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06 Jul 12 05:23
Date Joined: 25 Oct 03
| Topic/replies: 5,929 | Blogger: Mrben's blog
he falling cost of crude oil and raw materials filtered through to shop prices last month, the British Retail Consortium (BRC) has said.

Overall shop price inflation slowed to 1.1% in June from 1.5% in May, its lowest level in two-and-a-half years, while food inflation fell to 3.5% from 4.3%, the BRC said.

The slump is caused by crude oil prices falling by a quarter on three months ago, and food commodities such as coffee and sugar also descending sharply. In addition, weak demand and aggressive competition continues to drive retailers to put on discounts and special deals, further lowering the cost of goods.

But according to melly printing money leads to hyperinflationExcitedConfusedConfusedConfusedConfusedConfused

More money printing from the BoE. They are shocked the first £325bn didn't work but they are absolutely sure £50bn more is definitely what's needed now.

More money printing from the ECB. Relaxing collateral requirements and trading freshly printed euros for garbage paper *is* money printing by another name.

Meanwhile, the FED money printing never stopped and Bernanke is getting ready for one final money printing orgy in late 2012 or early 2013.

……and then the wheels come off.

They will print, print, pr…………

mmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm all this printing and inflation has- FALLEN, yes thats right FALLEN.

Is that the definition of 'the wheels will fall off"CrazyCrazyCrazyCrazyCrazyCrazyCrazyCrazyCrazyCrazyCrazy
Pause Switch to Standard View Printing money reduces inflation- the...
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Report Eeternaloptimist July 6, 2012 11:46 AM BST
Lets be fair to Melly. It is a tsunami of inflation. 100% guaranteed. FACT. LaughLaughLaughLaughLaughLaughLaughLaughLaughLaughLaughLaughLaughLaugh
Report Menelaus July 6, 2012 12:35 PM BST
Got that forum????

"Printing money reduces inflation" !!!!!

I think benny the clown & company have outdone themselves. This joke not only had me spilling my coffee through my nose, I shot it like a projectile across the room.

Funny stuff guys, keep it up.

Report Mrben July 6, 2012 12:44 PM BST
answer this melly.

by your own post 325 billion has been printed.

inflation went  DOWN!

explain that one you dunderhead.

By the way those are  FACTS. Not futuristic fantasy.

take your time.Whoops
Report J2BLUE. July 6, 2012 3:17 PM BST
'But according to melly printing money leads to hyperinflation'

Great to see nothing has changed Love
Report Menelaus July 6, 2012 3:53 PM BST
Of course, of course, now I get it, it's patently and intuitively obvious that printing money REDUCES inflation, and all this time I thought the tooth fairy caused inflation.


You are a simpleton benny the clown. Throwing two numbers together and trying to pass it off as "analysis" and a conclusion that stands the study of economics on its head, while at the same time demonstrating massive ignorance of all things related to finance and economics is not laughable, it's sad. You belong to the retarded school of economics. You are the dean of the retarded school of economics.
Report Eeternaloptimist July 6, 2012 4:56 PM BST
Where is the tsunami of inflation Meltdown Melly?

Take your time. I don't want to rush you.
Report Eeternaloptimist July 6, 2012 4:57 PM BST
Ooops. I forgot to add. 100% guaranteed. FACT.
Report Whippet July 6, 2012 8:14 PM BST
don't worry, melly may eventually be right, some day.

but if he's not, I'm not sure what he is going to do with all those tampons and liquor chocolates that he has been hoarding for that eventuality. LaughLaugh
Report Mrben July 7, 2012 10:25 AM BST
poor melly- when challenged he fails every single time.Cry

melly- explain why inflation FELL with 325 billion money printing???? WHy???/ConfusedConfused

also expalin why, another 50 billion printing will make "the wheels fall off"???? mmmmmmmmmm  huh?ConfusedConfusedConfusedConfusedConfused

why is 375 the tipping point? Why not 400? 650?  a trillion?  Why pick 375?ConfusedConfusedConfusedConfusedConfusedConfusedConfused

come on melly , you the most clueless mug imaginable.You can't explain it can you?ShockedShocked

Yet you will rant and rave for the rest of this decade that money printing leads to hyperinflation.

