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TheCountOfNowhere

Raising Interest Rates wont help...honest

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Bank of England warns of consumer spending squeeze

http://www.bbc.co.uk/news/business-39880844

 

"The Bank said the expected overshoot in inflation to 2.7% this year was "entirely" due to the impact of weak sterling and that raising interest rates would not be an effective way of tackling the increase in living costs."

 

 

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20 hours ago, TheCountOfNowhere said:

Bank of England warns of consumer spending squeeze

http://www.bbc.co.uk/news/business-39880844

 

"The Bank said the expected overshoot in inflation to 2.7% this year was "entirely" due to the impact of weak sterling and that raising interest rates would not be an effective way of tackling the increase in living costs."

 

 

Wheres the like button? 

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3 minutes ago, AvoidDebt said:

The other one is: a house price crash won't make it easier for people to buy. 

Ha ha ! I've heard that one too.

Here's the full version: 

A house price crash won't make it any easier for FTBers to purchase property because a HPC will mean that the banks' credit spigot will shut tighter than a fish's a***hole blah blah blah, it will mean a general recession/depression whereby people won't be able to pay their monthly mortgage payments because they will all lose their jobs or have their working hours cut blah blah blah and they won't have any money blah blah, it will mean consumer confidence is smashed and nobody will invest in new businesses in the country blah blah blah

So strap yourself in and support HPI forever because TINA, blah blah. blah

Just writing it makes you wonder how anybody could possibly believe this horsesh*t.

And yet so many do. Morons.

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2 hours ago, Society of fools said:

Just writing it makes you wonder how anybody could possibly believe this horsesh*t.

And yet so many do. Morons.

They dont have a choice, unless they want to rent until retirement. You beleive and pay up, or you watch the price of housing go up up up.

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interest rate rises, are u crazy? with this market? no, u guys are crazy, the mafia made the local councils take some insane leverage positions and if they raise rates they are gona bankrupt every council in the uk. has the average price of a house hit stamp duty yet? no, so expect rates 2 drop fools, we need 2 keep the plates spinning until the budget is balanced and average house sales hit stamp duty.

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Raising rates sinks the economy. Emptied the wifes isa yesterday as she was getting a mighty 0.05 as her deal had ended.

Moved to another saver account where its a whopping 0.65 but it isn't an ISa. For lower rate tax payers unless you earn over 1000 a year in interest isa are pointless. Given the low rates getting 1k a year in interest stills near impossible without perhaps having a couple hundred grand.

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15 hours ago, TheCountOfNowhere said:

Bank of England warns of consumer spending squeeze

http://www.bbc.co.uk/news/business-39880844

 

"The Bank said the expected overshoot in inflation to 2.7% this year was "entirely" due to the impact of weak sterling and that raising interest rates would not be an effective way of tackling the increase in living costs."

 

I saw that too - it made me wonder what they DO think would be an effective way of tackling the increase in living cost... because it seems like their only thoughts on that front are to "look through inflation" which to me just sounds more like pretending it isnt happening, I'm sure that will work out just fine

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Probably the same being repeated on R4 Today programmes' business section, when it was said that an interest rate hike would hit consumer spending.

I thought how times had changed now that spending relies upon credit to the cash poor. The cash rich in contrast, who would spend with real money, would be most likely encouraged to spend by an interest rate rise.

So we keep encouraging spending on credit while stifling spending with cash.

I did find Carney's passing comment that 'when interest rates rise they may rise faster than people expect' was notable, however. 'Put out there' perhaps so that the BoE can say "I told you so", should they need an excuse for pain.

Edited by LiveinHope

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18 hours ago, Society of fools said:

Ha ha ! I've heard that one too.

Here's the full version: 

A house price crash won't make it any easier for FTBers to purchase property because a HPC will mean that the banks' credit spigot will shut tighter than a fish's a***hole blah blah blah, it will mean a general recession/depression whereby people won't be able to pay their monthly mortgage payments because they will all lose their jobs or have their working hours cut blah blah blah and they won't have any money blah blah, it will mean consumer confidence is smashed and nobody will invest in new businesses in the country blah blah blah

So strap yourself in and support HPI forever because TINA, blah blah. blah

Just writing it makes you wonder how anybody could possibly believe this horsesh*t.

And yet so many do. Morons.

