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Sisyphus

Bernanke Tells Congress Fed May Need To Raise Rates To Restrain Inflation

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This is all happening too quickly.

The $ is strengthening, even though the BoE were hawkish.

I gave an anecdote a few month (after one of the hurricanes) ago from a friend in the US.

He said that his monthly outgoings had gone up by almost 2x over a period of a few months.

There are serious inflationary risks in the US at the moment, and we're certainly not immune from them.

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PROVIDED he doesn’t do anything silly, like decide to go hunting with Dick Cheney, Ben Bernanke will slip from the shadows to the global marketplace this week when he gives his inaugural speech as the World’s Most Powerful Man

:D better not go shooting grouse in Scotland with Gordon Brown either.

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Guest The_Oldie

Secondhand information......

My wife just phoned me to say that she is watching Bernanke on TV and he stated that US houseprices are dropping.

Edit: Ooops, sorry, it's in the Bloomberg article linked to above...

The new Fed chairman cited the slowing housing market as one risk to the expansion, although he said a ``moderate softening'' seemed more likely than a ``sharp contraction.''

``Some cooling of the housing market is to be expected and would not be inconsistent with continued solid growth of overall economic activity,'' Bernanke said. Still, ``prices and construction could decelerate more rapidly than currently seems likely.''

Sales volumes are slowing in the market for existing homes, and prices are lower for new dwellings. Sales of previously owned homes fell 5.7 percent to a 6.6 million annual rate of increase in December, the lowest since March 2004. Economists expect new home prices to slide another 1.5 percent next year, according to the consensus estimate from a survey by Blue Chip Economic Indicators, following a 3.5 percent decline this year. A record 1.282 million new homes sold in 2005.

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This is all happening too quickly.

The $ is strengthening, even though the BoE were hawkish.

I gave an anecdote a few month (after one of the hurricanes) ago from a friend in the US.

He said that his monthly outgoings had gone up by almost 2x over a period of a few months.

There are serious inflationary risks in the US at the moment, and we're certainly not immune from them.

Bernanke has set out his stall and has made it very clear that he takes his inflation remit very seriously. Shame the BoE only has a CPI remit, notwithstanding I don't see them going in an opposite direction to the FED.

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Bernanke has set out his stall and has made it very clear that he takes his inflation remit very seriously. Shame the BoE only has a CPI remit, notwithstanding I don't see them going in an opposite direction to the FED.

Golden rule.......don,t fight the FED!

I wonder if numbnuts (Brown) is even aware?

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I must admit my faith has been faltering at times recently, am scared the huge rush to buy bonds from pension funds in UK and more importantly in the US were going to keep interest rates permanently low (the new paradigm perish the thought).

However this news really warms the heart.

I am a HPC traditionalist of late and I think that only interest rates will bring it all down.

For me the only IR's that matter is the ECB and the US. If IR's go up in the US and bring the housing market down (and they have less fear in doing so as it is limited to isolated areas where huge drops will be seen) then it will drag us down with them.

I think the powers that be know this and are waiting for it. Brown eye will be on TV blaming it all on the states in a few months.

Marvellous day.

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Bernanke has set out his stall and has made it very clear that he takes his inflation remit very seriously. Shame the BoE only has a CPI remit, notwithstanding I don't see them going in an opposite direction to the FED.

Yep. The markets know that eventually they will come around to the reality.

I am a HPC traditionalist of late and I think that only interest rates will bring it all down.

Yes, it's all about interest rates.

You can argue about John Precott, Estate Agents and the BBC forever and a day, but the recent rises in house prices are due, primarily, to historically low interest rates.

We know that situation can't continue forever, and when IRs go up, house prices will sink. In some areas this will be so dramatic that a whole generation will suffer and house prices will not be talked about for a decade.

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Secondhand information......

My wife just phoned me to say that she is watching Bernanke on TV and he stated that US houseprices are dropping.

Edit: Ooops, sorry, it's in the Bloomberg article linked to above...

