Mortgage rates / interest etc

[julianf]

Your assumption that all the money is in one bucket or should be considered as in one bucket.

I thought I had addressed this? I said somthing along the lines of not caring how many buckets there were, what colours they were, or what was written on them.

I don't, for the purpose of this debate, even want to make comment on why it was given out, where it was given out, to whom it was given to etc.etc.


I'm interested in where it is now, and the effects it's having now.

You keep going back to the whys and the wheres. Again, I've not made comment on any of that.

600b was injected. Where is it now and what's it currently doing to the economy?

 

[monster]

I was simplifying things for those who pretend not to understand, and seem to have created further issues.

My point is that the marbles have not disappeared. If 600 billion marbles were poured into any number of buckets, those marbles still exist.

If you don't have [number of population / number of marbles] then someone has ended up with more marbles than you. And they have got richer, in terms of marbles, whilst you, relative to them, have got poorer.


This really is simple maths. I'm evidently a really poor teacher, or some people dont really want to understand. Like the chap who said that he will need to "agree to disagree". I mean if i try and demonstrate that 2+2=4, someone can "agree to disagree" all they like, but it doesn't change maths.

We are not talking who should have got what. We are talking undisputable maths. If 1000 marbles are give out between 100 people, and then its "all shaken up" those with less than 10 marbles have become relatively poor (in marbles) against any that end up with more than 10 - no matter if they have more marbles than they started with.

Number of buckets, colour of buckets, what the buckets have written on them, etc. etc. is not relevant.

I have to say i'm not grasping your analogy - the reason some received newly created money during the lockdown was because the state prevented them from working and earning and so they just received what they would have received had they been allowed to work. Others who were allowed to carry on working and receiving their income via the normal route didnt receive any of your 'marbles' as they didn't need to as they were still getting paid....

Not that I condone any of this - Printing £billions to pay people to stay at home and produce nothing for two years has got to be one of the single largest follies a government has ever done! and the most inflationary thing possible!

Just doing one of those things is massively inflationary, but to do the two simultaneously - QE and stifling production - is the politics of madmen. Well its no wonder we have massive inflation - and I even seem to remember those in power in the central banks suggesting at the beginning the inflation was temporary and then transitory - now we see its runaway!

 

[Spectric]

Not that I condone any of this - Printing £billions to pay people to stay at home and produce nothing

That is just fantastic, but that is no different to retirement and I can fully recommend it because us boomers have earned it.

 

[monster]

600b was injected. Where is it now and what's it currently doing to the economy?

Its everywhere - it has expanded the money supply - that means more money chasing (due to lockdown) even fewer goods and services. Its doing what any increase of the money supply (inflation) does to the economy - it is raising prices, devaluing debt etc - and the central banks are responding by raising interest rates to try and get the inflation they helped create back under control.

 

[julianf]

I have to say i'm not grasping your analogy - the reason some received newly created money during the lockdown was because the state prevented them from working and earning and so they just received what they would have received had they been allowed to work. Others who were allowed to carry on working and receiving their income via the normal route didnt receive any of your 'marbles' as they didn't need to as they were still getting paid....

I think, maybe, my language has confused my point.

I have probably said "got" a few times, implying that my concern is who initial "got" the funds, whilst that is in the past, and what is of concern right now is who has "got" the funds now. Again, my comment, time and time again, is to money not just vanishing. To say "but it was spent" etc. is focusing on what was, rather what is. The marbles were flung out by whatever method, and they did not just vanish again. They are still about. And, if you don't have them (right now) then someone else does.

As you say in your second post, if there is a subsequent scarcity of resources, that additional money supply is chasing those limited resources, and fuelling inflation. There was no significant scarcity of resources after 2008, so QE bolstered the asset market which is largely ignored in inflation figures. Did the money "trickle down" to increase aggregate demand at lower levels? The data suggests that it did not, so a period of low inflation, low interest rates.

But now the "double whammy" that you mention - increased money supply at the levels of wealth that like to "invest" additional funds AND a reduction of goods available to be consumed by the lower levels of the wealth spectrum. So inflation.

