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Made in au
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Melbourne

JWBS wrote:
 Baragash wrote:
 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.

The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.

Money is like any other good in the respect that when you increase the supply, the value goes down. This causes inflation, money is worth less so prices go up. High inflation as a result of turning on the money printer was predicted (it was a very safe prediction). The "Money printer wasn't a problem" is a party talking point that fools no one except those that are eager to spread the party line, for whatever reason (likely they just believe what they're told by the party).


Sure, that's exactly what someone whose economic credentials are "listening to talking heads push agendas in the media" would say.

See how stupid that game is?

But your explanation is so simplistic it wavers somewhere between bad and wrong

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Arkhanist, I greatly appreciate your application of nuance and educated assessment of the situation, but it has no place on the internet. Please distill your description of economic issues down to blaming a single party or factor for all of our woes

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Leicester

 NinthMusketeer wrote:
Arkhanist, I greatly appreciate your application of nuance and educated assessment of the situation, but it has no place on the internet. Please distill your description of economic issues down to blaming a single party or factor for all of our woes


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 Baragash wrote:
JWBS wrote:
 Baragash wrote:
 Waaagh_Gonads wrote:
Interesting central banks trying to lower inflation with interest rate rises.

Never in any attempt anywhere has interest rate rises worked to lower inflation once inflation got going, unless they do a massive rise and get ahead.

Australia raised rates by 0.5% this week, that has no hope of catching inflation of 5%.
1% increase this month and another 1% each month until inflation started slowing might work.

until the governments stop printing and giving out free money we are stuck with inflation, everything else will make the situation worse or have no effect.


Interest rate rises aren't the solution to the current problem, and the current problem isn't printing money.

The only thing a massive rise in interest rates will do is ensure a deep, drawn out recession.

Money is like any other good in the respect that when you increase the supply, the value goes down. This causes inflation, money is worth less so prices go up. High inflation as a result of turning on the money printer was predicted (it was a very safe prediction). The "Money printer wasn't a problem" is a party talking point that fools no one except those that are eager to spread the party line, for whatever reason (likely they just believe what they're told by the party).


Sure, that's exactly what someone whose economic credentials are "listening to talking heads push agendas in the media" would say.

See how stupid that game is?

But your explanation is so simplistic it wavers somewhere between bad and wrong

Well I haven't appealed to my credentials in this discussion as of yet and neither have I questioned yours. Having said that, your complex, nuanced, fully expounded and cited claim that "..the current problem isn't printing money" is kind of irrefutable and now that I reflect upon it a bit more it does indicate that you are highly credentialed here, so I'll defer to you on this one. (/Edit - reading my prior response again it does read as more of an attack than I intended. That particular talking point is a peeve of mine though, I suppose that's why).


Automatically Appended Next Post:
 arkhanist wrote:
..but you can't look at the money printing in isolation and ignore the risks they were trying to avoid.


I didn't intend to, but I can see that it might look that way. The retort was about as simplistic as the claim I was arguing against, yes that's on me. Other equally important drivers exist.


Automatically Appended Next Post:
This guy on Twitter says US inflation is +17%. IDK how accurate this is, given that he says measurement of inflation has changed somewhat in recent decades, but the last few statements seem to show that food is up 30%, fuel is up a lot (10-110%), and housing is up 13%, all year on year.

https://twitter.com/tomselliott/status/1535269226709241861

This message was edited 3 times. Last update was at 2022/06/12 16:08:51


 
   
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Wholesale prices up 11% in May
https://www.cnbc.com/2022/06/14/wholesale-prices-rose-10point8percent-in-may-near-a-record-annual-pace.html?__source=iosappshare%7Ccom.apple.UIKit.activity.PostToTwitter
   
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Those in the know... How absolutely spaffed up the wall is the current UK economy, and thus us poor souls who are at the whim of it?

No discussion on why it has happened obviously as it covers certain unspeakable factors?

In addition to this, I am looking into buying a place/getting a mortgage in the next few months (or was at least)... Would it be prudent to put this on hold just incase I get a bad mortgage deal or even worse, the possibly dreaded housing market crash?

I would appreciate really objective answers to the above

EDIT: To add to this, how subject is the rest of the world to this also? Can the UK drag the global economy into a recession like 2008 when the US housing bubble popped or is it not quite as dire consequences as that?

This message was edited 1 time. Last update was at 2022/09/28 17:48:17


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Those in the know... How absolutely spaffed up the wall is the current UK economy, and thus us poor souls who are at the whim of it?

