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Brexit: give me a positive effect (2022 remastered edition)

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ks.234 said:
But UK house prices have not increased with inflation. UK inflation has been around 2% since 1993, and did not go above 2% again until July 2021. In that time house prices have increased significantly.
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You're cherry picking your dates a bit. If we were to look at house prices throughout the 60s, 70s and 80s, my guess would be we would find some correlation.
ks.234 said:
Further, although the received (Tory) wisdom might be that inflation brings higher interest rates (which might explain why Tories see raising interest rates as the only tool to tackle any inflation) if you take a long view of the relation ship between inflation and interest rates….

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…the correlation is not strong.
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If you remove the two minor events called WW1 and WW2, the correlation looks pretty good to me.
ks.234 said:
True, the correlation looks stronger if you only look at the 50 years before the 2008 crash, but it starts to look rather weaker again after it

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Here again, there was the Great Financial Crisis in there. We're still living with the consequences of that and the factors that created it.

ks.234 said:
Interest rates are regressive. The benefit lenders who tend to be richer at the expense of borrowers who tend to be poorer. To raise interests rates to control inflation is a Tory tool that will only make inflation worse because it will make the gap between prices and peoples ability to pay greater.
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I feel that is simplistic. BTL landlords (not poor) love low interest rates because they get to feel like financial geniuses. Most people depend on interest rates being above 0 for their pensions and all sorts of other things. Inflation is a tax levied by the salaried on the inactive, and most of the inactive are not the idle rich. One of my favourite conspiracy theories is the one that Boomers, having enjoyed the benefits of inflation all through their working lives (to increase their salaries and erode their mortgages), lobbied hard to bring interest rates down to 0 after they retired, to make sure they could hold on to their pensions and small-to-middling assets. They're a selfish lot, boomers.
 
I see. Mortgage rates hardly below 10% during the years of a mortgage and as high as nearly 15% was a good thing. Shame I never realised that when I had a fiver a month left over...
 
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PsB said:
You're cherry picking your dates a bit. If we were to look at house prices throughout the 60s, 70s and 80s, my guess would be we would find some correlation.
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I’ve already acknowledged that correlation so cherry picking is more than a bit unfair. What’s more, the dates could suggest a correlation with the era of Monetarism as much as anything else

If you remove the two minor events called WW1 and WW2, the correlation looks pretty good to me.


Here again, there was the Great Financial Crisis in there. We're still living with the consequences of that and the factors that created it.
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Yes, of course wars and economic crashes impact all sorts of things, but I was specifically addressing your point about a link between inflation and interest rates. It should also be noted that post Wall Street Crash and another World War, during a time of wildly fluctuating inflation, a different economic ideology was able to maintain stable interest rates and fund the founding of the NHS

I feel that is simplistic. BTL landlords (not poor) love low interest rates because they get to feel like financial geniuses. Most people depend on interest rates being above 0 for their pensions and all sorts of other things. Inflation is a tax levied by the salaried on the inactive, and most of the inactive are not the idle rich. One of my favourite conspiracy theories is the one that Boomers, having enjoyed the benefits of inflation all through their working lives (to increase their salaries and erode their mortgages), lobbied hard to bring interest rates down to 0 after they retired, to make sure they could hold on to their pensions and small-to-middling assets. They're a selfish lot, boomers.
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I have no insight into the minds of BLT landlords, those I know of got into that market well before Zero Interest Rates.

Yes, Zero interest rates are bad for pensions, but that could be tackled by replacing Bond Markets with Government Deposit Accounts which could do the same job, but remove the role of speculators.

Not sure about Boomers, thought the were post WW2? I think it is our generation who have benefited from the collapse of the post war consensus and the selling off of public assets at low prices and consequent profits. We are now facing the longer term consequences of that sell off in the shape of underfunded public services, and it is our generation that is trying to protect what it sees as it’s hard won profits and that it is the fear of losing something that this government preys on with a mixture of lies, assumptions, and lies based on assumptions.

To my mind the last century does not show long term economic trends upon which economic ideologies find any basis in facts, but that different economic ideologies produce very different outcomes for different groups of people.

Perhaps we need to start asking who the economy is for? Ask not what the economy is for, ask who it is for?
 
PsB said:
I feel that is simplistic. BTL landlords (not poor) love low interest rates because they get to feel like financial geniuses. Most people depend on interest rates being above 0 for their pensions and all sorts of other things. Inflation is a tax levied by the salaried on the inactive, and most of the inactive are not the idle rich.

