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John The Pessimist

Dt: Sub 1% Rates To 'help' Buyers.....

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If you can get a mortgage at a combined rate (mortgage interest + product fee + booking fee + valuation fee + solicitors fee...) for less than 2% that's great.

A lot of buyers that I know are financially illiterate and don't know that paying 4%+ for a mortgage is a good way of losing money in the long-term.

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Madman Kuroda offered us a presentiment of the future over night: ZIRP forever!


The BOJ is effectively pledging to hold ten year borrowing costs at around zero (the yield curve target) and to do this for quite some time (the inflation overshoot pledge). That is a strong signal that the government should follow through with fiscal stimulus — stimulus that effectively comes with no borrowing costs.

It’s not quite a monetary financing but it’s a step closer.

A pledge to overshoot a target you’ve consistently failed to hit isn’t especially credible. The macro impact of that pledge through expectations is unlikely to be large. But a pledge to finance government spending at zero per cent for the coming years could be a much bigger deal — even if it is only making explciit what has been implicit in Japan for quite some time.


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