Post by JNugentPost by Farmer GilesPost by JNugentPost by Farmer GilesPost by JNugentPost by Farmer GilesPost by JNugent<https://www.theguardian.com/business/article/2024/aug/19/interest-rate-cut-fuels-immediate-upturn-in-uk-property-market>
The first Bank of England rate cut in four years has triggered an
immediate upturn in the UK property market, as cheaper mortgages
prompt interest among buyers and drive up house prices.
Figures from the property website Rightmove show the number of
potential buyers contacting estate agents about homes for sale
since 1 August jumped by 19% compared with the same time a year
ago. Contacts in July were up 11% on the previous year.
ENDQUOTE
The recent rate decrease was absolutely *foolhardy*.
Interest rates need to be closer to their historic norm - 6%
would be a good start. Then we'd see house prices fall (which is
said to be what people want).
Clearly Nugent still hasn't got a clue how it all works.
Low Interest rates = more demand which leads to higher house prices
(and negative interest rates, which we had for seventeen years, =
ever-increasing sky-high house prices).
High interest rates = less demand which leads to lower house prices
(and very high interest rates, eg, in double figures, which we all
remember, = a sharp reduction in house-prices, which we have
witnessed happening within our lifetimes).
Only idiots think interest rates solve the real underlying issues.
Post by JNugentYou may come up with all sort of fanciful stuff about fiat
currencies etc (you usually do, IIRC), but what I said above is
observably and objectively correct and true. It happens. We've all
*seen* it happen.
And you still don't get it. There Is nothing 'fanciful' about fiat
currencies. Only an ignoramus or a dishonest crook would say that,
and you could be one or the other - or even both!
I know you've got a "thing" about that. You might even have a long
spiel or screed ready to "justify" what you say (a bit like those
Freemen On The Land have), but it doesn't matter.
Oh right. So now you get to tell us how the nation's money is created
- and why it happens that way?
What you are ignoring is that it doesn't matter.
Those of us who have studied Economics - are well aware that money is
nowadays just a concept and is not equivalent to an amount of gold,
precious stones or equivalent in a vault somewhere. The concept of money
relies for its existence upon confidence in the system and a trust
placed in government to manage the currency so that that confidence is
well-placed. No-one would be happy with a situation in which a week's
wages was reduced to half its value within a month - it would make
saving and capital formation impossible. And with it, civilised life
nigh impossible too.
The government HAS to limit inflation and by doing so, enable commerce
of all sorts on a stable basis. Managing demand (and thereby the value
of money) is the central part of that.
Post by Farmer GilesPost by JNugentSocial sciences are just like other sciences in that they work on the
basis of tested hypotheses and either confirmation of falsification.
Economics works on the same basis as you largely do - deceit and BS.
There is always someone sitting in the back row at a first year
Economics lecture spouting stuff like that. They don't want it to be
true (preferring to believe that some group in society (very frequently
one group in particular) is manipulating the operation of the economy
out of a mixture of group-interest and evil.
Post by Farmer Giles'If all the economists in the world were laid end to end, they
wouldn't reach a conclusion'.
That's another of their claims. Thanks for reminding me.
Post by Farmer GilesPost by JNugentThere has never been any falsification of the observable facts that
high interest rates tend to calm down demand and militate against
inflation, whereas low rates have the opposite effect, inciting
demand and when low enough, allowing such high geared borrowing that
the economy is overheated and falling into inflation.
It has all been proven over and over again. Friedman got the 1976
Nobel for proving it again.
Friedman - Nobel Prize - hahahahahaha!
They don't believe in education either. Or in achievement. Especially,
perhaps, when achieved by people like Friedman.
Post by Farmer GilesHe got the Nobel Prize for his service to the banking industry, by his
devotion to Chicago School thinking, that ensures the perpetual
slavery of mankind by the mnanipulation of interest rates and the
money supply.
That's the sort of thing. Thanks again for the reminder.
Post by Farmer GilesInterest rates work - in the same way that a sledgehammer would work
for carving a roast chicken!
Post by JNugentPost by Farmer GilesPost by JNugentSo... is the general desire for house prices to keep increasing, or
is it for price stability, if not a cash-terms reduction in prices?
I own my home outright. But I'd like to see prices in real-terms,
if not cash-terms, decline.
But you'd also like to see the usury rates go up for your own
selfish reasons.
I certainly don't want to return to the recent situation wherein
savings are devalued by inflation and returning only 0.1% or 0.2% in
interest, thereby gradually transferring the value of those savings
in the form of a subsidy to borrowers.
Is there some reason why I or any other saver would or should be
satisfied with that?
Then, just for once, try and be honest about it.
I'm not going to waste much time on you, you're not worth it. As I
said, you're either an idiot or a crook.
In your belief system, anyone who understands the economy must be
attacked and abused.
On the contrary. It's the ignoramuses who think they do that I have a
problem with.