Guess what- your wrong.No surprise there.

You claim my analysis is wrong. I did'nt analize anything.I stated facts.FACTS. Not french villa  125 a head lectures fantasy.F.A.C.T.S.

explain.Take your time.You mug.Angry
Report Menelaus July 7, 2012 12:27 PM BST
I explained to you that money is created as debt - Why did I get for it other than insults and temper tantrums from you ?

I explained to you that hyperinflation is not very high inflation - Why did I get for it other than insults and temper tantrums from you ?

I explained to you the right price of Oil - Why did I get for it other than insults and temper tantrums from you ?

I explained to you what deflation really is - Why did I get for it other than insults and temper tantrums from you ?

I explained to you that your expectation of AUD 1.10 and EUR 1.40 was utter rubbish thus saving you money - Why did I get for it other than insults and temper tantrums from you ?

I explained to you that your Facebook call was utter rubbish thus saving you money - Why did I get for it other than insults and temper tantrums from you ?

and many others…….

Now you post more utter rubbish and your expect me to set you straight again.

Remind me again, why should I continue to educate a clueless, brain dead clown like you ?

Take your time.
Report Menelaus July 7, 2012 12:28 PM BST
what, not why......duh !!!!
Report Mrben July 8, 2012 3:16 AM BST
explain why inflation fell?

'I explained to you that hyperinflation is not very high inflation"CrazyCrazyCrazyCrazyCrazyCrazyCrazyCrazyCrazy

make sense you moron.

all the rest of your post is brilliant- except for one thing- AFTERTIMING!!!!!

everyone is a genius with aftertiming you mug.
Report Whippet July 9, 2012 6:07 PM BST

looks like deflation is on the way rather than inflation? (no doubt melly will rubbish the author like always). Laugh
Report Menelaus July 9, 2012 8:13 PM BST
Wipeout, since you're still on your knees with nothing else to do, just scroll back through some of my older posts that explain experiencing "bouts of inflation and deflation" (deleveraging causes the deflation part, central bank policy response causes the latter) and read them over again. It's only a couple of days work, and you'll benefit greatly from it. AEP, whom I met on several occasions, use to be one of my favorites until he sold out. Evidently, there's a price for attending Davos.
Report Whippet July 9, 2012 9:28 PM BST
oh, so that's how it works?

There will be inflation, unless of course there isn't and there is deflation. Laugh I never expected you to give a concrete answer because you simply lack the mental capacity to do so.

PS Nice name dropping again there btw. Did you meet him at the same time you met your personal friend George Soros (or whoever it was you claimed to know personally) Laugh
Report Whippet July 9, 2012 9:29 PM BST
The only thing you ever have said to AEP is "would you like fries with that sir". Laugh
Report carlos monzon July 9, 2012 10:19 PM BST
Surly u guys r fishing here.

Printing money inevitably leads 2 inflation.

Maybe it will calm things for a while, however this is not the solution to the problem in the long term.

Wat I realy dnt understand is the hyperinflation theory. And wat does it mean.

Mele u just dnt seem to be making any sence on the matter. House price matter etc etc.

If u would answer just them questions I would be so grateful. And no I'm not trolling. Just asking questions about tge bits I find strange
Report Eeternaloptimist July 10, 2012 12:35 AM BST

You will just get condescension and gobbledegook from the Baron Of Bullshiit. I'll do my best for you:

There are several things which are inflationary: Devaluating your currency when you have a trade deficit will usually help, printing money as you say can be inflationary as can credit expansion. In direct answer, the printing of the money is only one part of the equation. I'll put it another way. Imagine you drive round in a great big pimp mobile, you also live in a great big pink pusssy palace, you have hookers hanging out of your car and bed and you are buying coke for them and all your pals. Everybody thinks you are doing well. The truth is that you are living a life beyond your means. You don't work. Everything is going on the plastic and to loan sharks. Until you hit the wall.

Now at that moment you have a great big black hole in your finances but you have a rich uncle who steps in and offers to pay you £5000 per month to get straight. You realise that the life you were living cost you £50,000 per month and you are still fecked because you can't go back to that life. The pimps won't extend you credit, the drug pushers won't give you the drugs and the hoes have started laughing at your little pecker now the money has dried up. Even worse every motherfrucker wants their money. So you sit down and you work out a repayment plan which satisfies nobody but gives everybody something and leaves you enough to scrape by.

