RugbyRebels

Puja wrote: ↑Sun Aug 06, 2023 1:22 pm

Banquo wrote: ↑Sun Aug 06, 2023 11:20 am

Sandydragon wrote: ↑Sat Aug 05, 2023 7:47 pm

Our government has devolved the fight against inflation to he BoE. Much easier to fire shots at the bank’s governors.

That was done about 25 years ago to be fair, Though I don't feel like being fair mostly.

Disagree - 25 years ago the interest rates were devolved to the BoE. The government still has plenty of tools to fight inflation in their own hands; they're just pretending they don't and insisting it's up to the BoE to do something.

Puja

You need to tell the BofE 'We also work to keep the cost of living stable so your money keeps its purchasing power. One way we do this is by changing the main interest rate in the UK.''....though that is a fair point you make. Still I'm sure all the economists on here know better
https://www.bankofengland.co.uk/about

Banquo wrote: ↑Sun Aug 06, 2023 1:59 pm

Puja wrote: ↑Sun Aug 06, 2023 1:22 pm

Banquo wrote: ↑Sun Aug 06, 2023 11:20 am
That was done about 25 years ago to be fair, Though I don't feel like being fair mostly.

Disagree - 25 years ago the interest rates were devolved to the BoE. The government still has plenty of tools to fight inflation in their own hands; they're just pretending they don't and insisting it's up to the BoE to do something.

Puja

You need to tell the BofE 'We also work to keep the cost of living stable so your money keeps its purchasing power. One way we do this is by changing the main interest rate in the UK.''....though that is a fair point you make. Still I'm sure all the economists on here know better
https://www.bankofengland.co.uk/about

Yes, the BoE also has quantitive easing levels and stopping bond purchases which is can choose to do as well. So they've got three levers, as compared with the entire legislative power of the elected branch of government, which is currently gathering dust.

Puja

Puja wrote: ↑Sun Aug 06, 2023 2:17 pm

Banquo wrote: ↑Sun Aug 06, 2023 1:59 pm

Puja wrote: ↑Sun Aug 06, 2023 1:22 pm

Disagree - 25 years ago the interest rates were devolved to the BoE. The government still has plenty of tools to fight inflation in their own hands; they're just pretending they don't and insisting it's up to the BoE to do something.

Puja

You need to tell the BofE 'We also work to keep the cost of living stable so your money keeps its purchasing power. One way we do this is by changing the main interest rate in the UK.''....though that is a fair point you make. Still I'm sure all the economists on here know better
https://www.bankofengland.co.uk/about

Yes, the BoE also has quantitive easing levels and stopping bond purchases which is can choose to do as well. So they've got three levers, as compared with the entire legislative power of the elected branch of government, which is currently gathering dust.

Puja

Pretty big levers and they certainly see inflation reduction as a central purpose. What new legislation are you proposing out of interest (sic)

Banquo wrote: ↑Sun Aug 06, 2023 2:21 pm

Puja wrote: ↑Sun Aug 06, 2023 2:17 pm

Banquo wrote: ↑Sun Aug 06, 2023 1:59 pm
You need to tell the BofE 'We also work to keep the cost of living stable so your money keeps its purchasing power. One way we do this is by changing the main interest rate in the UK.''....though that is a fair point you make. Still I'm sure all the economists on here know better
https://www.bankofengland.co.uk/about

Yes, the BoE also has quantitive easing levels and stopping bond purchases which is can choose to do as well. So they've got three levers, as compared with the entire legislative power of the elected branch of government, which is currently gathering dust.

Puja

Pretty big levers and they certainly see inflation reduction as a central purpose. What new legislation are you proposing out of interest (sic)

Well, we did come into this conversation at the point of all the stuff the Spanish have done which appears to be working quite well.

Puja

Banquo wrote: ↑Sun Aug 06, 2023 11:20 am

Sandydragon wrote: ↑Sat Aug 05, 2023 7:47 pm

Puja wrote: ↑Sat Aug 05, 2023 11:08 am

A govenment in "actually doing something" shocker. I hadn't heard about Spain taking that tack, but it's quite nice to see the approach I've been bleating about being tried in the real world and succeeding.

Puja

Our government has devolved the fight against inflation to he BoE. Much easier to fire shots at the bank’s governors.

