Fixed-rate Loans

If people did not have offset mortgages, chances are that their bank credits would be about the same. It's not the same phenomenon as borrowing in order to have a bank credit.

No it isn't. I am looking at the basis of behaviour. The difference in interest rates motivates people to avoid simultaneous borrowing and depositing insofar as they are able.

You got that right.

And also that.

So now you want me to visualise 10,000,000 people causing such spikes at the same time? The very point in time as the money supply is measured? As I suggested, you are pushing it.

Why are you persisting in taking a macroeconomic variable with a strict agreed definition and that has been found to be useful in the context of economic policy-making, and trying to relate it to an individual's situation where the consensus is that it is irrelevant?

Yes. It is more readily measurable, and is just as useful.

Can you give me a reason why we should use Fahrenheit rather than Celsius?

"Padraig Breathnach" wrote

"If"?! Hehe - that's your problem. You are ignoring a large chunk of the economy, because offsets are quite common now!

"Padraig Breathnach" wrote

I'm not. I'm relating it to hundreds of thousands of individuals, all of whom are in similar positions, all of whom go into making up the macroeconomic variable, and who *together* have a not-insignificant effect on that macroeconomic variable.

Perhaps it's time the definition was changed? ;-)

Ten million people making bad financial choices in concert.

And as I said, and you have chosen not to recognise, they do not generate significant additional credits in the system.

I'm finished discussing things with you. I think that your method of argument has become dishonest.

"Padraig Breathnach" wrote

Are you suggesting that the banks don't actually know what credit facilities they have approved? Surely not!

"Padraig Breathnach" wrote

Yes - in most earth-bound conditions, it is positive.

Celsius, aka Centigrade, is often negative - as has been recently! :-( Much better to have a lower-bound around zero...

But what has that got to do with the money supply?

"Padraig Breathnach" wrote

I've never suggested that anyone, let alone ten million people, should make any bad financial choices - and certainly not in concert.

"Padraig Breathnach" wrote

Are you kidding? If the average "mortgage level" is around 100,000, and people keep around 20% of that in an offset savings a/c, and if there are only half-a-million of these, then that's 20% x 100,000 x 500,000 = 10 billion extra credits. Is that not significant wnough for you?

"Padraig Breathnach" wrote

I take it you can't answer any of my questions then.

"Padraig Breathnach" wrote

Dishonest?! Where?

It was that or say that you are stupid. Take your pick.

Goodbye.

In message , Tim writes

I see what you mean but you could then say that the real impact wasnt until the factory purchaser's bank then lends the £0.9m it can then do. Whether it is a loan or an overdraft really doesnt make much difference because nit is the act of actually borrowing that matters. A request for a loan

Yes, so long as it is a loan. Which is why undrawn loans are measured to enable future money supply to be predicted. Also this data is sub-analysed by repayment period.

In message , Tim writes

Yes, using 4 shows the customer actually used his credit. That is what Money Supply measures, the dosh that is being actually used, nit what could be used. Remember the food on the shelves? If you havent eaten it you dont weigh more and are still healthy.

In message , Tim writes

Yes it does. 'Elsewhere' measures what could be in use.

As already mentioned, tiddly transactions dont count.

As that doesnt happen it is of no consequence.

In message , Tim writes

But they are no more relevant than any other loan or overdraft. An increase in borrowing is reflected by an increased bank balance somewhere or other. A decrease in borrowing will be reflected by a decrease somewhere in the system. If you measured the debit offset balances AND the savings balances then you would be double counting.

No. You supposed crowning argument actually proves the point against you. It isnt really the absolute value of Money Supply that is the indicator (although in certain circs it can be) in general it is the change that is the indicator of health. IF 100k's of people did what you suggest, this would indicate a major change in consumer behaviour and confidence and the reason would need to be determined. Money supply, together with loads of other economic & statistical measures would be considered by the MPC, who may then decide it is just Tim's mates making a point on usenet and ignore it or deduce that a splurge of confidence is sweeping the country which is going to increase consumer demand which will, etc., etc., and that interest rates should increase (say).

In message , Tim writes

No, neither am I. I am puzzled as to why you think the existence of such facilities is so important. Surely a better measure (for your purpose) would be the ability of people to obtain credit facilities. This would be far better for your purpose than those already granted.

I say again, Money Supply indicates how much money is being used, not potentially used.

not in comparison with the UK money supply it isnt.

No, reread above and my other posts. How healthy are you? When you stand on the scales are you naked, or with clothes or are you also holding all the food in the larder, fridge, freezer and beer fridge?

In message , Tim writes

I can see, but my glasses are clear and transparent. You must be wearing polarised prescription varifocals that belong to somebody else and they are upside down. You havent nicked them form Ronald have you?

IF all 10m did that, then that would certainly be an economic indicator worth noting, and the Money Supply measure would pick it up. That is why it is there.

In message , Tim writes

Your figures are completely and utterly wrong. You are making a basic mistake. Your use of an 'offset' mortgage as an example is incorrect. IN fact you should be referring to EVERY mortgagor who has some savings, no matter how small. The figures you quote above would then by very much larger indeed, both in number of borrowers, savers, and on monetary amount. in general they all act randomly and the money supply hardly alters. But if the start to act in unison, as you suggest they may do, and which sometimes they do, then the Money Supply measure will pick this up as this is a major economic indicator. The MPC aint bothered whether you are healthy or not, but he would rather avoid an epidemic if possible.

I resemble that remark.

I do not have varifocals to nick, and I never will have.

Beer fridge? Only gnats' piss requires refrigerating (to numb the taste buds); proper beer is best enjoyed at room temperature.

Are they padlocked to your ears then?

Hmm,but in Scotland you dont need fridges 'cos room temperature is bloomin freezing anyway. In any event my beer fridge isnt plugged in.

(I think Tim might be a cold beer man, I'm sure we will find out shortly)

Not in this house it isn't, with the central heating on 24/7. You might say my beer is kept in an incubator.

The mere fact that you have one is bad enough. It means it has the potential to be plugged in and will therefore feature in the B3 measure of beer supply.