Friday, 30 August 2013

Eh? Something is not quite right...

George Osborne: Funding for lending

Declared purpose:- ‘Policy; Making it easier to set up and grow a business’

See here

Outcome: Bank of England:

- This is money: ‘Buy to Let surges…’

- Telegraph; ‘Helped some borrowers and a disaster for savers’

George Osborne: Help to Buy

Mark Carney: Forward Guidance

“…The Bank has now told the market that it intends to keep this rate at its current historically low 0.5% at least until the unemployment rate falls to 7% or below.”



IFAonline: House prices continue their ‘brisk rise’

Telegraph: House Prices Rise in August

Telegraph: Mark Carney is ‘ready to pop the housing bubble.

So, let’s get this straight. Osborne and Carney go all out on interventions and manipulation of interest rates and subsidies to landowners both existing and wannabe. And then, when this creates a bubble they carry out more interventions to correct the failure of their previous interventions. One of us is going mad here. Is it me or is it Osborne/Carney?


Weekend Yachtsman said...

No, you're not mad - it's business as usual for the state:

Impose more state meddling in an attempt to rectify a problem that was caused by state meddling in the first place.

The correct response of "reduce state meddling" is never contemplated; the state must always expand.

Bayard said...

"One of us is going mad here. Is it me or is it Osborne/Carney?"

Neither. The error lies in mistaking the declared purpose for the true purpose. True purpose: - Policy; Making house prices go up to generate a feelgood factor amoungst the electorate.
In this they have succeeded admirably. However, they are not completely stupid and they realise that you can't fool all of the people any of the time, so they have to be seen to be "doing something" about the "housing bubble" (In Polworld, house prices going up = good, housing bubble = bad, so they have the difficult task of assuring the electorate that although prices are going up, it is not a bubble, and that any signs of a bubble will be stamped on pronto, without stopping prices going up and making everyone richer, if you see what I mean.)

Mark Wadsworth said...

I second what WY and B have said.

Ben Jamin' said...

Can we start another petition to ban the use of the phrase " rising house prices" from public discourse?

I very much doubt if the price of bricks and mortar rises much above inflation.

Rising property prices, better.

Rising location value, best.

Bayard said...

BJ, I'd like to say "rising land prices" but too many people would think I was talking about farmland.