That was done about 25 years ago to be fair, Though I don't feel like being fair mostly.

I know, and in principle I agree with BoE independence. But it does make it easier for useless politicians to wipe their hands of certain economic issues and just blame the bank.

It is worth pointing out that the uk government is desperately trying to attract big business following Brexit, which is sensible, so getting businesses to accept greater regulation when you’re regarded as a tin pot joke on the edge of one of the worlds biggest trading blocks probably isn’t a great idea.

Sandydragon wrote: ↑Sun Aug 06, 2023 5:25 pm

Banquo wrote: ↑Sun Aug 06, 2023 11:20 am

Sandydragon wrote: ↑Sat Aug 05, 2023 7:47 pm

Our government has devolved the fight against inflation to he BoE. Much easier to fire shots at the bank’s governors.

That was done about 25 years ago to be fair, Though I don't feel like being fair mostly.

I know, and in principle I agree with BoE independence. But it does make it easier for useless politicians to wipe their hands of certain economic issues and just blame the bank.

I’d be all for education and health/social care being taken out of politicians hands/cycles. The economy less so.

Banquo wrote: ↑Sun Aug 06, 2023 5:29 pm

Sandydragon wrote: ↑Sun Aug 06, 2023 5:25 pm

Banquo wrote: ↑Sun Aug 06, 2023 11:20 am
That was done about 25 years ago to be fair, Though I don't feel like being fair mostly.

I know, and in principle I agree with BoE independence. But it does make it easier for useless politicians to wipe their hands of certain economic issues and just blame the bank.

I’d be all for education and health/social care being taken out of politicians hands/cycles. The economy less so.

Maybe, except if you look at the US then there’s a similarly powerful Fed but also a government that seems able to make policy and effect change.

The BoE was too slow in responding to this crisis I think, but the government can’t just stick its head in the sand and moan it can’t do anything.

Sandydragon wrote: ↑Sun Aug 06, 2023 7:55 pm

Banquo wrote: ↑Sun Aug 06, 2023 5:29 pm

Sandydragon wrote: ↑Sun Aug 06, 2023 5:25 pm

I know, and in principle I agree with BoE independence. But it does make it easier for useless politicians to wipe their hands of certain economic issues and just blame the bank.

I’d be all for education and health/social care being taken out of politicians hands/cycles. The economy less so.

Maybe, except if you look at the US then there’s a similarly powerful Fed but also a government that seems able to make policy and effect change.

The BoE was too slow in responding to this crisis I think, but the government can’t just stick its head in the sand and moan it can’t do anything.

Kinda what I’m saying- though this govt has been highly interventionist in the economy in the round, certainly for a Tory one.

I agree. Boris wasn’t a traditional Tory and pushed a lot of policies that normally would be too interventionist for a Tory government. Then again the pandemic was genuinely unusual and I don’t think any government could have not intervened in that situation.

Sunak I think wants to pull back from that. But it’s a hard thing to do when people have got used to it, even if the Tory right are trying hard to do just that.

Sandydragon wrote: ↑Sun Aug 06, 2023 5:28 pm It is worth pointing out that the uk government is desperately trying to attract big business following Brexit, which is sensible, so getting businesses to accept greater regulation when you’re regarded as a tin pot joke on the edge of one of the worlds biggest trading blocks probably isn’t a great idea.

Crushing any hint of growth in the economy and grinding it beneath the heel of 14 successive interest rate rises is probably not doing a whole bunch for that either, especially when that's still only brought inflation down to 7.9%. Big business wants stability and I think they're more likely to be put off by the imminent collapse of the economy/government/social contract than they would be by sensible regulation.

Puja

Puja wrote: ↑Sun Aug 06, 2023 9:54 pm

Sandydragon wrote: ↑Sun Aug 06, 2023 5:28 pm It is worth pointing out that the uk government is desperately trying to attract big business following Brexit, which is sensible, so getting businesses to accept greater regulation when you’re regarded as a tin pot joke on the edge of one of the worlds biggest trading blocks probably isn’t a great idea.

Crushing any hint of growth in the economy and grinding it beneath the heel of 14 successive interest rate rises is probably not doing a whole bunch for that either, especially when that's still only brought inflation down to 7.9%. Big business wants stability and I think they're more likely to be put off by the imminent collapse of the economy/government/social contract than they would be by sensible regulation.