No one will benefit from house prices falling, it's a catch 22 I'm afraid - average mumsnet poster.

I did benefit from the small falls a few years ago, but still i bought expecting them to half...not go up almost 40%

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1 hour ago, stuckin2up2down said:

No one will benefit from house prices falling, it's a catch 22 I'm afraid - average mumsnet poster.

Interestingly, I remember this kind of " keep the Ponzi alive- its better than living in reality" sentiment being common when I was trading in Eastern Europe in the '90's.

Back then, in places like the Ukraine and Rumania Ponzi investment schemes were very common, with the average punter not having much idea of what constituted a realistic investment return and what was simply too good to be true.

But I do very specifically remember the Rumanian public reaction when one such Ponzi scheme collapsed in Bucharest after 4 or 5 rip roaring years. A bunch of losers in this scheme actually banded together and sued the Rumanian government to compensate them for their losses from the taxes that the government had garnered from said Ponzi over the previous half decade when it was supposedly making huge profits. The Tax sum garnered from the Ponzi concerned was quite substantial, so there was definitely a pile of cash lighting up the plaintiffs eyes.

The Rumanian courts threw the case out and said the government was entitled to keep 100% of the taxes gathered even from a fraudulent investment scheme.

I remember the case, because it struck me at the time how you'd truly have to have some brass balls to try that kind of court case, but 20 years later, I don't think that kind of sentiment is that different from what you see from Property investors these days.

The first reaction of many of them to seeing any kind of potential loss is to look for somebody, somewhere, ( usually those who completely avoided being involved in their folly) to try and make them financially whole.

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20 hours ago, AvoidDebt said:

The other one is: a house price crash won't make it easier for people to buy. 

It make it easier for me to buy, thats all that matters.

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4 hours ago, stuckin2up2down said:

No one will benefit from house prices falling, it's a catch 22 I'm afraid - average mumsnet poster.

Sorry but this is complete and utter b*ll*cks. There wider economic benefits of cheaper housing are absolutely massive and vastly out weight the loss of asset capital especially in the longer term. Incase you handle noticed our economy is literally being hollowed out by high housing costs and at some point this must be reversed or we face economic ruin.

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This article is typical BBC misinformed opinion and full of typical BBC bias. Its just due to the weak pound, bs!

Putting up rates to a decent normal level is the only way to go.

Edited by bear.getting.old

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On 12/05/2017 at 3:05 PM, Society of fools said:

Interestingly, I remember this kind of " keep the Ponzi alive- its better than living in reality" sentiment being common when I was trading in Eastern Europe in the '90's.

Back then, in places like the Ukraine and Rumania Ponzi investment schemes were very common, with the average punter not having much idea of what constituted a realistic investment return and what was simply too good to be true.

But I do very specifically remember the Rumanian public reaction when one such Ponzi scheme collapsed in Bucharest after 4 or 5 rip roaring years. A bunch of losers in this scheme actually banded together and sued the Rumanian government to compensate them for their losses from the taxes that the government had garnered from said Ponzi over the previous half decade when it was supposedly making huge profits. The Tax sum garnered from the Ponzi concerned was quite substantial, so there was definitely a pile of cash lighting up the plaintiffs eyes.

The Rumanian courts threw the case out and said the government was entitled to keep 100% of the taxes gathered even from a fraudulent investment scheme.

I remember the case, because it struck me at the time how you'd truly have to have some brass balls to try that kind of court case, but 20 years later, I don't think that kind of sentiment is that different from what you see from Property investors these days.

The first reaction of many of them to seeing any kind of potential loss is to look for somebody, somewhere, ( usually those who completely avoided being involved in their folly) to try and make them financially whole.

People the world over are deluded. Some BTL people I know in london are bordering on insanity, still on IO short fixes and constant re-mortgaging - they are literately months away from being bankrupt with any tiny change.

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On 2017-5-12 at 3:38 PM, goldbug9999 said:

It make it easier for me to buy, thats all that matters.

me also

if 100k can appear out of thin air since 2015 it can disappear as fast.

 

 

 

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5 hours ago, stuckin2up2down said:

People the world over are deluded. Some BTL people I know in london are bordering on insanity, still on IO short fixes and constant re-mortgaging - they are literately months away from being bankrupt with any tiny change.

