Which is why I wondered why, in the days when we still have duty-free when travelling to/from Europe, some enterprising company did not set up a duty free petrol station. Even if they sold the fuel at 1/4 the 'street' price, without the element of duty, they would be making substantially more profit than selling at an 'inland' petrol station.
That's a bit harsh. As a champion of the free market you can surely see that when prices drop:-
the buyer will slowly and patiently explain to you the laws of supply and demand and that if you don't want to sell at the price he is offering you are welcome to go elsewhere.
In message , hummingbird writes
AFAIA, if we join the Euro, our base rate will be reduced to Euro levels of 2%, and what would happen to prices of everything if that happened?
I think you can be fairly certain that Joining the Euro is well and truly off the bottom of Mr. Blairs' agenda. I'm not sure it was ever a real possibility - more of a vote winner in some circles.
On Sat, 14 May 2005 01:55:38 +0100, Richard Faulkner mysteriously appeared thru the usenet mist to inform us thus...
That's always been the dilemma for the UK joining the euro... our interest rates have always needed to be higher than Europe to control inflation. As you say, if we join, our rates must come down to Euro levels which implies a rise in borrowing, rising inflation and various asset booms. That's what happened in Ireland after joining.
I've always believed that the EU must find a way of maintaining differential rates across member countries to reflect different economic conditions ...but that becomes extremely difficult without massive state control of borrowing/lending etc.
I still think Blair would like to join in his own mind and maybe he will feel exposed if sterling takes a fall at some time, which might push him to join to get shelter under a big umbrella. Public opinion could change very quickly if sterling falls.
At which point you can point out, yep, you've just argued clearly that there is not demand for the property at the price he's asking and walk off.
You give a lecture on supply and demand pricing, and then call someone an unprincinpled wanker when they listen to the lecture and apply its conclusions - change the price when the supply or demand ratios change?
Jim.
Isn't free mobility of labour supposed to take care of that (differential regional pressures)?
In message , hummingbird writes
And they are now booming, (arent they?)
Not sure how that would work. Surely everyone would borrow their money in the country with the lowest rate. One of the reasons I havent investigated euro mortgages, is currency fluctuation, (I dont know anything about them, but presume they are at lower rates).
MMM! I would rather have the conversion of my pounds to euros based on a higher exchange rate, rather than a fallen on.
"Jim Ley" wrote
The absence of principle lies in the fact that 'gazundering' usually refers, IME, to people dropping their offer on the day of exchange, rather than bidding the price at which they are genuinely prepared to exchange contracts and sticking to it. This means that someone who is in a chain has the choice of seeing it fall apart or accepting a lower offer at the last minute. This is not astute negotiation by buyers, it is simply acting in bad faith.
A buyer cannot reasonably argue that the price has fallen since he made his original bid. He knew at the time that there would be an interval between making his bid and exchange of contracts; it's not a surprise. Therefore, he should be bidding what he's prepared to pay on the day of exchange, not what he's prepared to pay today with the unstated assumption that he's entitled to welsh on that price at any time.
Gazundering is just as obnoxious as gazumping; just because buyers do it, that doesn't make it OK.
wrote
Nothing, of coure, but interest rates have been reduced to the point where a doubling of the price means the mortgage debt costs the same to service. Hence house price inflation, which of course the financial genius Brown has left out of the BoE's inflation target. Because we all agree that inflation is A Good Thing if it's houses that are inflating. Right?
And this inflation has enabled people to withdraw inflationary 'profits' and piss them away on cars and kitchens, as is visible in the fact that personal debt has rocketed since 1997 and the savings rate has halved. This is where Britain's economic 'growth' under Brown has come from. Strip out the increase in personal debt and you find that the economy has actually
*shrunk* every year since 1997.Some feelgood factor.
< snipped good stuff >
And that's why it's *essential* that Brown replace Blair, so the culprit can't dodge the blame. The sky grows dark with the wings of chickens coming home to roost.
As early as 1998 I was assured by a callow youth who'd just qualified as an accountant that house prices never fall. He was genuinwely astounded to learn of what had been happening until just 3 years previously.
