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Is a five percent loan to new home buyers in Britain enough? Price effects of Money Supply versus true demand and the possibility of Re-segmenting the market with regard to Mortgages of private dwellings.


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Showing 1-13 of 13 posts in this discussion
Initial post: Mar 13, 2012 11:32:06 PM PDT
Hoo-Zen!! says:
Okay this is throw back economics pure and simple. According to Hugh Stretton's "New Introduction to Economics" [which was institutional economics description of the lessons of 20th century and the Long Boom] the hidden cost of running a free floating international exchange system in currency and equities and bonds is 3%. This means that the first to "get it in the neck" are local builders since what was once 6% and their price point for reasonable profits is now effectively 9% and out of reach of the middle classes - HENCE FANNIE MAE AND FREDDIE MAC.

Thats one side of the argument. The other is the desegmentation of international stockmarkets in the early 1990's combined with the general de-segmenting of equity, real estate and bond markets of earlier times (1980's) was _supposed to_ increase the effective demand for housing and so boost housing supply - a key plank of Republican social policy.

Now this would've been okay if the increased volume of money into the mortgage market from equities (when they went south) and bonds (when they went south) and money markets (when they went south) had not been sunk into Houses as "Store of Value" rather than a "use value" - affordable shelter.

Now that we've desegmented everything why not go back to the less potentially inflationary (in a market bubble sense) days of DEDICATED MORTGAGE BANKS for owner occupiers- and partially Resegment the Market and admit that de-segmented markets aren't all that "free" and carry hidden risks and costs.

Posted on Mar 19, 2012 9:45:45 PM PDT
the problems are more complex than that

we had mortgage banks and bailed them out in the 60s

the problem is banks gambling
too much debt personal and govt
economy tankign because people breed faster than jobs are created
and autmation makes people more producitve

every system saturates
the economy has saturated
growth is a failed strategy
cannot outgrow the problems now
the govt has to cut spending
else a world wide depression will hit hard
billions will die from starvation, disease, etce.

teh old economics theories are no good
as they are based on ASSumptions that are no longer valid
close enough for govt work when adam smith was around
too far off the mark to avoid major errors using that flawed theory now

Posted on Mar 19, 2012 9:49:09 PM PDT
Hoo-Zen!! says:
No it is as simple as that.

Posted on Mar 19, 2012 9:53:35 PM PDT
hoozie

then you are part of the problem

fannie and freddie encourgaged people to buy houses they could not afford
adn forced banks to give them risky loans to do that

when you throw in politics on top of bad theory you get problems

kill freddie and fanny now
sell of the assets to high bidder
and get the govt out of the biz of trying to create utopia out of thin air

Posted on Mar 22, 2012 8:53:32 PM PDT
Hoo-Zen!! says:
No its as simple as that.

Posted on Mar 23, 2012 10:17:44 AM PDT
hooey

it is just that simple

In reply to an earlier post on Mar 23, 2012 4:11:10 PM PDT
Lientje says:
Hoo-Zen!! In re your OP.

First of all, are you talking about housing as a place to live or as an investment.

Second, I've have heard (and believe) that Britain has about the highest cost of housing in the world. Why add a steep percentage on top of that?

In reply to an earlier post on Mar 23, 2012 4:13:01 PM PDT
Lientje says:
Whomper: teh old economics theories are no good
as they are based on ASSumptions that are no longer valid
close enough for govt work when adam smith was around
too far off the mark to avoid major errors using that flawed theory now

******
Why don't you tell us why they don't work now? I'm not buying into this concept, quite frankly. It sounds like Conservapuke talk to me.

In reply to an earlier post on Mar 23, 2012 7:42:00 PM PDT
lily

i would have
but your obviously biased comment says you wont care to read it
because i am a strong tea party supporter

and one reason for that is that the nonsense by keynes and others cannot work now. with the debt , more massive "stimulus" will fail. if the govt had saved up then that strategy would be great.

all systems saturate and slow/stop growing
the economic system cannot outgrow the problems
the only solution is to cut spending

population is increasing faster than job growth
automation is causing fewer people to be employed because of teh productivity gains
we will have more and more people to carry on the backs of the workers
which leaves no money to squander on democrat social programs

get the govt out of welfare
they waste 80% of the money
and if they give it to states they waste a bunch more
very little gets used for those who need it

give it back to private charity to do
they use less than 20% and give 80%+ to the needy

Posted on Mar 23, 2012 9:38:45 PM PDT
Lientje says:
Whomper: No DO NOT GET THE GOVERNMENT OUT OF WELFARE.

"
all systems saturate and slow/stop growing" And you think that they should have kept growing at the pace that was going since around 2000 and above !!! That was absolutely ruinous.

"the only solution" There is no only solution in economics. Get real.

"no money to squander on Welfare programs" That of all things is not squandered. Welfare programs for the rich, yes, most likely. But not the poor.

"they waste 80%" Where did you come up with that fancy figure?

Posted on Mar 24, 2012 6:59:30 PM PDT
Rachel says:
Is This for the History fora?

Rachel

In reply to an earlier post on Mar 27, 2012 6:30:28 AM PDT
anne says:
Hoo: <why not . . .admit that de-segmented markets aren't all that "free" and carry hidden risks and costs. >

anne: Oh, some people won't like hearing that.

Posted on Mar 27, 2012 11:09:34 PM PDT
Hoo-Zen!! says:
Old orthodoxies (those of the Long Boom) often [well in this case anyway] have good reasons for being orthodoxies and not so good ones for being old.
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This discussion

Discussion in:  History forum
Participants:  5
Total posts:  13
Initial post:  Mar 13, 2012
Latest post:  Mar 27, 2012

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