Now logic would say that this £5000 of green which you didn't have and is now going back into the local economy should be inflationary because it wasn't there before as it was underneath your uncle's bed. The point is that it isn't because nobody can now live the life which your borrowed 50k was affording them. Everybody is poorer. Especially the people who leant you the money and are now sweating that they will get it back.

So we arrive at the answer to why in this instance printing money isn't necessarily inflationary. The black hole of banks finances haven't properly been addressed and nobody has admitted who owes what and to who because if they do then everybody will know how much shiit they are still in. Even though they are pouring in the money it aint filling it up the hole enough. Or more specifically, the banks balance sheets are wrecked, they don't want to lend what they still don't have and in the bust phase of the economic cycle in general people don't want to borrow.

The bigger the boom the bigger the bust.

So, you tell me, how effective is pushing on a piece of string? That is why printing isn't always inflationary or more specifically inflationary enough to create a tsunami of inflation in a rabidly deflationary environment because the banks probably need trillions and are at best treading water and skimming off the top at the same time because they know how much shiit they are in.

Hyperinflation is a more difficult one because there is no universally recognised definition. Some people believe that it is exceptionally high inflation over a period of time. In other words it is a monetary event where you can say that if inflation goes above x then that will result in a state of hyperinflation. I'm more inclined to lean towards a slightly different and somewhat controversial definition that it is a tipping point in a country whereby essentially the currency itself falls into disrepute and by definition is repudiated by the people. The clue is in the word hyper because it is accompanied by a collective mania. Again by that I mean that no motherfrucker wants money because they feel as if they would get as much use out of it by wiping their arse with it than trying to spend it. As witnessed in Weimar Germany when people were shovelling notes into their fires to keep warm because they got tired of pushing wheelbarrows to the bakery to buy bread which had doubled in price in the time it took them to get from their house to the bakery.

Hyperinflation leads to serious shiit if what I contend is right because a number can be addressed but a shift in crowd mentality of such a profound nature leads to serious social unrest manifested in beans and bullets. Nobody is safe and that tends to usher in strongmen who promise to restore order at a price.

I hope that has addressed your concerns in a way which you can dig but bear in mind mine is only one of many explanations out there. Feel free to ask anytyhing else and I'll answer as honestly as I can within the limits of my knowledge.
Report carlos monzon July 10, 2012 2:28 AM BST
I love the pimp bit. Relates to me.

Yeh hyperinflation is a tough 1 to define I agree.

But this is how I describe hyperinflation: 

It dnt realy matter if a currency Is inflated to x (certain percentage) which equals hyperinflation.

Different currencies will be effected by different percentages (which u could call hyperinflation) eg if middle east coutries experinced 70% inflation increase over say 7 months they would cope well they have been.

Now if uk experienced 10% inflation over the same period it could be devastating as u point put civil unrest etc etc.

Well dats the wat I make of it.

In expect gold to go down a bit over the next few months and maybe new records around the Xmas period.

Here's aquestion eo, do u think interest rates will be reduced to 0% this year
Report Mrben July 10, 2012 4:24 AM BST
Great explaination ETO. Fun and informative.Love

Your bang on, it needs more than simply printing money to cause great inflation.Only simpleton economics students hold that view. Any number of events must line up and those events evolve over time and are not identical each time.

That's why I fall off the chair every time I read someone quoting germany's hyperinflation as the benchmark for today.

Carlos- what is your criteria for saying-In expect gold to go down a bit over the next few months and maybe new records around the Xmas period. ???

Why christmas? Why not easter? why not labour day in october? Why not in 3 school holidays time? How did you come up with christmas?

My view is Gold is going nowhere significant.Esp to the upside. If there is any big big move in gold it will be down, in response to falling markets, not up in response to inflation.
Report Menelaus July 10, 2012 6:39 AM BST
Those are not "limits of knowledge", it's limitless ignorance.
Report Menelaus July 10, 2012 7:00 AM BST
The whole piece reveals the massive ignorance of the ALL FLUFF AND NO SUBSTANCE chap, wrong on so many levels I wouldn't even know where to start, but it also reveals that benny the clown wasn't the only one who misunderstands hyperinflation.