Puja

Have I suggested anywhere that this government is doing a good job? Business has been managing with uncertainty since Brexit; everything this government has done between 2016 and the outbreak of Covid only made that worse. Now they are trying to fix some of the long and short term issues that the Ukraine war has brought to a head and Sunak (who wants to leave the market to its own devices) can’t keep his party in line if he were to try anything too radical. So they meander along as a zombie government.

I have just got home from a little over a week in the UK. In Twickenham, actually, an area that has been quite well off.

I'm not alone. A friend of my sister has been living in Australia for 8 years, and she has just returned home, probably for good. So I thought I'd ask her...

Both of us agreed, the area is just run down. The streets are dirty, the shops are tatty, paint is peeling, the signs are faded, high streets are full of fast food chains and charity shops. And people don't look good. They're struggling. Struggling to see their doctor, struggling with stress related illness.

Honestly, being "home" was a pretty awful experience.

And the worst part is that the older generation seem so totally oblivious. My mum works for a school, and she sees these deprived kids every single day. But according to her, it's the parents who are at fault. Not the fact that those parents need to both work double jobs to survive with kids. That they see no way out of their situation...

My great aunt is a nun, she has been heading up a convent in Wales full of old nuns who need care. She's in her late 70s. They weren't making any money, and the government would not fund them unless they turned the chapel into a multi-faith wedding venue. Now, I get this: there's just not the demand for Catholic weddings any more. I even shared some stats about "conversion rates" being at their lowest ever levels for Catholics (and moderate Jews for that matter), while Islam gets new conversions on the regular, as do the more humanist branches of Christianity.

But my parents compare it to the money given to build a mosque, and how disgusting it is...they've just turned into massive racists. And it's sickening. Absolutely brainwashed. And unwilling to process information.

Unrelatedly, my father was complaining that so many people were buying "expensive" Teslas. And I said they weren't actually that expensive, and were comparable in price to an equivalent petrol car. I then dug up the list prices, and quoted them. I was right. But he couldn't accept it. It's because I don't live there, I don't see what people are like...

This is what people have been reduced to, and it's sickening.

Whatever thoughts I had of having the UK as a backup plan incase the government over here finally kill of Waldorf (Steiner) education have just disappeared. There is no way in hell I want to spend any extended time in the UK.

It's upsetting, to be honest. Considering the situation over here, with the 30% inflation and people struggling like hell, people still seem better put together than in Twickenham and surroundings. Which is amazing.

So sad.

The issue about school children turning up (or not) without proper nourishment or apparently neglected isn’t new. My wife has worked in schools for years and it’s common. When you look into the situation, it often is the fault of the parents, many of whom have had their addictions that have interfered with the care of the children.

You can say that those parents needs help and not be wrong. But they are also adults and any good parent puts the needs of their children before their own.

The recent cost of living crisis has probably hurt far more families and led to greater deprivation, which just isn’t the fault of parents working multiple jobs. But I’d suggest your mum has plenty of experience of the situation before the current crisis on which she is basing her views.

The Tesla point is an interesting one. They were very expensive vehicles for a while but not so outlandish now. Equally I suspect many people buy them on HP or similar. Compared to a second hand car, they all seem like a huge investment when they are many times more expensive than something decent with a few miles on the clock. I’ve heard the same views and I expect that is a generational thing. Once you bought your car outright now the vast majority of new cars are on credit.

There’s one other side the the religious but, and that’s the perseverance that many Islamic community leaders have. Rather than lodge an initial request (followed by the automatic appeal) they keep badgering officials for years to get the result they want. Part of it is down to numbers and many traditional Christian churches are old and at risk of closure, but that’s not the whole picture.

Sandydragon wrote: ↑Tue Aug 08, 2023 10:38 am The issue about school children turning up (or not) without proper nourishment or apparently neglected isn’t new. My wife has worked in schools for years and it’s common. When you look into the situation, it often is the fault of the parents, many of whom have had their addictions that have interfered with the care of the children.

You can say that those parents needs help and not be wrong. But they are also adults and any good parent puts the needs of their children before their own.

