Debt and money

[MIGNAL]

Not sure I'd put Brown and Corbyn in the same sentence. :shock:
Anyway Brown bailed out the banks, don't know if you would call that peoples quantitative easing. It may have been interesting to see what happened if the banks had been allowed to fail. Things could have taken a sharp turn for the worse, at least in terms of the nice docile populace.

 

[Eric The Viking]

Not sure I'd put Brown and Corbyn in the same sentence. :shock:
Anyway Brown bailed out the banks, don't know if you would call that peoples quantitative easing. It may have been interesting to see what happened if the banks had been allowed to fail. Things could have taken a sharp turn for the worse, at least in terms of the nice docile populace.

Actually, it would have been far, far cheaper to protect (bail out) bank depositors, usually the "small" people, and let the shareholders (the gamblers) go to the wall.

It would also have strangled at birth the ridiculous, damaging and unsustainable property price inflation we see now. A lot of it is driven by foreign 'investors' wanting a safe haven (read 'laundry') for dodgy money. How that helps our economy completely escapes me.

And the idea that we presently don't have inflation after the bailouts is pure sleight-of-hand.

 

[themackay]

I agree with you Eric it is the ordinary people who are paying for the banksters greed as for house prices I still have my grown up kids living at home cant afford to move out I dont know if you remember when Gordon Brown sold most of our gold at rock bottom price that was to bail out at least one bank that got into trouble selling gold it did not have something like that if you google it you will find a Telegraph article.Should have let it go to the wall then.

 

[Phil Pascoe]

Are beans fungible?

Ask a bean counter.

 

[Sporky McGuffin]

Good work!

I did wonder if anyone would reply with "no, but mushrooms are".

 

[Zeddedhed]

What is this 'money' you speak of?

I bought my house for 200 goats and 1000 shekels of Broccoli. Don't owe no one nuffink. (If only)

 

[Cheshirechappie]

What is this 'money' you speak of?

I bought my house for 200 goats and 1000 shekels of Broccoli. Don't owe no one nuffink. (If only)

How did you get 200 goats in your wallet, and did they eat your credit card and cheque book?

 

[Cheshirechappie]

Not sure I'd put Brown and Corbyn in the same sentence. :shock:
Anyway Brown bailed out the banks, don't know if you would call that peoples quantitative easing. It may have been interesting to see what happened if the banks had been allowed to fail. Things could have taken a sharp turn for the worse, at least in terms of the nice docile populace.

Actually, it would have been far, far cheaper to protect (bail out) bank depositors, usually the "small" people, and let the shareholders (the gamblers) go to the wall.

It would also have strangled at birth the ridiculous, damaging and unsustainable property price inflation we see now. A lot of it is driven by foreign 'investors' wanting a safe haven (read 'laundry') for dodgy money. How that helps our economy completely escapes me.

And the idea that we presently don't have inflation after the bailouts is pure sleight-of-hand.

I'd agree about bailing outhe banks. Some were allowed to fail; Northern Rock and Bradford and Bingley, but the big ones were propped up. Given they were private businesses, government should have let them fail and then stepped in to guarantee depositors and borrowers. They did this with NR and B&B, passing the B&B mortgage book and depositor's funds to Santander.

Not sure I agree it would have strangled house price inflation. That started much earlier. I was planning to move in the late 1990s, and had everything in place financially to move where I wanted to until prices started to shoot up, and the price differential between the house I owned and the type I wanted where I wanted became too great, and got steadily greater. Whatever was causing house price inflation was acting from about 1999 onwards, not 2008. It's certainly a major problem, though, and I don't see a simple solution. Even building new houses won't stem the rise in costs if population continues to grow as predicted (from a current 64 million to about 75 million by 2030, apparently - and they'll all have to live somewhere!).

 

[Flynnwood]

How bank forecasts got it spectacularly wrong, just 6 months before Lehman went down.

Lehman were leveraged 1 dollar : 44 dollars when they went under.

7 mins:

https://www.youtube.com/watch?v=T5pA2ToZuaQ

 

[themackay]

Not sure I agree it would have strangled house price inflation. That started much earlier. I was planning to move in the late 1990s, and had everything in place financially to move where I wanted to until prices started to shoot up, and the price differential between the house I owned and the type I wanted where I wanted became too great, and got steadily greater. Whatever was causing house price inflation was acting from about 1999 onwards, not 2008. It's certainly a major problem, though, and I don't see a simple solution. Even building new houses won't stem the rise in costs if population continues to grow as predicted (from a current 64 million to about 75 million by 2030, apparently - and they'll all have to live somewhere!).