Hyperinflation is NOT very high inflation, it's LOSS OF FAITH IN FIAT CURRENCY. ALWAYS. PERIOD. And it's not an event as it's falsely described, it's a process. And there is nothing controversial about it.

Trying to disguise ignorance, hiding it behind colorful language doesn't make it any less odious......IT'S STILL IGNORANCE........and an EPIC fail in feigning intellect.

To be fair though, the whole piece might be interesting for teaching five year old children what they probably already know that "the bigger the boom the bigger the bust" (I never knew that until I saw it posted here) if you correct about 100 mistakes and clean-up the language a little bit.
Report Mrben July 10, 2012 7:30 AM BST
melly- you  have descended into a circus mentality.Your like a criminal, who despite being videotaped in the act, sit there say " it was'nt me, it was'nt me "

honestly you posts are of nothing more than mocking value.

    Certain figures in this article use scientific notation for readability.

In economics, hyperinflation occurs when a country experiences very high and usually accelerating inflation. While the real values of the specific economic items generally stay the same in terms of relatively stable foreign currencies, in hyperinflationary conditions the general price level within a specific economy increases rapidly as the functional or internal currency, as opposed to a foreign currency, loses its real value very quickly, normally at an accelerating rate.[1] Economists usually follow Cagan's description that hyperinflation occurs when the monthly inflation rate exceeds 50%.[2]

Hyperinflation results from a rapid and continuing increase in the supply of money, which occurs when a government prints money or creates credits in bank accounts, instead of collecting taxes to fund government activities. The price increases that result from increased government spending create a vicious circle, requiring ever increasing amounts of money creation to fund government activities. Hence both monetary inflation and price inflation rapidly accelerate. Such rapidly increasing prices cause widespread unwillingness of the local population to hold the local currency as it rapidly loses its real value. Instead they quickly spend any money they receive, which rapidly increases the velocity of money flow which causes further acceleration in prices.[3] Hyperinflation is often associated with wars or their aftermath, political or social upheavals, or other crises that make it difficult for the government to tax the population.

another definitionMischief

Definition of 'Hyperinflation'

Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is meaningless.

Read more:


Inflation is a sustained increase in the aggregate price level. Hyperinflation is very high inflation. Although the threshold is arbitrary, economists generally reserve the term “hyperinflation” to describe episodes when the monthly inflation rate is greater than 50 percent. At a monthly rate of 50 percent, an item that cost $1 on January 1 would cost $130 on January 1 of the following year.

Hyperinflation is largely a twentieth-century phenomenon. The most widely studied hyperinflation occurred in Germany after World War I. The ratio of the German price index in November 1923 to the price index in August 1922—just fifteen months earlier—was 1.02 × 1010. This huge number amounts to a monthly inflation rate of 322 percent. On average, prices quadrupled each month during the sixteen months of hyperinflation.

poor melly, you confused  because you are dumber than dog poo.

"Hyperinflation is NOT very high inflation, it's LOSS OF FAITH IN FIAT CURRENCY. ALWAYS. PERIOD. And it's not an event as it's falsely described, it's a process. And there is nothing controversial about it."

loss of confidence is what happens  AFTER hyperinflation you fkkiiing idiot. The loss of faith you bang on about is a RESULT of hyperinflation, it is not the definition you stupid stupid turd.

your statement that hyperinflation is  not vry high inflation put to rest any argument about your intellect.You can't even understand a basic concept.

Don't dare to lecture anyone here every again you usless pysops pretender.

get into your porsche and drive yourself off a cliff of embarrassment.
Report Menelaus July 10, 2012 7:55 AM BST
You heard how a simpleton describes it to five year old children, where the lines between right and wrong are blurred, where fact and fantasy are indistinguishable, and the emphasis is to impress that the writer read yesterday's business section editorial more so than demonstrate a solid understanding of the subject matter. Here how an economist explains it to adults, albeit without the h00kers and blow.

