Ponty
pfm Member
Why are you so keen on ZIRP and printy printy? It makes the rich richer and the poor poorer.
Inequality and the top 10%
- Thread starter sean99
- Start date
Why are you so keen on ZIRP and printy printy? It makes the rich richer and the poor poorer.
ks.234
Half way to Infinity
What? It was you that raised printy printy and ZIRP? First of all we haven’t had printy printy since we left the gold standard, and ZIR is beneficial for those with a mortgage which is where this discussion started
Snufkin
pfm Member
In the Wonderful World of Tories it is; you know the place, it’s the one with hard working little blue Elves and nasty skiving red Gnomes.
Snufkin
pfm Member
In the Wonderful World of Tories it is; you know the place, it’s the one with hard working little blue Elves and nasty skiving red Gnomes.
Ponty
pfm Member
I suppose you could choose to ignore central banks flooding global economies with walls of liquidity. ZIRP is indeed extremely beneficial to those who own assets. An unmitigated disaster for those who don’t.
Seeker_UK
Feelin' nearly faded as my jeans
£28k would be about right if it was a council house bought under 'right to buy' - they hadn't capped the 'time in property' discount in those days. Around Cambs, three-bed terrace council houses were going for that sort of money at the time.
russel
./_dazed_and_confused
We bought our first house in 97 and we weren’t that well off, the building society tried to get us to borrow more “because we could afford it”, then she admitted that some people had calculated what they could borrow down to the last pound so they had no buffer, which seemed crazy at the time but in hindsight they will have done much better than us on average, although I did pay the mortgage off quite quickly, so maybe not.
No it wasn't a council house, just a typical 2 bed semi.
Seeker_UK
Feelin' nearly faded as my jeans
My 1 bed terrace (no garden) was valued at £59k in 1999 so, like Bob, I'm surprised it was that cheap.
One would need to earn over US$ 200k/annum in order to be in the top 10%.
See: https://dqydj.com/household-income-percentile-calculator/
See: https://dqydj.com/household-income-percentile-calculator/
The top 10% in terms of net worth begins at at US $1.2 million.
See: https://dqydj.com/top-one-percent-united-states/
Rather lower than I was expecting.
See: https://dqydj.com/top-one-percent-united-states/
Rather lower than I was expecting.
Just checked on Zoopla- an end terrace went for £21k in 2001 and another 2 bed semi went for £32.5k in 2002, both very near to hers. It needed a small amount of work, nothing major as she moved straight in, it was mainly modernising/decorating etc. nothing drastic.
Most in the recent vicinity are now around the £120-130k mark.
ks.234
Half way to Infinity
Inflation was caused by too much money chasing too little supply of houses to buy or rent at a reasonable cost. The money came from selling off the housing stock below market values and preventing local authorities from reinvesting in replacement housing. The effect was extra money in the system chasing too few houses and the added effect of a massive increase in rental costs. I bought my first property post divorce in 2000, I bought a one bedroom flat because it was cheaper than renting. This was before ZIR.
Selling off housing stock and Buy to Let was the unmitigated disaster for those without housing assets, not ZIR.
Heckyman
pfm Member
Governments worldwide have spent the last 30 years making it easier and easier to borrow, obviously this has inflated asset prices.
A convenient policy for governments to win votes with. People perceive the inflation as a gain of wealth and then enjoy spending the “money”.
Unfortunately, many people don’t get that this is the force behind today’s rising inequality.
No chance for youngsters to get in the game unless they can get an early inheritance from a newly minted parent. No wonder that the opening political divide is between young and old.
A convenient policy for governments to win votes with. People perceive the inflation as a gain of wealth and then enjoy spending the “money”.
Unfortunately, many people don’t get that this is the force behind today’s rising inequality.
No chance for youngsters to get in the game unless they can get an early inheritance from a newly minted parent. No wonder that the opening political divide is between young and old.
Ponty
pfm Member
I’d agree that selling off council houses on the cheap was a bad decision. Banks effectively set house prices based on how much they will lend. For any given salary, assuming a decent credit rating and other factors remaining equal, the primary factor determining the size of mortgage agreed (set by affordability criteria) is ……..interest rates. Govts love rising house prices. Makes people feel rich so they spend / borrow to buy stuff they don’t need whilst raising a load of tax for the govt.
BTL really isn’t that great. Most landlords would be better off investing in global equity markets, with a hell of a lot less hassle. Factor in the hostile tax environment from govts and it’s really not worthwhile, certainly for new entrants.
Back on the OP’s topic, I know many people in the US in this exact position. For people in this sector, life seems less fraught and stressful in the UK IMHO and it’s easier to strike a better balance in life.
tones
Tones deaf
We often reflect how fortunate we were, I in Norn Iron, Mrs. Tones in Oz, to have been born in these particular places at this particular time, and to have the educational opportunities that we did and to be able to utilise them. Our girls had it a lot harder - but them we did bring them to Swizzieland with a school system that basically sets out to kill you. Thankfully, they are both quite bright and they have done well (the wee one is 36 today - I feel old).
It seems to me that we are nearing the end of a brief period when the non-upper classes could do OK. In the UK, it started with the rise of the trade union movement and the First World War (it freed up a lot of land because so many entitled sons stayed in France - young officers, which they invariably were, had the highest casualty rates of any rank). We have seen the arrival of affordable cars for the masses, the possibility of overseas holidays instead of a week in Blackpool or Scarborough, etc.). This era seems to be coming to an end, when such things are again becoming less and less available to the masses, as we head back to the Gilded Age (I believe that the levels of inequality nowadays are even greater than those that preceded the Wall Street Crash of 1929).
As you have chosen to ignore growth of other forms of money supply. Check out the growth of M1,2,3 and 4 money supply between, say, 2000 and 2005 (though I think 2004 is the most important). Somewhere, floodgates were opened that were a lot less benign than Central Bank QE later in the decade (not to suggest they were totally benign, if at all). The 2008 financial crisis is a misnomer, we are experiencing a process, not an event.