If interest rates rise too far in relation to wages, we will, of course, see issues in mortgage defaults. But i doubt that will actually affect house prices as much as the recessions toward the end of the last centaury, as there is that much more money sloshing about high up the wealth scale, looking for assets.

Time will tell, i guess.

 

[Steve_Scott]

unless you have, in your account, be it as cash or assets, an ADDITIONAL 10 "marbles" per person in your household, then those marbles are somwhere else.
With someone else.

I agree with the point you’re making, but highlight that if it’s in your account, even before it’s spent, it’s being spent by the bank making the wealthy wealthier.

 

[IBmatty]

A reminder, just in case anybody has not been paying attention at the back!

View attachment 146398

Lies, lies and statistics.…. According to the French government (and the UNHCR), the number for France 2021 should be 11.2. It makes us 5th or 6th in terms of destination country, just ahead of UK. HOWEVER, these 2 countries such a high proportion of migrants don‘t actually claim asylum, particularly compared to our neighbours like Germany to a level that it makes asylum figures worthless when considering if the word “invasion” is appropriate or non. Oh, and while you Brits are childish enough to actually spend time arguing about if or not a word is appropriate or not you can’t expect the French authorities to take you seriously and actually help out. Not that we will anyway as the only way to stop the boats is to either reduce the pull factor to the uk or increase it here and the idea the French taxpayer will start to offer even 1 star hotels let alone 4 star ones is laughable. We know how to protest block roads properly over here…our traffic can’t be stopped by pasty white liberal vegans and superglue, so we do it properly!

 

[Jacob]

.... the only way to stop the boats ....

Is to recognise that migration is now a global issue and to do something intelligent about it, first on the list being to open safe routes and to look at ways of international cooperation.
Worst possible time for brexit.
Migration is increasing as climate change places additional massive burdens, on regions already destabilised by war and other factors.
The alternative is to have bodies piling up at borders, or washing up on beaches, which is already happening.

 

[IBmatty]

Is to recognise that migration is now a global issue and to do something intelligent about it, first on the list being to open safe routes and to look at ways of international cooperation.
Worst possible time for brexit.
Migration is increasing as climate change places additional massive burdens, on regions already destabilised by war and other factors.

Taking the UN top 10 countries of origin for migrants, which account for more than the rest combined, can you point out which ones are because of climate change?
Afganistan, Syria, Nicaragua, Venezuela, Haiti, CAR, Honduras, Iraq, DRC, Colombia.

 

[Jacob]

Taking the UN top 10 countries of origin for migrants, which account for more than the rest combined, can you point out which ones are because of climate change?
Afganistan, Syria, Nicaragua, Venezuela, Haiti, CAR, Honduras, Iraq, DRC, Colombia.

Every country in the world is already being affected by climate change and the pressure to migrate is, or will be, greatest on those already desperate and struggling, for whatever other reason.

 

[Spectric]

It is the dawn of a new era, the time of the savers now mortgage rates are rising to more realistic interest rates and I accept it will be a shock to many who have never seen the high rates of the past but then they should have been paying off more or not stretching themselves to the limit.

 

[Jacob]

It is the dawn of a new era, the time of the savers now mortgage rates are rising to more realistic interest rates and I accept it will be a shock to many who have never seen the high rates of the past but then they should have been paying off more or not stretching themselves to the limit.

Nothing particularly "realistic" about higher rates. Interest is not a natural phenomenon.
Govt will have to prop up those who can't pay their mortgages and use the cost as an excuse for yet more austerity, whilst filling the pockets of financiers and avoiding tax rises for the better off.

 

[Terry - Somerset]

Imagine you are a fairly wealthy individual - (say) 5 bedroom house in a couple of acres.

Someone, clearly destitute (hungry, cold etc) knocks on your door. Taking sympathy you may offer food, a bed for the night (or at least sleep in an outbuilding). The decent thing to do for another human being.

A family arrive including 2 young children. You are equally sympathetic to their need. You may let them stay a few days, and even help them access other support from the authorities - housing, schooling, healthcare etc.

