Credit deflation and the reflation cycle to come (part 8)

[Plan-b]

1 hour ago, Lightscribe said:

We haven’t got the physical silver (or could afford to buy it) to do that, we’ve been too busy shorting it and chucking it all over the fence to prop up our ponzi.

What we need for Deano to be able to shift all those new Barrett boxes, is heat pumps. Lovely, expensive, non-cost effective heat pumps on the back of some government tax payer funded brown envelope.

What we’ll do is get the mugs, to give up their new-build cashback incentives and give it to us for a pretend low rate mortgage! Win win. 
 

https://www.thesun.co.uk/money/26860672/new-first-time-buyer-scheme-cheap-mortgage-rates/amp/

 

32 minutes ago, Axeman123 said:

A bizzarre scheme: Borrower needs 40% deposit and still has to pass affordability checks etc, but instead of taking the 5% incentive from the builder up front can take it as a reduction in the monthly payments over 2 or 5 years after which they are on their own.

Who exactly does this help? Someone that can afford the house anyway IMO. This is purely headline theatre wit the 1% interest rate number - in any other industry it would be banned as missleading.

EDIT: 

5% of 180k is 9k. Taking that instead over 2 years apparently saves just under £6k in interest?  Maybe they end up with more equity too, but if monthly payments in the first 2 years are the stumbling block this scheme is meant to overcome, just how poorly does that work?

The feckers are determined to drag as many down with them as possible. What's worse it's likely aimed at a lot of young people and young families, the future life blood of the nation.

Dear morons its not more sweetly packaged debt that's required its cheaper properly priced well built housing.

Beyond Clueless is not even close.

[Axeman123]

1 minute ago, Plan-b said:

The feckers are determined to drag as many down with them as possible. What's worse it's likely aimed at a lot of young people and young families, the future life blood of the nation.

I am not sure how many young families have the deposit and affordability to qualify for the scheme though, except maybe after selling a probate?

I need to read up on builder incentives, my present assumption is that they can't legally do actual cashback against the mortgage but can do Amazon vouchers or carpet upgrades etc. This scheme seems to be right on the edge of that line, laundering the incentive back to the buyer as cash over installments via the rate buy-down. Either way the 5% is essentially instant negative equity on top of the standard new build premium.

[Plan-b]

7 minutes ago, Axeman123 said:

I am not sure how many young families have the deposit and affordability to qualify for the scheme though, except maybe after selling a probate?

Without savings their likely other avenue is BOMAD if rich enough plus I know a few downsizers that helped with kids deposits and some probate but that's about it.

In general I think the uptake will be low.

Edited March 25 by Plan-b

[Joncrete Cungle]

How much is a newbuild slave box these days? £300k? Can't see many having the £75k deposit needed to meet 75% ltv at newbuild slave box prices.

[DoINeedOne]

Great discussion on Uranium 

 

[Plan-b]

2 minutes ago, Joncrete Cungle said:

How much is a newbuild slave box these days? £300k? Can't see many having the £75k deposit needed to meet 75% ltv at newbuild slave box prices.

BTW I Cringed at the 300k slavebox not your comment.

[Long time lurking]

Anyone that thinks rates are going down and inflation doing the same are simply deluded

Edited March 25 by Long time lurking

[Joncrete Cungle]

1 minute ago, Plan-b said:

BTW I Cringed at the 300k slavebox not your comment.

The price is about right for my area (North West) add on what 50% upto 100% for darn Sarf? That's a deposit that would buy a house outright hereabouts.

[Lightscribe]

6 minutes ago, Joncrete Cungle said:

How much is a newbuild slave box these days? £300k? Can't see many having the £75k deposit needed to meet 75% ltv at newbuild slave box prices.

Down south anywhere near the M25 will be sub £500k.

They’ve been expanding out at a rapid rate, into Sussex and Kent. Even down the old people grave yard seaside towns with no work, they have asking prices of £400k+.

It’s not going to end well. Tick tock.

[Long time lurking]

57 minutes ago, Axeman123 said:

A bizzarre scheme: Borrower needs 40% deposit and still has to pass affordability checks etc, but instead of taking the 5% incentive from the builder up front can take it as a reduction in the monthly payments over 2 or 5 years after which they are on their own.

Who exactly does this help? Someone that can afford the house anyway IMO. This is purely headline theatre wit the 1% interest rate number - in any other industry it would be banned as missleading.

EDIT: 

5% of 180k is 9k. Taking that instead over 2 years apparently saves just under £6k in interest?  Maybe they end up with more equity too, but if monthly payments in the first 2 years are the stumbling block this scheme is meant to overcome, just how poorly does that work?

[Long time lurking]

This is the western puppet government making this decision 

I`m starting to hear more and more on the MSM regarding Chian`s "system" is now challenging ours always coupled with how draconian that system is apposed to our free democracy 

 

 

Edited March 25 by Long time lurking

[headrow]

Fucking house talk. Boring , Boring , fucking boring.

[Axeman123]

15 minutes ago, Long time lurking said:

Anyone that thinks rates are going down and inflation doing the same are simply deluded

Similar, lots of charts in the retweeted thread:

 

[goldbug9999]

.

Edited March 25 by goldbug9999

[onlyme]

Cocoa again. is it common for late state money printing / debt creation to visit the commodities market last after every other leveraged market gets its fill, in a rush to anything "real"?