Inflation is the expansion in the money supply and credit (remember money is created as debt, blah, blah, blah, don't make me go through it again - whether, as Keen's models advocate, lending comes first and reserves later is a moot point at this juncture)

Deflation is the opposite

Those are the correct economic definitions of inflation and deflation here, there and everywhere and always. It is not a general increase or decrease in prices "of things' as most lemmings on here falsely keep regurgitating it is. Not to mention no one bothers to specify "what prices?" (consumer prices as measured by CPI, or producer prices as measured by PPI, or prices in general?) and "how are they measured?" . The how they are measured part is important because the methodology and the basket of goods used in arriving at the "inflation" number has changed a number of times over time convoluting the true picture, not to mention that asset prices such as stocks (equities) are not properly accounted in any basket of goods, distorting the picture even further. Yes, a "wealth effect" that doesn't count as having wealth. You couldn't make this stuff up.

Arguing that inflation/deflation is up/down movements in general prices is patently false and akin to putting the cart ahead of the horse. Those are the effects of inflation/deflation. Inflation/deflation can not coexist, period. But the effects can, that's what throws most people off. It gets more confusing, because lemmings mistake up/down price movements to be the disease instead of the symptoms, and falsely declare "inflation/deflation" taking place when in fact price movements are merely responding to basic supply/demand fundamentals, productivity, speculation, geopolitical events, etc., etc., and have nothing to do with a change in the broad money supply.

I hope I haven't lost you so far. Moving on to the crux of the matter…..

This financial crisis has been more or less defined by the severity of the tag of war between deflation and inflation ("bouts of inflation and deflation" remember?). The severity and extent of money destruction (that's the deflation part) and the policy response from the CBs (that's the money printing inflation, rather reflation, part) has been unprecedented. The *real* deflation is taking place on bank balance sheets. This is where money is being destroyed at a most severe and unprecedented level. The CBs have expanded their balance sheet (aka printed money) to cover the gaping hole because if they don't, the financial system collapses. It's that simple.

And everything was moving right along as the genius of Bernanke planned when he woke up one morning and realized that the one thing he can't print, Oil, was getting away from him, and it was causing havoc around the world. Yes, my halfwit friends, the Arab spring was not about democracy, freedom and ideology, it was about the price of bread. So he had no option but to slow down with the money printing, do barely enough to keep the wheels from coming off, because some people around the globe started starving to death (which he doesn't care about) and the price of petrol in the US was pushing north of $4/gal (which he does because Presidents don't get reelected when people moan right after they filled up their brand new 6 miles to the gallon Escalade with those shinny 28" rims). The money supply is contracting despite of all the money printing. Capital is being destroyed at a faster rate than new money is being created. Have a look if you don't believe me ( Deflation is winning the day for now, although price inflation multiples of the official government reported numbers is here to stay. Try and wrap your head around that.

Still with me?

Deflation however is a central banker's biggest enemy because……..drum roll please…….it collapses the very system that benefits the banking cabal. That is, the power to conjure money out of thin air. So as Bernanke stated in just about every paper that he ever wrote, deflation will not be allowed to take place. He's done an outstanding job so far in balancing his actions so as to prevent a complete deflationary collapse and not starve too many people around the planet but rest assured, when push comes to shove, he'll choose people starving rather than losing power. That's ALWAYS been a central banker's choice in the past. This is where the tsunami of inflation takes place.

Bottom line, the road to hyperinflation (WHICH IS LOSS OF FAITH IN FIAT CURRENCY, a process, not an "tipping point" event) goes through deflation first. I've said that repeatedly on here but it still goes over the lemmings' head. It's the "ends" part in "this is how it ends" part that throws everyone off. Besides, those in power, the cabal, those with the ability to create money out of thin air, will at the end make sure they benefit again. After all, the FED deliberately popped the Wall Street bubble in 1928, it lead to the Great Depression but it also lead to a massive transfer of hard asset wealth. The deflationary vortex phase will allow them to convert fiat money, which they have plenty of, to hard assets by buying those assets that are collapsing in value for pennies to the dollar. History also teaches that lesson.

So they will print, print, print. 100% certainty, there's no Plan B……….while the lemmings who are having their wealth stolen from them are soundly asleep.
Report Mrben July 10, 2012 8:39 AM BST
endless endless crap melly.To be honest  i did'nt bother reading it.Why should I do so?

its infuriating that someone as blatantly stupid as you is allowsd out in public.