Bernanke may be a little out of touch. The crash has already begun in the bellweather city of San Diego where the median for new houses dropped over $100,000.00---in ONE MONTH. They expect a 5% drop on each of the next 2 quarters which is highly optimistic given the catastrophic drop already sustained.

http://www.signonsandiego.com/news/busines...-bn13homes.html

The panic will spread over most of the US this month and a hard landing will ensue. Now that IR are to go up up and away it cannot be avoided. At least the crash will be localised to the West and East Coats with CA, FL and MA getting hit the hardest.

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Do the US calculate inflation differently to the UK?

It's not that I don't believe the recent **cough** 1.9% **cough** 'official' figure....

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Do the US calculate inflation differently to the UK?

It's not that I don't believe the recent **cough** 1.9% **cough** 'official' figure....

No, they calculate it in essentially the same way.

Inflation coming to a city near you.

which way now?

UK base rate is the orange one.

No way. We don't have to follow the US. We've broken out of the old trend. This is a new paradigm in economics, didn't you know ;)

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I find the recent 1.9% inflation figure hard to believe from a personal perspective, however, I can see how it can be useful to stoke up the housing market once again though lowering interest rates

Spend our way out of trouble...again....

Edited by dnd

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The US is a good model system for seeing what effect high interest rates will have on a housing bubble. Sure, prices will come down, but will it affect the economy as a whole?

http://money.iwon.com/jsp/nw/nwdt_rt_top.j...ias/money/cm/nw

First American Says Mortgage Reset Risk Overstated

NEW YORK -(Dow Jones)- A lot of ink has been spilled about the potential impact of rising interest rates and slowing housing price gains on homeowners with adjustable-rate mortgages.

The outcome could have big implications, not just for the unfortunate borrowers who can't afford higher payments and are unable to refinance in order to avoid defaulting on their loans, but for the broader housing market and the U.S. economy as a whole.

Christopher Cagan, research director at First American Real Estate Solutions, a unit of First American Corp. (FAF) (FAF), thinks these concerns are overdone, since many of these loans have initial interest rates that are near current market levels, limiting the size of the increase in monthly payments when their rates reset.

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This is all happening too quickly.

The $ is strengthening, even though the BoE were hawkish.

I gave an anecdote a few month (after one of the hurricanes) ago from a friend in the US.

He said that his monthly outgoings had gone up by almost 2x over a period of a few months.

There are serious inflationary risks in the US at the moment, and we're certainly not immune from them.

Hmmm, better check your gold stocks...down $10!

:lol:

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Bernanke has set out his stall and has made it very clear that he takes his inflation remit very seriously. Shame the BoE only has a CPI remit, notwithstanding I don't see them going in an opposite direction to the FED.

indeed,he's been quite candid about his intentions on IR by the look of it....that means the fed will keep going far longer than many expect.

...now this might have escaped a few people,but we might be following a rather similar tack,but we've done it with stealth.

IR's have not risen much but taxation,especially the personal variety has......two different means to the same end?

we might actually fare better than the US because our economy has built-in inefficiency,so we may not have as far to fall!!!..

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Hmmm, better check your gold stocks...down $10!

:lol:

The laugh is on you GS. It may be falling in $ but has held up much better against the £.

Gold is excellent protection against the falling pound.

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The laugh is on you GS. It may be falling in $ but has held up much better against the £.

Gold is excellent protection against the falling pound.

I hope you're right. I'm not in the slightest convinced about the £ holding up. Be careful.

;)

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Bernanke has set out his stall and has made it very clear that he takes his inflation remit very seriously. Shame the BoE only has a CPI remit, notwithstanding I don't see them going in an opposite direction to the FED.

Bernanke has got a bad press because of the silly "helicopter money" remark. He's too intelligent not to see the mess the US is in. It's a fine line as the "official" statistics show little to be wrong, although inflation, despite all the games played with hedonic adjusting has been going up fast recently. He knows they can hide things only for so long, that an economy cannot grow on borrowing and debt alone and that to get things back on track something needs to be sacrificed. Given his choices, the housing market is the asset bubble that will be sacrificed as the DOW or dollar dropping like a stone is very visable.

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when asked why they are not reporting m2/m3 money supply figures anymore.

He said "We don't want to put too much of a burden on banks in producing the figures :lol: , also acedemics don't find it much use".

first day in the job and he's already doing comedy.

he's running the fed and yet claims not to know how much is being printed. :lol:

Edited by pop

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  • 301 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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