Apparently the Bank of England intervened today (buying long-dated gilts enmasse) to stop "mass insolvencies" in multiple pension funds. And the IMF basically urged the Chancellor to reverse course. Even many Tory MPs think this is madness. Obviously the soaring rates for gilts and the collapse in sterling are the international money market's view, and they think Truss and Kwarteng are barking mad.

So um, we're very spaffed right now.

Mortgage wise - good deals have already been withdrawn, with new fixed rate deals looking like they anticipate the BoE will be setting rates of 6% next year (for reference; 2.25% currently, 0.1% this time last year). Mortgages are going to be MUCH more expensive from now on, and may well get worse next year.

The other factor is the expectation now that house prices will finally fall due to the massive hike in mortgage costs, maybe 10-15%; people just won't be able to afford current prices with inflation shooting even higher (the cost of importing food, clothing, fuel & medicines just went up due to collapse in sterling), plus of course energy prices, even though now subsidised and capped, are much higher than last year.

So buying a house in the near future is a big gamble; but then, everything is now so chaotic, its hard to predict whether it will get even worse, and on what timescale. For all we know, we could be looking at a tory rebellion and a general election by christmas. And the possibility of nukes actually, really coming into play in Ukraine could make all *this* look like a sideshow.

I don't think the UK economy is big enough to really screw the world economy, certainly less than Covid or the energy crisis has, but it won't be a nothing-burger either. I think the world economy is already heading to recession regardless thanks to Putin; the UK is already there, technically.

This message was edited 2 times. Last update was at 2022/09/28 18:42:38


 
   
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Ridin' on a Snotling Pump Wagon






Oh it could get so much worse, as there’s a Dog Egg in the long grass which the Lawnmower of Recession might be about to pebbledash across the Garden of the Economy.

And it’s the number of people who, during the wider associated debacle, cancelled their Mortgage PPI (MPPI)

Potted version? Anyone who complained their MPPI was mis-sold, whether or not they got a refund, defacto cancelled that policy.

Which means, when the next recession really hits (and the BoE thinks we’re already in one), and mass redundancies hit? There are potentially millions of mortgage holders with no repayment insurance should they lose their job.

Benefits will only pay the interest due - not the capital. And even that is for a short period (I think around 12 months, but don’t quote me).

Of course, the weak pound and spiralling costs could see such a recession last a long time. And whilst we currently have very low unemployment? Many of those jobs are low paying.

I know if I lost my job, I’d be shafted for finding a comparable wage. Thankfully my specific career does best, in a genuinely non-parasitic way, during Hard Economic Times, so redundancy is incredibly unlikely. Spesh in my particular super specialism.

But trust me. When that Lawn Sausage explodes? Its gonna be bad

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This is the first time I've seen dog egg used in polite conversation since way back on Portent someone said a misbehaved kid laid a clutch of dog eggs right there in the store over losing a 40k game.

This message was edited 1 time. Last update was at 2022/09/28 21:37:33


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 endlesswaltz123 wrote:
EDIT: To add to this, how subject is the rest of the world to this also? Can the UK drag the global economy into a recession like 2008 when the US housing bubble popped or is it not quite as dire consequences as that?

On the somewhat bright side, Britain has done a great job of insulating itself from the larger European and world economies, so the impact should be lessened.
   
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 arkhanist wrote:
Those in the know... How absolutely spaffed up the wall is the current UK economy, and thus us poor souls who are at the whim of it?

Mortgage wise - good deals have already been withdrawn, with new fixed rate deals looking like they anticipate the BoE will be setting rates of 6% next year (for reference; 2.25% currently, 0.1% this time last year). Mortgages are going to be MUCH more expensive from now on, and may well get worse next year.


I read today that 26% of UK mortgage holders have variable rates based on the BoE. I would think even a minor increase in rates could be catastrophic to housing no?
   
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Bodt

I'm about a third of the way through my mortgage term. Is it worth doing overpayments before the rate increases?

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 lord_blackfang wrote:
This is the first time I've seen dog egg used in polite conversation since way back on Portent someone said a misbehaved kid laid a clutch of dog eggs right there in the store over losing a 40k game.


That….may even have been one of my tales, as I have witnessed such!


Automatically Appended Next Post:
 queen_annes_revenge wrote:
I'm about a third of the way through my mortgage term. Is it worth doing overpayments before the rate increases?


Without giving Qualified Advice?