Im arguing with an imbecile. A true real life imbecile.

You can't spell>you can't construct a sentence.Your a proven fraud and a delusionist liar. Basically you a waste of cyberspace.

You so stupid I now find you annoying.
Report Eeternaloptimist July 10, 2012 6:54 PM BST
I must confess that I'm also beginning to find his empty rhetoric somewhat exasperating. I give an opinion that there is no settled definition of hyperinflation but explain that there are two main schools falling broadly into monetary and psycological with Mr Ben pointing out that the former is backed by a lot of considered opinion. Then gob almighty starts flinging his own turds around once again. Can it really be the case that he thinks that only his opinion is valid in the entire world?
Report Whippet July 10, 2012 7:04 PM BST

AEP posting about more deflation.

Out of interest melly, in what way did AEP "sell out"? As far as I can tell, for as long as I've been reading the telegraph (switched to it about 2 years ago, or whenever the times online started charging) he has been heavily criticising, and almost always saying the exact opposite, of what the clowns at the EU say. How exactly is that a "sell out"?
Report bongo July 10, 2012 7:47 PM BST
Thanks for that link Whippet - a good read.
I think we can expect a deflationary Christmas in the West as all those toys and gadgets seem to get better and cheaper every year!
Report bongo July 10, 2012 8:09 PM BST
A few bits from the USA:

San Diego and San Jose have had ballots to reduce the cost of Public Sector Pensions. They were passed, but the changes are so meek they don't address the problem of future spending commitments with existing retirees keeping THE LOT and existing employees keeping EVERYTHING they've accrued in their years to now. The changes aren't enough. Cutting what new entrants get and what existing employees get in their remaining years won't do it.

In Nov 2011 , the county that contains Birmingham, Alabama went bankrupt owing around 4bn USD, and last month Stockton, California went under, owing between 300m USD and 1bn USD depending on if you include liabilities. These don't seem to have undermined confidence in municipal bonds though.
But get this for Stockton - 'It forecast a $26m deficit in the budget for the next fiscal year, starting on Sunday'. So even though they aren't making payments on bonds and have cut salaries they still cannot balance the budget. Ffs, school-kids could do it. The whole local government set-up seems to be about punting the financial problems just far enough into the future that the politicians are comfortably retired by the next administration faces the music. It beggars belief that people are willing to lend their hard-earned to this lot. You wouldn't find someone in the UK offering their savings to Liverpool Council for a few % better than what you could get in an ISA.
Report Menelaus July 10, 2012 8:53 PM BST
You're making really hard to choose between massively ignorant and disgracefully hypocritical.

And no, you don't post "opinion" on here, you post a massively erroneous understanding of economics. The rest is regurgitation from the morning news.

No, certainly not, my opinion is not the only valid one in the world, but it's at least MINE and ORIGINAL backed by research and a solid understanding of economics, not broad brush statements I picked up reading the financial section of my favorite rag.

The Mona Lisa wasn't painted with a roller brush, and that's all I keep seeing in your hands.

You are ALL FLUFF AND NO SUBSTANCE. You can wiggle, you can dance, you can join hands with the halfwit cartel and sing the Kumbay are still ALL FLUFF AND NO SUBSTANCE.
Report Menelaus July 10, 2012 9:07 PM BST
@ wipeout

Out of interest melly, in what way did AEP "sell out"?

He has turned into an uber-keynesian. I don't much follow his articles anymore, but this surely comes through loud and clear when talking to him face-to-face. He is advocating that the ECB be given the mandate to print, blatantly and openly like the FED, as the cure to the EZ debt crisis. This was certainly not his view even as late as twelve months ago. And yes, before you ask, I totally disagree with his new found position. More debt, doesn't cure a debt problem.
Report Eeternaloptimist July 10, 2012 10:40 PM BST

Funnily enough I take the opposite point of view. Such is the amount of fat in most western countries that the kids will soon get bored of rioting because they haven't got the latest trainers, especially if it becomes so bad that they have to go out and get a job. The opposite is the case in many poorer countries. I think there is a direct corrolation between the commodity inflation post QE and the Arab Spring. Those motherfruckers don't mess about with throwing shoes when the shiit hits the fan. Revolution tends to start with empty bellies rather than ideology.
Report Eeternaloptimist July 10, 2012 11:41 PM BST


There were some articles in the press a few weeks ago about interest rates being dropped again. This is usually a kite flying exercise with it following on from there. Having said that they then went and did a further bout of QE accompanied by the government's own lending initiatives. At every monthly meeting this year the members of the committee have all individually voted to keep rates on hold.