I had a brief discussion (again) with my new landlord yesterday. Apparently, she's been in this business for 25+ years, owns a huge portfolio (all in her name, not incorporated) and is not worried in the slightest about tax changes. Also, not planning to sell, as "CGT would kill her".

I don't know about her other properties, but I pulled title deed from Land Registry and there's a mortgage charge at least on the one I'm renting. Bought in 2000 and charged in 2007, so probably a lot of equity released there. I just don't get it. I would have trouble sleeping at night.

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35 minutes ago, kibuc said:

I had a brief discussion (again) with my new landlord yesterday. Apparently, she's been in this business for 25+ years, owns a huge portfolio (all in her name, not incorporated) and is not worried in the slightest about tax changes. Also, not planning to sell, as "CGT would kill her".

I don't know about her other properties, but I pulled title deed from Land Registry and there's a mortgage charge at least on the one I'm renting. Bought in 2000 and charged in 2007, so probably a lot of equity released there. I just don't get it. I would have trouble sleeping at night.

They all think they will get bailed, not jailed.

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6 hours ago, stuckin2up2down said:

People the world over are deluded. Some BTL people I know in london are bordering on insanity, still on IO short fixes and constant re-mortgaging - they are literately months away from being bankrupt with any tiny change.

and

43 minutes ago, kibuc said:

I had a brief discussion (again) with my new landlord yesterday. Apparently, she's been in this business for 25+ years, owns a huge portfolio (all in her name, not incorporated) and is not worried in the slightest about tax changes. Also, not planning to sell, as "CGT would kill her".

I just don't get it. I would have trouble sleeping at night.

This insanity/delusion/groupthink is what very much keeps the Property Ponzi alive. The rapid prices rises seem to have literally deprived people of elementary calculating ability.

I had a chat with my Sydney-based sister in law a few weeks ago. She has moved into her third house in 12 years, having moved up from a $400,000 AUD house to a $750,000 AUD house and now lives in a $1,250,000 AUD house. ( And this is in a Western Sydney dump of a suburb). I asked her if she expected this to be her last house, and her (completely serious) response was:

" Oh, no, in 7 or 8 years this house will be worth $2 million AUD, and we'll probably move again then."

It just beggars belief to listen to it, and begs the obvious riposte, umm, since most Australian households don't earn anything like that sum in an entire lifetime, particularly in Western Sydney, what makes you think anybody would possibly pay that much for a house ?

Its like people are on drugs. They definitely need a spell of cold turkey.

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4 minutes ago, Society of fools said:

" Oh, no, in 7 or 8 years this house will be worth $2 million AUD, and we'll probably move again then."

She might be right, though. What she forgot to factor in was that a loaf of bread might cost $10k by then ;)

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2 hours ago, kibuc said:

I had a brief discussion (again) with my new landlord yesterday. Apparently, she's been in this business for 25+ years, owns a huge portfolio (all in her name, not incorporated) and is not worried in the slightest about tax changes. Also, not planning to sell, as "CGT would kill her".

I don't know about her other properties, but I pulled title deed from Land Registry and there's a mortgage charge at least on the one I'm renting. Bought in 2000 and charged in 2007, so probably a lot of equity released there. I just don't get it. I would have trouble sleeping at night.

so if her house is repo'd and you are the tenant, where does that leave you?

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14 hours ago, crazypabs said:

so if her house is repo'd and you are the tenant, where does that leave you?

In the market for a new place, I suppose.

I'd be happy to buy it at 50% of it's current price, though :D

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On 11/05/2017 at 7:03 PM, AvoidDebt said:

The other one is: a house price crash won't make it easier for people to buy. 

Yer I'm thinking that as well.  Even when inflation was 6% wasn't exactly helping me saving.

Solder at work starts on about her problems:  "All I've got is the house - I've got CCJ's coming out of my ears".  I doubt when rates up and prices crash it will change for her

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No debt, no savings that grow, don't pay rent, don't collect rent...... share, swap, help and support then no money, debt or credit interest need pass hands.......creating more and more devaluing money only sees it pushed out at the top and flow into and out of property, land, stocks,shares,bonds,fine wine, gold, timepieces, art, diamonds etc...the price of none of it denotes any kind of value, just the gamble of the day......other than that pick out the needs and wants and charge the highest price the market will take......the market can't take it if the money can't be earned or borrowed, or given out to spend (benefits).....or people don't want or need it.;)

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