Am 2-10y Eurinf Discussion Threads

[the_doctor] 08/5/2012 08:42

The moves to anti-austerity govts in France and Greece suggests to me that the way in the EU will either be:

- hyperinflation as they resort to printing - this will crash the bond markets
- ignore the debts and go bust - which will also crash the bond markets

My concern has always been that in an inflationary environment, house prices will inflate too?

Again, I guess it depends how much the inflation hits consumers' pockets, mortgage rates and banks' willingness to lend

[the_doctor] 02/5/2012 16:48

A look at UK house prices....

Post your views on how inflation, interest rates and other economic factors will shape house price trends

One aspect that's unclear to me is inflation
High inflation is good for debt holders, right?
High inflation, taken on its own, would potentially cause house prices to 'feel' lower, thereby aiding house price growth

HOWEVER
If the inflation isn't mirrored by comparable rises in wages, then the inflation will typically squeeze incomes, impacting the amount that people can spend on houses
While some groups of the population will have pay rises, others may not - or would see sub-inflationary rises.
That said, perhaps ANY rise in salaries that exceeds the effect of inflation on other spending, would still potentially aid house price rises.

As such, would higher inflation in these times push house prices up, or down?



Similarly, in a higher inflationary environment, interest rates would tend to rise
But if govts keep interest rates down, what then?
I'm assuming that mortgage lending rates would probably still rise
ie. house buyers would still be pressured

Please post your insight......

[hectorp] 28/10/2008 18:11

Oh Inflation round the world is alive and well. Iceland just raised rates to 18%.
I wonder if the Icelanders will also have to listen to Slade and impose a 3 day week?
Deja-vu guys, Iceland today, Hungary tomorrow, Britain next Friday.

[hectorp] 14/8/2007 11:29

Inflation in the UK has been reported strongly DOWN from 2.4% on the year to 1.8% net of mortgages.
Good for FTSE?

[energyi] 15/7/2007 22:09

Gold shares (HUI)-to- Gold Ratio:

I think this chart gives some good indications of breakouts and turning points:


INTERPRETATION:
...it certainly looks like Gold shares are set for an important breakout.
(Look at the SLO stochastics at the bottom, it hit 80, where we have seen breaks previously.
Out of three prior times, it failed only once- 1 year ago, and this try looks better than that one. )
And Gold Stock/HUI normally lead Gold, dragging it higher.

Looks like the Slingshot action is happening early, during the summer this time!
(as I suggested on several CW Radio podcasts)

= = =
MORE comments like this/
here:

[cashflo] 19/10/2005 18:44

The CPI - the govenments target measure of inflation rose to 2.5%
I'm not a political expert, in fact I find it all very boring. But just lately I've been hearing the "I" word mentioned more and more - I know that for many years we've had a very benign economic environment in the UK but in the last few I believe true inflation has been ferociously higher than official reports.

Are these people having a laugh when they say inflation is at 2% and why is fuel not included in the CPI. I feel this measuer is grossly inaccurate of the true state of the economy.

The main ones are oil and energy and of course house prices (yes thats inflation aswell) but also dental bills have risen and the cost of labour has also risen - there's very little that hasn't risen - how is it disguised to blatantly?

[royce] 28/7/2002 17:21

good luck with the boats, do you want to buy a T shirt, well power boats t shirt and not in the uk far too cold .still inflation would be good if we are all short more interest!and deflation good if we are all long less interest.but looking at your stake your doing very well young man.

[rdj20] 28/7/2002 17:01

thanks royce, best regards to you too. The last few months have been very profitable after a barren spell in the first quarter. My problem has always been that because I started trading without a large initial stake, I often find myself treading water. I started with £10k and had to make at least £2k per month to cover my living costs in London. I have exceeded this on average and my stake has grown substantially from that initial figure. I trade because I want to buy a yacht to sail with when I am still young.

It sounds like you are pretty comfortable, I think in your situation I would be following the same strategy albeit sailing a great deal ;-)

The inflation thread is a bit of tongue and cheek. It is as if people have forgotten what it is and its effects, I thought it would be an interesting discussion. I think the risks are weighted towards deflation in the short-term anyway, its effects being more severe but no less profitable if traded correctly.

[royce] 28/7/2002 16:27

sorry d/post

[royce] 28/7/2002 16:26

rdj20 lol trading up on property if you only knew.no 200 acres of somerset is all i can deal with.as for giving me more for my trading pot no thanks i like to have a sleep at night.as you said i am may be not a serious trader i only want something to do thats make me money without the stress.but i feel that inflation will lead as to recession.

still reading your posts not just on this thread but d/traders makes me feel 25 again i wish i had your risk reward.trouble is wife and 4 kids at private school/uni is not a good risk reward.but all the best of luck to you.

[rdj20] 28/7/2002 16:00

royce, spot on regarding the age, give that man a cigar ;-)

Regarding your risk, there are still a number of ways that you could leverage yourself and remain relatively low risk eg. trading up on your property.

It was just an interesting point regarding inflation. Of course, deflation may be more the order of the day in which case traders should still do well by going short!!!!

[royce] 28/7/2002 15:33

rdj20 i think my tent is in Lemain camp. we are not net lenders most of as do have investments,but interest rates going up would help as i am sure.as most cash is in the bank at the moment.

ps reading your last post well i do not risk more than i am worth on trading i have a trading account if used to the full would start with a 2 too use this to the full would mean a high risk /reward ratio which at my age [47] i think is to great if i were young 25? then sure everyting in the pot house etc.,

[rdj20] 28/7/2002 15:29

Lemain, this thread is aimed at TRADERS not investors. Almost all the traders I know trade on margin. Their trading is therefore highly leveraged. Even traders with large amounts of capital still trade on margin leveraging up returns. I don't know a serious trader that doesn't have debt far outstanding his/her equity when actively trading the markets. Why? Because if you can trade profitably then you better make the most of your finances and that means leverage. Don't get me wrong, I'm not suggesting that they don't have a lot of cash it is just that they use that to open much larger positions leaving them in debt on numerous short-term positions.

[lemain] 28/7/2002 15:22

rdj20 - Where did you get the idea "...but that arguement forgets that us traders are net borrowers not lenders" from? Perhaps my finger isn't on the pulse of the membership here, but my perception is that a very large proportion of the people here are net lenders (even if some do have mortgages for one reason or another). Very often I see threads here that seem to ignore the investment needs of those not in debt. A classic case is the the BTL thread which conveniently overlooks the fact that those with (net) capital have to do something with it, even it that means keeping a bag of sovereigns under the floorboards!

[sjcsystems] 28/7/2002 15:01

There is actually a simpler way, although I don't promote this myself - just keep voting Mr Browns party and President elect Blair into power and the economy will fall apart on it's own...

(I can just see the replies coming, so I'll duck now, lol).

Simon

[sjcsystems] 28/7/2002 15:01

There is actually a simpler way, although I don't promote this myself - just keep voting Mr Browns party and President elect Blair into power and the economy will fall apart on it's own...

(I can just see the replies coming, so I'll duck now, lol).

Simon