It is Obvious

Chris Rick has got altogether too much to say

My home is…where I live

Posted by chrisrick13 on April 2, 2015

It is obvious: watch out for rocks

The people I know are in two groups: the smug ones like me with no mortgage and the poor b@st@rds with one.  Of those with a mortgage many of them have no slack in their budget.  I have moaned much but it has happened: although not enough, mortgage interest rates have come down.  Be very sure that if interest rates go up then so will mortgage interest rates.  There are a lot of fixed rates in place but not for that long.

So if interest rates go up just a point then a lot of people will lose their houses.  A lot of misery that I don’t want to see visited on these people.

What will be the other effect?  Either banks will have a lot of bad loans and will go bust (sic) or we (you and me) will rescue them again.  Actually: no.  I don’t think it will be that way as the banks are only lending to people who can put up a large percentage of the value of the house.  So they can chop the price and sell the house without loss when they repossess.  Thus crashing the house market.

There are still a lot of people trapped in negative equity or close to it.  Disposing of those houses will cause losses to the banks.  You and I have deep pockets though.  Couple of thousand should do it – I’ll be round for the cheque later.

Why would we want to put interest rates up?

1.  The GBP is plunging in value.
2.  Inflation is rising.
3.  We are such a risk as a nation that nobody will lend to us at other than high rates of interest.

So we are OK for the moment.  But at any point we could be forced to raise interest rates to save the economy which will of course crash the economy.

So why do I never hear this discussed in the media?

It is obvious: watch out for rocks…and hard places too

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