The recent cost of living crisis has probably hurt far more families and led to greater deprivation, which just isn’t the fault of parents working multiple jobs. But I’d suggest your mum has plenty of experience of the situation before the current crisis on which she is basing her views.

The Tesla point is an interesting one. They were very expensive vehicles for a while but not so outlandish now. Equally I suspect many people buy them on HP or similar. Compared to a second hand car, they all seem like a huge investment when they are many times more expensive than something decent with a few miles on the clock. I’ve heard the same views and I expect that is a generational thing. Once you bought your car outright now the vast majority of new cars are on credit.

There’s one other side the the religious but, and that’s the perseverance that many Islamic community leaders have. Rather than lodge an initial request (followed by the automatic appeal) they keep badgering officials for years to get the result they want. Part of it is down to numbers and many traditional Christian churches are old and at risk of closure, but that’s not the whole picture.

No, these are kids who are just not getting the attention they need. And that, for me, is a sociological issue. Parents are unable to give their kids full attention any more. I know that from my own experience. We cannot spend the summers with the kids anymore, it's just not financially viable. We need to work. And we're relatively OK financially.

My point is that if parents have been promised a certain life, and have had the rug pulled out from them, it can be really hard to adjust. Do you work harder to afford the life you wanted, just to miss out on it? Or do you give up on that life completely, and work less, living a life that you thought you were going to be "above"?

It's not a choice anyone in today's society should be making, as corporations turn record profits.


But...more pertinently, my point was entirely about how run down and downtrodden it felt. And how the older generation just fail to see this somehow, even though they're struggling just as much. How them not being able to turn the heating on is not the fault of private corporations making massive profits... It's insane how blind they are, and how they've all just lapped up the propaganda.

Here, at least, even the supporters of the government among the educated admit to many issues being on the government. And there aren't many supporters among the educated.

I’m not disagreeing with your point that more parents are struggling now, just making the point that many school children have had it bad for years because of parental issues. My wife was very jaded after years of dealing with children whose parents are drug abusers, alcoholics, gamblers, prostitutes etc etc and that may well be affecting your mothers view even before the current cost of living crisis. It’s certainly a common issue across many state sector schools, particularly comprehensives.

I think the propaganda aspect depends where you live. In Stoke there are plenty who hate the Tories regardless. I do agree that at a certain point politics becomes tribal rather than logical.

A question for those who understand how the banking system works.

What happens to the extra money people pay on their mortgages when B of E rates rise? I know it’s supposed to dampen demand in the economy, and I’m sure it’s not just a gift to the banks. It’s the interaction between the banks and the B of E that I don’t get. Does the money from those extra payments simply cease to exist?

I ask because I have heard it mooted that a better way to control spending would be through taxation, which would spread the load away from mortgage holders and private renters. This has the added bonus of providing a vast pot of cash that can be given to Tory donors in dodgy government contracts and thereby increase the donation amounts the Tories will get to fight the next general election with.

The banks don’t generally complain when interest rates rise

https://www.investopedia.com/ask/answer ... 0investing.

The BoE claims not to make money when the bank rate rises

https://www.bankofengland.co.uk/faq/inf ... 0with%20us.

canta_brian wrote: ↑Sat Aug 19, 2023 6:37 am A question for those who understand how the banking system works.

What happens to the extra money people pay on their mortgages when B of E rates rise? I know it’s supposed to dampen demand in the economy, and I’m sure it’s not just a gift to the banks. It’s the interaction between the banks and the B of E that I don’t get. Does the money from those extra payments simply cease to exist?

I ask because I have heard it mooted that a better way to control spending would be through taxation, which would spread the load away from mortgage holders and private renters. This has the added bonus of providing a vast pot of cash that can be given to Tory donors in dodgy government contracts and thereby increase the donation amounts the Tories will get to fight the next general election with.

Generally speaking, banks do not lend their own money when they do a mortgage. They borrow a pot of money from the markets (or from the central bank) for a set rate for a set period of time - 2 years, 3 years, 5 years or 10 years - and then they lend that money out for fixed/discount/tracker rate deals that run for the same period. Someone remortgages at the end of their fixed rate deal? The bank then repays their debt. They don't remortgage and stay on the high standard variable rate? The bank is also now on a higher rate, but they've passed that onto the client.

