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So we can have cheaper houses and controlled inflation.
http://www.rte.ie/news/2008/0605/housing.html
So we can have cheaper houses and controlled inflation.
This has been on the cards for a while, but I heard some "economist" on matt cooper saying it was unlikely to happen due to the housing market colapse.....this man was of course an employee of a bank, did not catch his name. Poor man seens to have forgotten that Ireland is not the center of europe....
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I would find an ECB interest rate increase somewhat surprising. Didn't recent German sentiment decline as well as some output figures? It's the last thing Ireland needs. Oh well, maybe it's just Trichet and the ECB trying to talk down inflation.
A society of sheep must in time beget a government of wolves. (B. de Jouvenel)
Thats his remit....Originally Posted by rockyracoon
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As someone who has speculated on a house price crash by not buying I welcome this.
i got a mortgage a few months ago, and the mortgage broker tried to tell me that rates were going to fall. I explained that the ECBS major concern was inflation, and this seemed like news to her. luckily, i opted to fix the rate for a few years. i wonder how many of this person's customers listened to the moron.
The political establishment lacks both vision and courage.
I understand it's his remit. No arguments there. Does he have to meet a specific inflation rate target within a specified time period? Nevertheless, not good news for Ireland or Spain. I also understand the BOE is talking about raising rates but is holding off doing so for the immediate future.Thats his remit....
A society of sheep must in time beget a government of wolves. (B. de Jouvenel)
Oil prices have gone up by more than 30%;
because of this food prices, transport costs, manufacturing costs etc have also risen.
Therefore, the result is higher inflation.
Monsr. Trichet wants to INCREASE interest rates...thus further increasing the costs to EU oil importing/distributing companies; leading to higher food prices, transport costs, manufacturing costs etc ...thus resulting to even higher inflation
If the threatened interest rate rise does come through, it will lead to further job cuts all over the EU; EU countries become less competitive, leading to more job losses; leading to less local purchase, less tax collected, more cutbacks, more job losses.
Can anyone please explain Mons. Trichet's thinking?
(A little note to those who think they are 'safe/clever' because they didn't buy a house and hope to get one cheaper.
You'll need a full-time job to be able to buy a house even if the price was 40,000 Euros....yes, forty thousand....and jobs are the first to go in this scenario.)
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It will be a lot more than 40k by the time this bubble has collapsed.
No you muppet increased interest rates would increase the value of the Euro vis-a-vis the dollar meaning that oil would be cheaper for Europeans. Please note that the German economy is piling on jobs and their house prices have remained flat.Oil prices have gone up by more than 30%;
because of this food prices, transport costs, manufacturing costs etc have also risen.
Therefore, the result is higher inflation.
Monsr. Trichet wants to INCREASE interest rates...thus further increasing the costs to EU oil importing/distributing companies; leading to higher food prices, transport costs, manufacturing costs etc ...thus resulting to even higher inflation
If the threatened interest rate rise does come through, it will lead to further job cuts all over the EU; EU countries become less competitive, leading to more job losses; leading to less local purchase, less tax collected, more cutbacks, more job losses.
Can anyone please explain Mons. Trichet's thinking?
(A little note to those who think they are 'safe/clever' because they didn't buy a house and hope to get one cheaper.
You'll need a full-time job to be able to buy a house even if the price was 40,000 Euros....yes, forty thousand....and jobs are the first to go in this scenario.)
There is also something known as the wage inflation spiral that Mr Trichet is trying to avoid.
I don't know what age you are but you should know (if you're under 25) that interest rates in this country have been considerably higher during your lifetime indeed multiples of the current rate.
PS Only the housing VIs in this country think interest rates are "high", because for 3 or 4 years from 2001 to 2006ish they could flog "houses" at unfeasibly and unjustifably low interest rates ergo when interest rates return to more "normal" levels their ponzai/house of cards/edifice of bull which the refered to as the "MORKET" as a model is Donald Ducked and they have to get up of their butts and work for a living.
No country became rich on loose credit and on selling houses to one another.
Remember Mr Trichet was FT's man of the year, a considerable accolade for a Frenchman to get from an establishment British newspaper. Mr Trichet is not Ben Bernanke and isn't going to reward chancers.
NB It's worth noting that it's over 200 years since Adam Smith said the natural rate of interest is 5% and we're a good bit away from that yet.
"I'm not a member of the establishment" B Lenihan BL, T.D., Min for Fin, Son of Fmr Tanaiste Nephew of a fmr Dep leader of FF and min and brother of a Jun Min. Bertie made the Sheeple happy.
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