If you can afford to pay off capital, pay off capital. Probably worth checking your T&Cs though, as there may be limits for that before the bank can charge.

But I can confirm overpayments do not create a slush fund type thing against future repayment obligations.

This message was edited 2 times. Last update was at 2022/09/29 11:46:06


Fed up of Scalpers? But still want your Exclusives? Why not join us?

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I read today that 26% of UK mortgage holders have variable rates based on the BoE. I would think even a minor increase in rates could be catastrophic to housing no?


Oh indeed. And we're not looking at minor increases but huge ones. And all the people that upsized due to the pandemic and finding they needed more space are coming to the end of their (most common) 2 year fixed deals right about... now.

Plus upcoming recession job losses, the amount of rental properties that are also mortgaged (so rents will go up), the existing cost-of-living crisis that means many people are already only hanging on by their fingernails, and this could so easily go very, very pear shaped.

Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone (with a huge majority inherited from their lying predecessor and two years left before there has to be a GE) that they are so far doubling down and demanding reality conforms to their unhinged fantasy economics, while blaming Russia for everything getting worse every time they open their mouths.

Watch this space - our version of the 1998 Argentinian collapse is entirely possible (mass poverty, starving children, complete collapse of pay and the wider economy, riots) with these morons in charge. Let's hope it doesn't come to that.
   
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 arkhanist wrote:
Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone
Never ascribe to incompetence that which is adequately explained by Tory greed. Especially not after twelve straight years of the same.
   
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A.T. wrote:
 arkhanist wrote:
Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone
Never ascribe to incompetence that which is adequately explained by Tory greed. Especially not after twelve straight years of the same.


After hearing Truss on the morning regional radio interviews "defending" the new policies, there is no doubt at all that if she had any less brainpower she'd need to be put in a pot and watered twice a week. Her backers and policy gurus, sure, it's all about the grift and diverting money to Tory members and donors. I'd call her a true believer in Ayn Rand, but I'm not sure she's even capable of enough independent thought to qualify as belief. And Kwarteng is little better.
   
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 endlesswaltz123 wrote:


EDIT: To add to this, how subject is the rest of the world to this also? Can the UK drag the global economy into a recession like 2008 when the US housing bubble popped or is it not quite as dire consequences as that?


I've been reading on places like Reuters that the US is, in its own way heading toward heavy recession (again) as well. . . So I guess, "race ya to the bottom??"


For me, job security in my current job in a recession is great. . . history shows us when theres big recessions, people fix their cars far, far more than they do buying/selling them. So as a parts guy (currently) that is decent news. Problem is, I have certain views on subjects like climate change, build quality, and corporate decisions that means. . . Realistically, I need to get the hell out of dodge to save my sanity.
   
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 arkhanist wrote:
A.T. wrote:
 arkhanist wrote:
Of course, there remain options to stabilise things, but the brand new PM and chancellor are so convinced they know better than literally everyone
Never ascribe to incompetence that which is adequately explained by Tory greed. Especially not after twelve straight years of the same.


After hearing Truss on the morning regional radio interviews "defending" the new policies, there is no doubt at all that if she had any less brainpower she'd need to be put in a pot and watered twice a week. Her backers and policy gurus, sure, it's all about the grift and diverting money to Tory members and donors. I'd call her a true believer in Ayn Rand, but I'm not sure she's even capable of enough independent thought to qualify as belief. And Kwarteng is little better.


The inflation really seems like a ticking time bomb.

This message was edited 1 time. Last update was at 2022/09/30 03:36:18


 
   
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To be fair the fething planet seems like a ticking time bomb right now, between climate change on the environmental end and wealth disparity on the social one.

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I chose an avatar I feel best represents the quality of my post history.

I try to view Warhammer as more of a toolbox with examples than fully complete games. 
   
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 queen_annes_revenge wrote:
I'm about a third of the way through my mortgage term. Is it worth doing overpayments before the rate increases?


DISCLAIMER: I am not a financial expert. Take this with the appropriate amount of salt and consider consulting a financial expert for proper guidance.

By and large it depends entirely on the terms of your mortgage. Some mortgages have penalties for early payments; some do not. If there are no penalties for early payment, strictly considering just the mortgage it is ALWAYS worth overpaying, as it reduced the amount of interest you wind up paying.

Now the real question is, will you save more in interest doing that than you would by paying off a different, higher-interest debt... or if you could EARN more return on that money by investing it elsewhere than you'd save in interest.

If there are penalties, you have to calculate if you'll save more money in reduced interest than you will spend in penalty payments.

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