Generally speaking, that's why mortgage rise when the BoE rate does - because it gets more expensive for banks to borrow the money that they want to lend out. While the mortgage providers are likely padding their profits along the way, it's not all going to them.

Puja

Puja wrote: ↑Sat Aug 19, 2023 10:29 am

canta_brian wrote: ↑Sat Aug 19, 2023 6:37 am A question for those who understand how the banking system works.

What happens to the extra money people pay on their mortgages when B of E rates rise? I know it’s supposed to dampen demand in the economy, and I’m sure it’s not just a gift to the banks. It’s the interaction between the banks and the B of E that I don’t get. Does the money from those extra payments simply cease to exist?

I ask because I have heard it mooted that a better way to control spending would be through taxation, which would spread the load away from mortgage holders and private renters. This has the added bonus of providing a vast pot of cash that can be given to Tory donors in dodgy government contracts and thereby increase the donation amounts the Tories will get to fight the next general election with.

Generally speaking, banks do not lend their own money when they do a mortgage. They borrow a pot of money from the markets (or from the central bank) for a set rate for a set period of time - 2 years, 3 years, 5 years or 10 years - and then they lend that money out for fixed/discount/tracker rate deals that run for the same period. Someone remortgages at the end of their fixed rate deal? The bank then repays their debt. They don't remortgage and stay on the high standard variable rate? The bank is also now on a higher rate, but they've passed that onto the client.

Generally speaking, that's why mortgage rise when the BoE rate does - because it gets more expensive for banks to borrow the money that they want to lend out. While the mortgage providers are likely padding their profits along the way, it's not all going to them.

Puja

Ok cool. So the extra money paid by the mortgagee simply ceases to exist. It’s paid to the bank but is of no value because the value of zero has effectively been increased.

canta_brian wrote: ↑Sat Aug 19, 2023 12:36 pm

Puja wrote: ↑Sat Aug 19, 2023 10:29 am

canta_brian wrote: ↑Sat Aug 19, 2023 6:37 am A question for those who understand how the banking system works.

What happens to the extra money people pay on their mortgages when B of E rates rise? I know it’s supposed to dampen demand in the economy, and I’m sure it’s not just a gift to the banks. It’s the interaction between the banks and the B of E that I don’t get. Does the money from those extra payments simply cease to exist?

I ask because I have heard it mooted that a better way to control spending would be through taxation, which would spread the load away from mortgage holders and private renters. This has the added bonus of providing a vast pot of cash that can be given to Tory donors in dodgy government contracts and thereby increase the donation amounts the Tories will get to fight the next general election with.

Generally speaking, banks do not lend their own money when they do a mortgage. They borrow a pot of money from the markets (or from the central bank) for a set rate for a set period of time - 2 years, 3 years, 5 years or 10 years - and then they lend that money out for fixed/discount/tracker rate deals that run for the same period. Someone remortgages at the end of their fixed rate deal? The bank then repays their debt. They don't remortgage and stay on the high standard variable rate? The bank is also now on a higher rate, but they've passed that onto the client.

Generally speaking, that's why mortgage rise when the BoE rate does - because it gets more expensive for banks to borrow the money that they want to lend out. While the mortgage providers are likely padding their profits along the way, it's not all going to them.

Puja

Ok cool. So the extra money paid by the mortgagee simply ceases to exist. It’s paid to the bank but is of no value because the value of zero has effectively been increased.

Sort of. It depends who the banks are borrowing from, cause "the markets" is a nebulous bullshit term. If it's imaginary money created by the central bank, then yes, it's all fictional. However, it may be from hedge funds/pensions/investors, in which case it's good news for rich people as they're getting better returns from their investments. In theory, that results in more supply of money to the banks (because more people/entities are interested in investing in lending to them), which reduces the amount that they have to pay to borrow (called "swap rates"), which then reduces the mortgage rates, as mortgage lenders start competing for your business. But there's a lot of opportunities for this not to be passed onto the average Joe, or at least not immediately.