When I bought my first house in 1979 it was difficult to borow money you almost had to beg for that last couple of hundred pound you needed letters from employer gaurranteeing overtime etc I think the max they would give me was one and a half times my earnings then somewhere down the line it was twice your earnings then 3 times or eventually just how much do you want to borrow as well as the shortage of housing I think the availability of money just chased prices up,just my opinion.

 

[Cheshirechappie]

Not sure I agree it would have strangled house price inflation. That started much earlier. I was planning to move in the late 1990s, and had everything in place financially to move where I wanted to until prices started to shoot up, and the price differential between the house I owned and the type I wanted where I wanted became too great, and got steadily greater. Whatever was causing house price inflation was acting from about 1999 onwards, not 2008. It's certainly a major problem, though, and I don't see a simple solution. Even building new houses won't stem the rise in costs if population continues to grow as predicted (from a current 64 million to about 75 million by 2030, apparently - and they'll all have to live somewhere!).

When I bought my first house in 1979 it was difficult to borow money you almost had to beg for that last couple of hundred pound you needed letters from employer gaurranteeing overtime etc I think the max they would give me was one and a half times my earnings then somewhere down the line it was twice your earnings then 3 times or eventually just how much do you want to borrow as well as the shortage of housing I think the availability of money just chased prices up,just my opinion.

My first house purchase was in 1985, when interest rates were much higher than now. I just about survived paying 16% at one point - there wasn't much left over for luxuries, even on a fair salary with regular incremental rises. When was the peak of 'negative equity' and a rash of repossessions? Late '80s or early '90s? Not fun times to have a newish mortgage.

I think the early 2000's house price inflation may have been linked to artificially low interest rates stimulating a rash of spending. Given that interest rates are currently at historical lows, Heaven help anybody with an up-to-the-eyebrows mortgage. The other problem is that if there is another recession (and they happen!) government has no margin to stimulate economic activity by reducing interest rates. The next recession will hurt ordinary people. A lot.

 

[artie]

For those, like me, with a deep interest, there's a quite good basic video - it's two hours long but worth perservering: Economic Truth Documentary.

* because we're all in the faeces and it won't end well.

I haven't got all the way through this so maybe my question is premature, but..

At one point in the vid, the narrator explains, that the treasury creates money by printing notes for 3-4p each and sells them to banks for face value. Making for themselves a tidy 96-97% profit.

Does anyone else see a flaw in this.?

 

[Phil Pascoe]

"The next recession will hurt ordinary people. A lot." - C.C.
That much is beyond any doubt. It's a "when" not an "if".

 

[MIGNAL]

We haven't recovered from the last one! This could be a double, triple, quadruple dip.

 

[Zeddedhed]

And then you'll all be wanting my Goats and Broccoli

 

[Phil Pascoe]

But you'll need my potatoes,garlic and red wine ...

 

[Zeddedhed]

Sounds like a BBQ at Phils then

 

[Mike.S]

It would also have strangled at birth the ridiculous, damaging and unsustainable property price inflation we see now. A lot of it is driven by foreign 'investors' wanting a safe haven (read 'laundry') for dodgy money. How that helps our economy completely escapes me.

My son moved back home in March having previously rented in West London - from a gentleman who lived in Saudi.

He's just had an offer accepted to rent a 4 bed house (at £2,500pm :shock: ) in SW London - the Landlord lives in the U.A.E.!

I've no doubt there's some 'dodgy' money but I also think the UK is still perceived as a relatively safe haven for investment (whether in property or other assets) and/or as a bolt hole should the SHTF in the investor's homeland.

Quite how my kids are meant to get started on the housing ladder at the moment I don't know - one bed flats are over £200k round here and his work* (in W.London) means he can't travel too far.

* By way of a positive on foreign inward investment his employer is a subsidiary of SBG - the Saudi Bin Laden Group.

 

[Phil Pascoe]

And most of these Countries won't allow foreigners to buy property ...

 

[John Brown]

For those, like me, with a deep interest, there's a quite good basic video - it's two hours long but worth perservering: Economic Truth Documentary.

* because we're all in the faeces and it won't end well.

I haven't got all the way through this so maybe my question is premature, but..

At one point in the vid, the narrator explains, that the treasury creates money by printing notes for 3-4p each and sells them to banks for face value. Making for themselves a tidy 96-97% profit.

Does anyone else see a flaw in this.?

Yes. I'd say 240% - 330% ish
But then again, that only works for one pound notes. I think I'd stick to fifties.