So in answer to your question I'd say that barring calamity in the eurozone or some other catastrophic external shock there is a fair chance of rates dropping by a quarter point but zero chance of them dropping to zero by year end. Of course I could be wrong but my best guess is that they will stay where they are.
Report Menelaus July 10, 2012 11:59 PM BST
Tell me, that chap that you "totally destroyed" on the politics forum, did you spell check him to death?

Report carlos monzon July 11, 2012 8:49 PM BST
Thank u eo. Fair reply that. I think u could be right on this 1. It's a close run thing. An increase would be devastating do u agree???  I mean in terms of property prices.

A big increase and it's a collapse. Big increase meaning 1.5%. 

0.25 would knock about 10k ov tge average price which stands at 160sh k.

0.5 knocks 25 to 30k of house prices.

Do u agree.
Report carlos monzon July 11, 2012 8:54 PM BST
So in answer to your question I'd say that barring calamity in the eurozone or some other catastrophic external shock there is a fair chance of rates dropping by a quarter point but zero chance of them dropping to zero by year end. Of course I could be wrong but my best guess is that they will stay where they are.
Menelaus     10 Jul 12 23:59  
Tell me, that chap that you "totally destroyed" on the politics forum, did you spell check him to death?

carlos monzon     11 Jul 12 20:49  
Thank u eo. Fair reply that. I think u could be right on this 1. It's a close run thing. An increase would be devastating do u agree???  I mean in terms of property prices.

Melenius I have never insulted u !!!!

Never have I asked stupid questions!!!!

So y have u stoped talking to me.

I feel as though iv lost a soul mate.

Yet u keep chating to eo, whipet, mcben who seem far more insulting than I ever was

Please tell me yyyyyyyyyyyy.

Report Eeternaloptimist July 12, 2012 12:01 AM BST

I don't know about the numbers but I think that the dropping of the interest rates and the government leaning on banks to go easy on people in arrears stopped a slide from turning into a massacre at the time. In the meantime most people have continued to get comparatively poorer. So I agree that a rise in interest rates would be disastrous for house prices. To what extent in terms of specific amounts would be a complete guess. To put this in perspective the Banl Of England has been going for over 300 years and this is the lowest the base rate has ever been. We are living in interesting times.

I presume that seeing as we are in the middle of a shiit storm you are deliberating on whether to pull the trigger on buying a house?
Report carlos monzon July 13, 2012 3:20 AM BST
No. Not realy, I have just bought 1.

After a long time considering this (about a month). I bought a house for 57k on 2 months ago. Same house sold for 100k 2008.

How much more can it go down by I'm thinking. Maybe it could fall to 40k. Anything below that then at least every1 who has bought property in the last 11 years is financialy f00ked. Especialy 1st time buyers who have nothing to fall back on
Report Eeternaloptimist July 13, 2012 12:15 PM BST
If your job is relatively safe and you can afford the repayments including if interest rates did rise then you've done the right thing for you and that is all that counts. Who cares if it drops in value? A house is for living in for the vast majority of people and that is what you are doing.
Report carlos monzon July 17, 2012 6:40 PM BST
This was a difficult 1 and time consuming so left it till I had a bit of time on my hand.

Here's the deal I struck:

bought property for 57500. Legal fees etc etc pushed my purchase up too 60k.

Wooden floor, paint job, few beds, washing machine, tilling kitchen etc etc meant 3k more so end purchase meant I paid 63k for it as opposed to 57500.

On top of this I was lucky as I got the best mortgage possible on the Market through Halifax and avoided paying 1.5k on mortgage set up fee etc.

Now property is on rent here's the deal:

Get £400 a month, 200 goes to mortgage say £50 to tax which leaves me with £150 a month, say 1800 a year yeh.

Tenants  contract, Is for 12 months.

