It is Obvious

Chris Rick has got altogether too much to say

The grand old Duke of York

Posted by chrisrick13 on June 11, 2015

It is obvious: buy yourself a house

I notice that a lot of central banks are cutting their base rates (or equivalent).  Of course the MPC sets our interest rates and the MPC and is beyond political influence.

A lot of the cuts are in economies that are growing with inflation on the up as well.  That used to be a sign that an interest rate increase was on the way.  Indeed in the UK there would be a media clamour if inflation and growth took off for an interest rate hike.  There would be all sorts of accusations about political timing and not the good of the economy.  In the US they look at the entrails of Janet Yellen’s words.  The language is heavily encoded but there is no code book.

I could go on about how poor the system is at the moment.  Were I a conspiracy theory proponent I would be looking into what the real story is.

It does not make sense to cut a base rate in a growing economy.  We did that 6 years ago to save a depression.  Does that mean we can expect one now?

When you cannot explain someone’s actions with the information you do have then you are missing information.  Any attempt to work with the information you do have to get to the result is just a guess.

Therefore something is happening.  I wonder what it is?

How about this: house prices in Mayfair are down 22% from their peak and 16% down in Chelsea.  (Not heard that trumpeted on the news much.)  A lot of the people living in those areas are ‘well connected’.  Perhaps I’ll get my credit card ready to pick up a mansion in Chelsea any day soon.

It is obvious: buy yourself a house – just the one (and a shotgun)

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