I guess if I were 24 today, 2002 would seem like an eternity ago to me, too.
Knowing there's a time delay and being completely willing to absorb all risks in change of price solely is a very different thing. Both parties will have expectations of how the value will change over that period, if the value changes more than they anticipate, why should they unreservedly absorb that cost?
If it's a particularly concern to the seller, or buyer that values may change out of line with their expectations, then they should take some insurance out against it - either by a tighter contract, or as an actual insurance.
You're assuming I see anything wrong with gazumping? They are both purely the result of the value of the asset changing more than was expected before completion.
Jim.
"John Redman" wrote in message news:d64t14$qh2$ snipped-for-privacy@newsg2.svr.pol.co.uk...
Do you really think that it is Brown's fault? Is it Brown's fault that house prices have risen in the rest of the western world in a similar way? I would argue that his economic record is built around this debt and reduction of savings which is always he then always compares to Europe. Would it have been good for Britain to have interest rates at 10% when the rest of the world had rates of less than 2% just to curb house price inflation?
On Sat, 14 May 2005 11:32:25 +0100, Chris Game mysteriously appeared thru the usenet mist to inform us thus...
Is it? Free mobility of labour within the EU is exaggerated AFAICS due to language barriers. But anyway, I can't see it having much effect on what the theoretical correct level of interest rates should be in each country or within different regions of the same country come to that.
Currently, whatever rate is set by the ECB goes for all euro members and yet it's obvious to any onlooker that eg Greece should have lower rates to attract inward investment. They should also have their own currency for the same reason.....whoops.
On Sat, 14 May 2005 11:49:41 +0100, Richard Faulkner mysteriously appeared thru the usenet mist to inform us thus...
Last I heard they were suffering ~6.5% inflation and a housing boom caused by low EU I/Rs but no govt tools available to fix it.
That's exactly the problem, hence my comment about the need for massive govt control *if* such a system was introduced. Since even more govt regulation is not desirable, the obvious solution is for separate currencies, so each nation sets its own rates. The current single currency arrangement will do nothing whatsoever to build up the economies of poorer members except by huge cash transfers, which then leads to those in the richer states complaining about it.
BTW - I've always believed the same problem exists within the USA. They have a single federal dollar but it's done nothing to raise the living standards of the poor southern states. US wealth creation is very focused in a small number of regions while the poor get poorer.
AFAIK Euro mortgage rates are lower than British but fluctuation is a major factor to consider and not something to be taken lightly IMV. It amounts to a gamble where you can win or lose bigtime.
Indeed and if there is any hint of Britain joining - buy euros fast! Or do as I did 5 years ago; open up a euro currency account when the exchange rates were OK.
You could say the same about Cumbria compared to Surrey. The result of the different growth in the regions is that people move to where the growth is, until the growth is choked off.
No you can't, there's lots of professions you are simply not able to carry out in all other EU countries without gaining qualifications in that country (doctor, teacher etc.), the majority of euro countries don't accept all workers EU even in professions such as farm labourer, or waiter.
So even if you ignore the very real legal and cultural problems that prevent people realistically moving between EU countries, the market is hugely less free as between cumbria and surrey.
Jim.
Very similar in fact to the Lawson 'economic miracle'. I am sure you are right that this one will end in tears just as that one did too.
"Tumbleweed" wrote
Indeed. I'm not an OPEC fan, but I have some sympathy with their view on price - that it is a bit rich for western economies to whine about Arabs charging $50 a barrel for oil, and then impose $500 a barrel in tax.
"Graham Murray" wrote
Oil is only duty free in a bonded warehouse. Take it out and you cross a customs line, which attracts duty. The petrol station would have had to be located outside sovereign territory, which technically for customs purposes an airport duty-free shop is.
"Jane Tweedynn" wrote
He can't have it both ways. Either the good news is to his credit and the bad news is his fault, or he had nothing to do with either, in which case he's just another failed Labour Chancellor.
But to the specific question, yes, it is his fault; we have seen before what damage a speculative property bubble can do to the economy and he did nothing to stop this one - in fact, he has relied on it. So when it all ends in tears, it's his fault IMO.
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