So if my tenant leaves in 12 months and the place is like I gave it to him then I would make 1800 max in a year.

Likelyhood is there will be at least 1k expences so in reality iv made abt £800sh on a 63k investment yeh.

Now let's say I'm lucky and in 2 years i'm gona sell it for 100k. This is wat I'm gona make:

bought property for 57500
sold for 100k

I make 42500. Seems good dnt it but here's the reality.

42500 tax it and iv made say 30k.

30k take away expences (5500 up until now) selling up solicester fee about 600-800 and doing up the place pushes expences up to say 8k.

Estate agents fee of 4% means 4k.

Add another say 3 k for summit or another.

So I buy at 57500 and sell at 100k and geza I make 15k.

Sh1t man that's a skank.

Iv paid 57500 and I need to sell this property within 2 years and to break even I must sell at 72k. That's me making f00k all by selling around the 75k mark.

Not good is it. That's the reality of it all
Report Eeternaloptimist July 17, 2012 6:43 PM BST
As Melly would say:

Buy low and sell high. LaughLaughLaughLaughLaughLaugh
Report carlos monzon July 17, 2012 6:46 PM BST
This is the first property iv ever bought. All this talk of property ladder just made me invest.

Is it me who is just f00ked or are other people on the same boat.

I'm taking about guys who wana buy to let not buy to live.
Report Eeternaloptimist July 17, 2012 7:04 PM BST
Sadly, I think there are many people in your boat carlos. Lots of people buy shares when the shoe shine boy tells em. It doesn't mean that they are a good investment at that time.
Report carlos monzon July 17, 2012 7:57 PM BST
I realy thought it was a safe option. My god how wrong I was
Report Eeternaloptimist July 17, 2012 8:05 PM BST
The point is that anybody who tells you definitively one way or another doesn't know. There are too many variables. What happens if Melly is right and everything goes pop? You have a house as opposed to a big pile of paper or paper debt and you could be laughing. All anybody can do is their best.
Report carlos monzon July 17, 2012 8:56 PM BST
That's right. Iv bought a property in June. The money I
paid for it was the same as wat som1 would have paid for it say december 2001sh.

The same property was going for between 120k and 130k in 2007 and 08.

I Feel for people who have bought properties between 2002 and 2011.
Report bongo July 17, 2012 10:05 PM BST
I feel for you carlos - a bit like you I waited and kept waiting and kept waiting until I could hold out no longer. I put down 40% deposit thinking it's no good anymore in ISAs or anywhere else.
What I don't understand about today's market ( outside London ) is why anyone with a job would be paying 400/month to rent, when they should surely buy, but they do ( choose to rent i mean ).
Report carlos monzon July 17, 2012 10:33 PM BST
Seemed like a good investment 4 months ago but I realy and truly regret it.

I feel bad for u too.

Should never have listened to family and friends.

I have never worked for the last 5 years, now I have 250 a week job and still no money. Worst thing is iv not realy lost a  big bet for the last 2 months. Worst still is if I never brought this sh1ty house I would not be in this position and would have taken at least 1500 on weekend and another 5 k on olympics.

Would have betted on the bets iv mentioned on the other thread.

I still have but put peanuts on it.

I mean winning ain't everything but losing ain't sh1t
Report Eeternaloptimist July 17, 2012 10:34 PM BST
Many reasons Bongo. Some people can't afford the deposits. Some people can't get the mortgage. Following on from that for some people the disparity between their wage and the prices being asked is too great. Some people want the flexibility and portability that renting provides. Some people think, "well yes I could afford it now but what if interest rates go back to their longer term averages?". Some people think that if interest rates do that then a further fall in house prices is inevitable and don't want the stress of negative equity. Some people think houses aren't a good investment in the short term and some people think that the housing market was in a tremendous bubble period for so long that now the love affair has ended there is need to rush.
Report Eeternaloptimist July 17, 2012 10:36 PM BST
And some people like me just got lucky. Napoleon knew the value of luck. Fat lot of good it did him in the end. LaughLaughLaughLaugh
Report carlos monzon July 17, 2012 10:37 PM BST
Can't even remortgage untill December 2012. U have to wait for at least 6 months after purchase to remortage
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