Puja

Puja wrote: ↑Sat Aug 19, 2023 2:17 pm

canta_brian wrote: ↑Sat Aug 19, 2023 12:36 pm

Puja wrote: ↑Sat Aug 19, 2023 10:29 am

Generally speaking, banks do not lend their own money when they do a mortgage. They borrow a pot of money from the markets (or from the central bank) for a set rate for a set period of time - 2 years, 3 years, 5 years or 10 years - and then they lend that money out for fixed/discount/tracker rate deals that run for the same period. Someone remortgages at the end of their fixed rate deal? The bank then repays their debt. They don't remortgage and stay on the high standard variable rate? The bank is also now on a higher rate, but they've passed that onto the client.

Generally speaking, that's why mortgage rise when the BoE rate does - because it gets more expensive for banks to borrow the money that they want to lend out. While the mortgage providers are likely padding their profits along the way, it's not all going to them.

Puja

Ok cool. So the extra money paid by the mortgagee simply ceases to exist. It’s paid to the bank but is of no value because the value of zero has effectively been increased.

Sort of. It depends who the banks are borrowing from, cause "the markets" is a nebulous bullshit term. If it's imaginary money created by the central bank, then yes, it's all fictional. However, it may be from hedge funds/pensions/investors, in which case it's good news for rich people as they're getting better returns from their investments. In theory, that results in more supply of money to the banks (because more people/entities are interested in investing in lending to them), which reduces the amount that they have to pay to borrow (called "swap rates"), which then reduces the mortgage rates, as mortgage lenders start competing for your business. But there's a lot of opportunities for this not to be passed onto the average Joe, or at least not immediately.

Puja

So the usual system with the usual people benefiting and the usual people losing out.

canta_brian wrote: ↑Sat Aug 19, 2023 2:26 pm

Puja wrote: ↑Sat Aug 19, 2023 2:17 pm

canta_brian wrote: ↑Sat Aug 19, 2023 12:36 pm

Ok cool. So the extra money paid by the mortgagee simply ceases to exist. It’s paid to the bank but is of no value because the value of zero has effectively been increased.

Sort of. It depends who the banks are borrowing from, cause "the markets" is a nebulous bullshit term. If it's imaginary money created by the central bank, then yes, it's all fictional. However, it may be from hedge funds/pensions/investors, in which case it's good news for rich people as they're getting better returns from their investments. In theory, that results in more supply of money to the banks (because more people/entities are interested in investing in lending to them), which reduces the amount that they have to pay to borrow (called "swap rates"), which then reduces the mortgage rates, as mortgage lenders start competing for your business. But there's a lot of opportunities for this not to be passed onto the average Joe, or at least not immediately.

Puja

So the usual system with the usual people benefiting and the usual people losing out.

Almost as if capitalism is rigged.

Puja

Puja wrote: ↑Sat Aug 19, 2023 2:17 pm

canta_brian wrote: ↑Sat Aug 19, 2023 12:36 pm

Puja wrote: ↑Sat Aug 19, 2023 10:29 am

Generally speaking, banks do not lend their own money when they do a mortgage. They borrow a pot of money from the markets (or from the central bank) for a set rate for a set period of time - 2 years, 3 years, 5 years or 10 years - and then they lend that money out for fixed/discount/tracker rate deals that run for the same period. Someone remortgages at the end of their fixed rate deal? The bank then repays their debt. They don't remortgage and stay on the high standard variable rate? The bank is also now on a higher rate, but they've passed that onto the client.

Generally speaking, that's why mortgage rise when the BoE rate does - because it gets more expensive for banks to borrow the money that they want to lend out. While the mortgage providers are likely padding their profits along the way, it's not all going to them.

Puja

Ok cool. So the extra money paid by the mortgagee simply ceases to exist. It’s paid to the bank but is of no value because the value of zero has effectively been increased.

Sort of. It depends who the banks are borrowing from, cause "the markets" is a nebulous bullshit term. If it's imaginary money created by the central bank, then yes, it's all fictional. However, it may be from hedge funds/pensions/investors, in which case it's good news for rich people as they're getting better returns from their investments. In theory, that results in more supply of money to the banks (because more people/entities are interested in investing in lending to them), which reduces the amount that they have to pay to borrow (called "swap rates"), which then reduces the mortgage rates, as mortgage lenders start competing for your business. But there's a lot of opportunities for this not to be passed onto the average Joe, or at least not immediately.

Puja

Pension investments benefits not just rich people.