000000000000's on that screen to buy up all treasuries, own the debt markets, would this be an end to FIAT though? Is this the BenBershuffles plan.......

This is a similar question as I asked in another thread, but if they did this, who would end up with all the money?

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This is a similar question as I asked in another thread, but if they did this, who would end up with all the money?

Yes, they could buy up all the government debt this way.

And the money would belong to whoever had previously owned the government debt.

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Yes, they could buy up all the government debt this way.

And the money would belong to whoever had previously owned the government debt.

So they the Fed own the debt, they set rates, they own the press, the new money is owned in pension funds, investment funds etc. The FED drives rates to zero, the new money loses value relative to cost inflation per annum. The new money creates a new bubble in another asset class. But this new money is looking for yield, it does not enrich the working class by way of wage inflation. Zero yields, below cost wage inflation, asset bubbles everywhere, who is the winner?

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So they the Fed own the debt, they set rates, they own the press, the new money is owned in pension funds, investment funds etc. The FED drives rates to zero, the new money loses value relative to cost inflation per annum. The new money creates a new bubble in another asset class. But this new money is looking for yield, it does not enrich the working class by way of wage inflation. Zero yields, below cost wage inflation, asset bubbles everywhere, who is the winner?

I think that the theory behind this is that with all the printing, people will fear holding money, and also only buy assets that offer a very good rate of return. With no bonds to buy, and stock prices to high to be worth bothering with, what will people do?

That leaves people little option, but to spend their money on consumption, which one would hope increases demand in the economy, creating jobs and output.

The danger is if people still dont want to spend the money consuming things, but instead rush headlong into buying assets, creating inflation in those assets, and perhaps even reaching the point when they dont want to accept the fiat money as payment for things anymore.

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I think that the theory behind this is that with all the printing, people will fear holding money, and also only buy assets that offer a very good rate of return. With no bonds to buy, and stock prices to high to be worth bothering with, what will people do?

That leaves people little option, but to spend their money on consumption, which one would hope increases demand in the economy, creating jobs and output.

The danger is if people still dont want to spend the money consuming things, but instead rush headlong into buying assets, creating inflation in those assets, and perhaps even reaching the point when they dont want to accept the fiat money as payment for things anymore.

Interest rates on bonds rising sharply, in Europe and the US. Mortgage rates have to follow. More days like this, and the perfect storm will hit the housing market.

This really looks like the real deal.

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Can this be the long awaited bond bubble going pop.

Surely, i know i will not call you shirly again, but surely, negative returns on paper/bonds, has to put a down ward pressure on prices, sooner or later risk has to re-enter, a flight from bonds chasing yield, forcing up returns...........

I mean CPI 3.3%, REAL CPI +5%, 10 YEAR 3%...............SOMETHING WRONG, ITS NOT THAT UNSAFE OUT THERE?

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we will see rate rises without a rate (BOE) rise.

Part 1 of unfair UK was the did/didn't buy a house at the right time

Part 2 is did/didn't lock into a lifetime tracker at the right time.

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Sharp rise in ten year notes, up 17 bps today.

Things are beginning to simmer. Thank God Ben comes up with a new batch of cash tomorrow to mop up some of that trash.

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I think that the theory behind this is that with all the printing, people will fear holding money, and also only buy assets that offer a very good rate of return. With no bonds to buy, and stock prices to high to be worth bothering with, what will people do?

That leaves people little option, but to spend their money on consumption, which one would hope increases demand in the economy, creating jobs and output.

The danger is if people still dont want to spend the money consuming things, but instead rush headlong into buying assets, creating inflation in those assets, and perhaps even reaching the point when they dont want to accept the fiat money as payment for things anymore.

That is a lot of the plan. When the opportunity is small but savings gigantic eventually real risk adjusted yield must go negative. So zero risk instruments must go negative in real terms. Since they can't actually push them well into the negative inflation must be created. Japan was never willing to do this for various reasons, so the adjustment never took place. Actually it got worse.

Asset inflation only goes so far. Because even if you buy say a piece of property for triple what it was a decade ago, the person who gets the money still faces the problem of what to do with the money. And the yield available on the asset doesn't change. They can run from the inflation monster for awhile, but ultimately must succumb and start consuming.

The state has an extremely powerful way to force people to accept fiat. And that is simply to demand taxes be paid in their fiat. Pay them X amount of their fiat on your property tax this year. Or they seize the property.

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  • 312 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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