A group of 20 arrive at your house a few days later - word having got out you are a generous and decent human being. You are nervous and feel somewhat threatened. You provide a warm drink, a snack, and are relieved when they go on their way.

The following week 100 arrive, including a some evidently fit young men who seem entirely capable of looking after themselves. They seem polite but the atmosphere is tense. You don't have enough food in the house, and certainly no where for them to stay. You lock the door, ask them to leave and tell their friends not to keep coming, call the police for support.

We do need to control borders - a limitless stream of migrants is untenable, unaffordable and diminishes the lot of those already here who should be our prime concern.

We should also support those in genuine need.

A balance needs to be struck between the two conflicting needs. A tough reality is that unless we are clear where that balance lies, and the means by which it can be properly managed, migrants will arrive in ever increasing numbers. We are completely lacking in both respects.

 

[IBmatty]

Every country in the world is already being affected by climate change and the pressure to migrate is, or will be, greatest on those already desperate and struggling, for whatever other reason.

I’ve been told for 50 years (be it ice, wind, water or heat) that man-made global climate change will cause this within the next 10yrs, so we’re 40yrs late. The reality now is that and for those 50years it’s always been man-made conflict, man-made oppression, man-made religion, man-made whatever pretty much EXCEPT climate change that has caused it.

 

[Jacob]

Imagine you are a fairly wealthy individual - (say) 5 bedroom house in a couple of acres.

Someone, clearly destitute (hungry, cold etc) knocks on your door. Taking sympathy you may offer food, a bed for the night (or at least sleep in an outbuilding). The decent thing to do for another human being.

A family arrive including 2 young children. You are equally sympathetic to their need. You may let them stay a few days, and even help them access other support from the authorities - housing, schooling, healthcare etc.

A group of 20 arrive at your house a few days later - word having got out you are a generous and decent human being. You are nervous and feel somewhat threatened. You provide a warm drink, a snack, and are relieved when they go on their way.

The following week 100 arrive, including a some evidently fit young men who seem entirely capable of looking after themselves. They seem polite but the atmosphere is tense. You don't have enough food in the house, and certainly no where for them to stay. You lock the door, ask them to leave and tell their friends not to keep coming, call the police for support.

We do need to control borders - a limitless stream of migrants is untenable, unaffordable and diminishes the lot of those already here who should be our prime concern.

We should also support those in genuine need.

A balance needs to be struck between the two conflicting needs. A tough reality is that unless we are clear where that balance lies, and the means by which it can be properly managed, migrants will arrive in ever increasing numbers. We are completely lacking in both respects.

Striking a "balance"? Allowing some in whilst the others die on the borders or in the sea?

 

[Jacob]

I’ve been told for 50 years (be it ice, wind, water or heat) that man-made global climate change will cause this within the next 10yrs, so we’re 40yrs late. The reality now is that and for those 50years it’s always been man-made conflict, man-made oppression, man-made religion, man-made whatever pretty much EXCEPT climate change that has caused it.

Even if true, so what?

 

[Spectric]

Govt will have to prop up those who can't pay their mortgages

Why, no one got help in the eighties as hundreds just gave the keys back. Your personel financial situation is something you take control of along with any risk you take and just because you can mortgage yourself upto the hilt because there is no bank manager saying otherwise does not make it the right decision and now many will feel the consequences.

 

[Jacob]

Why, ....

because people have to have somewhere to live

 

[Spectric]

because people have to have somewhere to live

That was also the case back in the eighties, people must start taking responsibilities for their lives in all departments and not just think that they will be bailed out by someone else, in simple english learn to stand on your own two feet.

 

[Jacob]

That was also the case back in the eighties, people must start taking responsibilities for their lives in all departments and not just think that they will be bailed out by someone else, in simple english learn to stand on your own two feet.

So it just serves them right? You sound quite pleased!
That's one point of view, but doesn't help at all with the housing situation.
Are not the reckless lenders equally or more to blame? - they are supposed to be the financial experts and they knew of the risks.