 

[goldbug9999]

On 23/03/2024 at 17:59, Axeman123 said:

...or you just make it redeemable for the metal, and let market forces do the rest.

This doesn't work for international trade though because net movements of currency have to be covered by net movement of gold between central banks, either that or some sort of trusted custodianship is involved but we know that this wont work as is was the US losing the trust of other countries WRT its gold holdings which caused Bretton Woods to fail. This is why a BRICS gold backed trade currency is a non starter.

Edited March 25 by goldbug9999

[janch]

sorry wrong thread

Edited March 25 by janch

[JMD]

3 hours ago, Lightscribe said:

What we need for Deano to be able to shift all those new Barrett boxes, is heat pumps. Lovely, expensive, non-cost effective heat pumps on the back of some government tax payer funded brown envelope.

What we’ll do is get the mugs, to give up their new-build cashback incentives and give it to us for a pretend low rate mortgage! Win win. 

https://www.thesun.co.uk/money/26860672/new-first-time-buyer-scheme-cheap-mortgage-rates/amp/

 

Wow, with that new mortgage lending scheme it looks like they've skipped help-to-buy on steroids, and jumped straight into help-to-buy on psychotics!! 

For example, eligibility is: first time buyers/home movers/those who have previously owned property...  am i being a bit slow or does that encompass the entire nation? 

Plus the informative article helpfully warns of the pros and cons of the scheme - that after the initial low-interest period, you'll need to be prepared for interest rates to "shoot"'(!) (...you in the face presumably?!, home-buyer beware indeed!). 

 

Edited March 25 by JMD

[reformed nice guy]

2 hours ago, headrow said:

Fucking house talk. Boring , Boring , fucking boring.

I think mortgage lending, at least pre QE, was/is a very large source of currency creation (or debasement).

If mortgage lending slows it sucks funds in as debt is written off which would reduce circulating supply/ m2.

It also pumps GDP because 10% of gdp is "imputed rent" which is a function of house prices. If that imputed rent portion of gdp fell then they would have to find some other made up number to cancel the fall or actually make stuff that people want.

[Axeman123]

1 hour ago, goldbug9999 said:

This doesn't work for international trade though because net movements of currency have to be covered by net movement of gold between central banks

I would argue it works fine but that there is just a lot of fuckery that has to be curtailed for this to happen: such as trade deficits and "money printer go brrr". Those corss-border flows of physical gold aren't a bug in that system, they are a corrective mechnism to enforce discipline.

[Loki]

4 minutes ago, Axeman123 said:

I would argue it works fine but that there is just a lot of fuckery that has to be curtailed for this to happen: such as trade deficits and "money printer go brrr". Those corss-border flows of physical gold aren't a bug in that system, they are a corrective mechnism to enforce discipline.

Exactly

"But you have to move it around"

What like they did for thousands of years before hydrocarbons, the internal combustion engine and powered flight was invented?  We seem OK with using it to fly tomatoes and trampolines in from fuck knows where

Thousands of tonnes could be anywhere in the world in 24 hours

Edited March 25 by Loki

[Funn3r]

1 hour ago, goldbug9999 said:

This doesn't work for international trade though because net movements of currency have to be covered by net movement of gold between central banks, either that or some sort of trusted custodianship is involved but we know that this wont work as is was the US losing the trust of other countries WRT its gold holdings which caused Bretton Woods to fail. This is why a BRICS gold backed trade currency is a non starter.

I think I'd be a lot more inclined to accept a "BRICSdollar" for payment if on it was written "you can bring this to a BRICSbank and swap it for gold."

[NogintheNog]

1 hour ago, goldbug9999 said:

This doesn't work for international trade though because net movements of currency have to be covered by net movement of gold between central banks, either that or some sort of trusted custodianship is involved but we know that this wont work as is was the US losing the trust of other countries WRT its gold holdings which caused Bretton Woods to fail. This is why a BRICS gold backed trade currency is a non starter.

And this is exactly the reason why Bitcoin could be used as a trusted international payment. Maybe Bukele and El Salvador are ahead of the game here...

[Axeman123]

13 minutes ago, Funn3r said:

I think I'd be a lot more inclined to accept a "BRICSdollar" for payment if on it was written "you can bring this to a BRICSbank and swap it for gold."

Exactly, in practice a trusted promisary note for gold is better than gold for most users. In a historical time when gold was money deposit slips for gold were happily used as payment, which of course is the origin of paper money. It was originally created by market forces, and even a fractional reserve basis by the gold dealers was accepted by the market. The issue is that confidence must be maintained and all claims to redeem for metal honoured.

18 minutes ago, Loki said:

"But you have to move it around"

Only to settle the net trade balance, which should nearly always = zero. Persistent trade imbalances are the problem, not monetary metals.

[Long time lurking]

9 minutes ago, Loki said:

Exactly

"But you have to move it around"

What like they did for thousands of years before hydrocarbons, the internal combustion engine and powered flight was invented?  We seem OK with using it to fly tomatoes and trampolines in from fuck knows where

Thousands of tonnes could be anywhere in the world in 24 hours

It`s not about trade now it`s simply a physical store of wealth outside of the banking system

The future of international trade will be digital if the BRICS have their way ,it`s all about efficiency as in instant payments,this is what the CBDC pysop is all about P2P where there`s virtually no charge and no middle man skimming