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Bernanke Says Increases May Pause `at Some Point'

``Even if in the committee's judgment the risks to its objectives are not entirely balanced, at some point in the future the committee may decide to take no action at one or more meetings in the interest of allowing more time to receive information relevant to the outlook,'' Bernanke said.

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Can one of the financial wizards correct me if I'm wrong, but doesn't raising rates usually lead to a strengthening of a currency as inward investment is encouraged? If they have to raise rates again and again to counteract a sinking pound, what will that do the US housing market?

Billy Shears

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Can one of the financial wizards correct me if I'm wrong, but doesn't raising rates usually lead to a strengthening of a currency as inward investment is encouraged?

Yes, but it's a matter of degree, pouring 100 gallons into a pool isn't which help when 200 gallons is pouring from the bottom.

Also, it can signify panic or instability if done too quickly, take the Bank of England raising rates during the ERM crisis, exactly the same thing is now occuring in Iceland.

Edited by BuyingBear

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Thursday, April 27, 2006

1 British Pound = 1.43732 Euro

Wednesday, April 26, 2006

1 British Pound = 1.44190 Euro

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Can one of the financial wizards correct me if I'm wrong

Glad to help Billy boy.

but doesn't raising rates usually lead to a strengthening of a currency as inward investment is encouraged?

You see it's like this. The market quote usually has an element of expectation of future interest rates in the price. If expectations change, but nothing else, you can still expect the currencies price to change to reflect the new expectation.

If they have to raise rates again and again to counteract a sinking pound, what will that do the US housing market?

Billy Shears

Raising UK rates will do very little to the U.S. housing market. I would have thought you'd realise that.

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Glad to help Billy boy.

You see it's like this. The market quote usually has an element of expectation of future interest rates in the price. If expectations change, but nothing else, you can still expect the currencies price to change to reflect the new expectation.

Raising UK rates will do very little to the U.S. housing market. I would have thought you'd realise that.

I was talking about what would happen if the US has to keep on raising rates. If the US housing market goes down that's going to seriously affect sentiment over here. Same for Ireland.

Billy Shears

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I was talking about what would happen if the US has to keep on raising rates. If the US housing market goes down that's going to seriously affect sentiment over here. Same for Ireland.

Billy Shears

I knew what you meant, but you worded it very badly. :D

I personally think the average Joe, hearing of the U.S. & Ireland markets, will associate that with previous talk of those markets being in bubbles anyway & won't even make a connection with the UK market.

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I personally think the average Joe, hearing of the U.S. & Ireland markets, will associate that with previous talk of those markets being in bubbles anyway & won't even make a connection with the UK market.

Your idea of Joe Publics sentiments match your own.

I think you will get caught in a rush for the door, as you are not at all ahead of the game, are you.

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I personally think the average Joe, hearing of the U.S. & Ireland markets, will associate that with previous talk of those markets being in bubbles anyway & won't even make a connection with the UK market.

This shows the desperation of the bulls IMO, this is not financial sense this is rhetoric and what they are good it, spouting bulls**t. They have no arguments left. Back in 2003/4 they ruled the roost. Now they are making idiotic comments that hold no water just for the sake of it. If the American market goes down, report will filter through and dent every other market. PERIOD. A few interest rate rises later UK will be well on the way to a healthy correction in the housing market.

TTRTR - you've lost the argument at the end of the day - the housing market will correct. Take your profits and run or sit and wait this out for the next 15 years to make further gains. That is the dilemma - not really a dilemma - I know what I'd do.

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A prediction from Karhu:

This shows the desperation of the bulls IMO, this is not financial sense this is rhetoric and what they are good it, spouting bulls**t. They have no arguments left. Back in 2003/4 they ruled the roost. Now they are making idiotic comments that hold no water just for the sake of it. If the American market goes down, report will filter through and dent every other market. PERIOD. A few interest rate rises later UK will be well on the way to a healthy correction in the housing market.

TTRTR - you've lost the argument at the end of the day - the housing market will correct. Take your profits and run or sit and wait this out for the next 15 years to make further gains. That is the dilemma - not really a dilemma - I know what I'd do.

:lol::lol::lol:

That's rich! Lost the argument!

I guess you haven't heard that HPI has been quite strong lately given the slowdown last year?

Or have you just blocked your eyes & ears? Nah nah nah nah nah nah.....

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Raising UK rates will do very little to the U.S. housing market. I would have thought you'd realise that.

You're being deliberately disingenuous, he wasn't talking about UK rates but US rates, and their affect on the US housing market! He's perfectly right, rising US rates has caused the housing market to tank over there, when the various ARM's and variable rate fixes are updated it will tank further.

US rates and the status of the US housing market very much affects the prospects of the UK, only a fool couldn't recognise that.

Edited by BuyingBear

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A prediction from Karhu:

:lol::lol::lol:

That's rich! Lost the argument!

I guess you haven't heard that HPI has been quite strong lately given the slowdown last year?

Or have you just blocked your eyes & ears? Nah nah nah nah nah nah.....

HPI has been shit.

It's been outstripped by almost every other investment vehicle going.

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A prediction from Karhu:

:lol::lol::lol:

That's rich! Lost the argument!

I guess you haven't heard that HPI has been quite strong lately given the slowdown last year?

Or have you just blocked your eyes & ears? Nah nah nah nah nah nah.....

Yes, "rich" is something that you'll never be because although you were clever enough to see the housing boom, you weren't clever enough to lock in profits - a classic error. You're a paper millionare, not a millionare. Sorry, tell us you've sold/are in the process of selling/holding out for the long term or I won't believe that you are a true investor. Even bulls need to take a bearish stand from time to time in order to make money over the economic cycle.

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This shows the desperation of the bulls IMO, this is not financial sense this is rhetoric and what they are good it, spouting bulls**t. They have no arguments left. Back in 2003/4 they ruled the roost. Now they are making idiotic comments that hold no water just for the sake of it. If the American market goes down, report will filter through and dent every other market. PERIOD. A few interest rate rises later UK will be well on the way to a healthy correction in the housing market.

TTRTR - you've lost the argument at the end of the day - the housing market will correct. Take your profits and run or sit and wait this out for the next 15 years to make further gains. That is the dilemma - not really a dilemma - I know what I'd do.

There is something you lot just cannot or will not get. Let's say the US housing market tanks. What do you think will happen to their economy? Keep on growing? Consumer spending carry on as before? No and no. So, what will they do to stimulate demand?

They will DROP interest rates.

So will we.

Housing market carries on up for another few years.

You seriously think that if the American property market goes down, UK interest rates will go up. You are whistling in the wind mate.

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They will DROP interest rates.

Do that and the Dollar collapses.

Remember that the US is relying on a lot of investor sentiment from the Far East and they have so far effectively been bankrolling the house price bubble.

Once those investors start leaving the US, their IRs will have to go higher - perhaps significantly higher to bring them back.

Look at the bigger picture Spring In The Air. The house price bubble is a symptom of serious imbalances in the world economy that must and will correct.

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There is something you lot just cannot or will not get. Let's say the US housing market tanks. What do you think will happen to their economy? Keep on growing? Consumer spending carry on as before? No and no. So, what will they do to stimulate demand?

They will DROP interest rates.

So will we.

Housing market carries on up for another few years.

You seriously think that if the American property market goes down, UK interest rates will go up. You are whistling in the wind mate.

You guys seem to have a fundamental misconception with regard to interest rates. They are used to regulate *inflation* - nothing else. Think about that for a while and you may see that they're going up over the next year or two in UK. If they don't (the scenario you're describing) we're heading for deflation - have a quick look at what happened in Japan.

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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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