One of my favourite conspiracy theories is the one that Boomers, having enjoyed the benefits of inflation all through their working lives (to increase their salaries and erode their mortgages), lobbied hard to bring interest rates down to 0 after they retired, to make sure they could hold on to their pensions and small-to-middling assets. They're a selfish lot, boomers.
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I struggled with high interest rates, and have never lobbied anyone to reduce interest rates (not that anyone would have listened to me if I had). Besides, you contradict yourself. If people depend on interest rates being above 0% for their pensions, that would surely apply to Boomers, almost all of whom will be pensioners by now
 
Joe Hutch said:
To be fair, he was a bit confused about the meaning of the word 'race' as opposed to the word 'ethnicity'. But the questions remain; what is an English ethnicity, and, even assuming such a thing exists, why was Brexit necessary to 'preserve' it?
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For me an English ethnicity is the current mixture of genes inherited from the various tribes that wandered about northern Europe between say the birth of Christ and the invention of mass transportation in say the 20th century. The second bit's easy. It's not. In fact, as I've said before here, brexit actually means that the immigrants come from further away. We always had control of immigration from outside the EU, we still ran it around 150k net per annum.
 
Brian said:
^
The record is stuck again. House prices have not always increased. Some of us owned a house during times values have fallen. Hard to understand for some, I realise.
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Nobody has said that house prices have never fallen.
 
Brian said:
^
I see. Mortgage rates hardly below 10% during the years of a mortgage and as high as nearly 15% was a good thing. Shame I never realised that when I had a fiver a month left over...
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Nobody has said that high mortgage interest rates were a good thing.
 
ks.234 said:
I’ve already acknowledged that correlation so cherry picking is more than a bit unfair. What’s more, the dates could suggest a correlation with the era of Monetarism as much as anything else



Yes, of course wars and economic crashes impact all sorts of things, but I was specifically addressing your point about a link between inflation and interest rates. It should also be noted that post Wall Street Crash and another World War, during a time of wildly fluctuating inflation, a different economic ideology was able to maintain stable interest rates and fund the founding of the NHS



I have no insight into the minds of BLT landlords, those I know of got into that market well before Zero Interest Rates.

Yes, Zero interest rates are bad for pensions, but that could be tackled by replacing Bond Markets with Government Deposit Accounts which could do the same job, but remove the role of speculators.

Not sure about Boomers, thought the were post WW2? I think it is our generation who have benefited from the collapse of the post war consensus and the selling off of public assets at low prices and consequent profits. We are now facing the longer term consequences of that sell off in the shape of underfunded public services, and it is our generation that is trying to protect what it sees as it’s hard won profits and that it is the fear of losing something that this government preys on with a mixture of lies, assumptions, and lies based on assumptions.

To my mind the last century does not show long term economic trends upon which economic ideologies find any basis in facts, but that different economic ideologies produce very different outcomes for different groups of people.

Perhaps we need to start asking who the economy is for? Ask not what the economy is for, ask who it is for?
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BLT landlord. Is that with mayo, red or brown sauce?
 
Having lightly followed this discussion about interest rates and house prices, it seems clear enough that there isn't a direct correlation between interest rates and house price inflation. But it also seems self evident that affordability is a factor that can and will fuel house price inflation, so near-zero interest rates must have some influence on the market. I suspect that interest rates are not so much a causal factor, as an aggravating factor.
 
TheDecameron said:
It shows what a group of morons occupy the govt front bench. Cherry already had them brought to heel at the High Court for their unlawful prorogation of Parliament. Surely they’re not going to offer the excuse this time that they don’t understand the very laws they themselves write?
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Crace put it best - "****ocracy".

Maybe EV can comment? He's 'in' with the Conservatives so probably has the skinny on what Boris will do.
 
Ponty said:
Zero interest rates are fabulous for pensions. They inflate asset prices, including global stock markets, investments in which many people depend on to fund their retirement.
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Not quite true I’m afraid. Many pension and insurance companies use interest bearing government securities to produce income, and while it is true that holders of stock might sell for profit when interest rates are high, and the lower cost of borrowing is presumed to stimulate spending when they’re low, you will however likely be disappointed If you try to find data showing a correlation between rising rates and falling markets

“Dow Jones Market Data recently analyzed the five most recent rate hike cycles to see what history says about stock market returns in these periods. Their analysis—duplicated in the chart below—illustrates that during these five long-term periods, the three leading stock market indexes only declined during one rate hike cycle.”

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ks.234 said:
Not quite true I’m afraid. Many pension and insurance companies use interest bearing government securities to produce income, and while it is true that holders of stock might sell for profit when interest rates are high, and the lower cost of borrowing is presumed to stimulate spending when they’re low, you will however likely be disappointed If you try to find data showing a correlation between rising rates and falling markets

“Dow Jones Market Data recently analyzed the five most recent rate hike cycles to see what history says about stock market returns in these periods. Their analysis—duplicated in the chart below—illustrates that during these five long-term periods, the three leading stock market indexes only declined during one rate hike cycle.”

52085286202_db69d7dd65_w.jpg
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Since when was 2008 - 2019 a rate hike cycle?! That’s hilarious!
 
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