Loan Penetration by Banks destroys home ownership rates worldwide.

[Snowball]

THIS IS HOW BANKERS MURDER A HEALTHY SOCIETY.

Countries that they have not yet exploited with their predatory banking enjoy much higher home ownership rates.
How can people afford the homes they live in so much when they are financially poor? Because the homes and land were not financialized. Long-term financialization has taken America from a country where 6 months of work could buy a nice home in cash to a country where it takes decades to finish buying a home for most people.

Housing Loan Penetration by Country
Descending Order:
50%+ Swe, Den
40-50%: Lux, NZ, Australia, Neth
30-40%: Ire, Belg, US, Spa, UK, Can, Fin
20-30%: Fra, Cyp, Au, Por, SK, Ger, Kuw, UER, Sing, Mal, Qat
10-20%: Est, Oman, Jap, Isr, Iraq, Mala, SA, Iran, Hun, HK, Ita, Pan, Slovenia
5-10%: Belarus, Afg, Lat, Cze, Slovak, Gre, Pal, Alg, Soma, Lith, Nep, Swaz, Malaw, Sud, Dji, Chad, Moro, Maur, Leb, Syr, Mauritius
*African countries are recent additions as banks penetrate
under 5% (many under 2%): all other countries
openknowledge.worldbank.org/handle/10986/16821

Home Ownership by Country
en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

Many top countries by home ownership rate very low for mortgages.
What does this mean ? A lot of things. Rising home values = inflation occurs
when houses are owned by banks, not by people. This is seen in a graphic in
the first link (the first chart) which shows Mortgage Depth and Loan Origination
run hand-in-hand. Where the banks own houses, the banks drive prices upward.
Where the banks do not own houses, and do not loan, people own houses and
prices are naturally static or depend on other non-financialized factors.

There was a time in the US when a non-skilled laborer could work a few months
and buy land and build a house just like that. No loan. As banks penetrated the
housing market post-WW2, prices continually rose, with rapidly progressing levels,
and wages in real terms stagnated. Home ownership dropped precipitously, in direct
proportion to the proliferation of loans being necessary to buy property, a condition
only made possible by penetration of the housing market by banks.

Lesson: Bank mortgages drive homelessness. Bank mortgages drive inflation.
In real terms, people are not better off, just the numbers are bigger from inflation.
Many Americans did not keep their money in banks, again, until post-WW2. This is
partially due to distrust of banks, but it is moreso because they did not need to borrow.

[Matt4Liberty]

THIS IS HOW BANKERS MURDER A HEALTHY SOCIETY.

Countries that they have not yet exploited with their predatory banking enjoy much higher home ownership rates.
How can people afford the homes they live in so much when they are financially poor? Because the homes and land were not financialized. Long-term financialization has taken America from a country where 6 months of work could buy a nice home in cash to a country where it takes decades to finish buying a home for most people.

Housing Loan Penetration by Country
Descending Order:
50%+ Swe, Den
40-50%: Lux, NZ, Australia, Neth
30-40%: Ire, Belg, US, Spa, UK, Can, Fin
20-30%: Fra, Cyp, Au, Por, SK, Ger, Kuw, UER, Sing, Mal, Qat
10-20%: Est, Oman, Jap, Isr, Iraq, Mala, SA, Iran, Hun, HK, Ita, Pan, Slovenia
5-10%: Belarus, Afg, Lat, Cze, Slovak, Gre, Pal, Alg, Soma, Lith, Nep, Swaz, Malaw, Sud, Dji, Chad, Moro, Maur, Leb, Syr, Mauritius
*African countries are recent additions as banks penetrate
under 5% (many under 2%): all other countries
openknowledge.worldbank.org/handle/10986/16821

Home Ownership by Country
en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate

Many top countries by home ownership rate very low for mortgages.
What does this mean ? A lot of things. Rising home values = inflation occurs
when houses are owned by banks, not by people. This is seen in a graphic in
the first link (the first chart) which shows Mortgage Depth and Loan Origination
run hand-in-hand. Where the banks own houses, the banks drive prices upward.
Where the banks do not own houses, and do not loan, people own houses and
prices are naturally static or depend on other non-financialized factors.

There was a time in the US when a non-skilled laborer could work a few months
and buy land and build a house just like that. No loan. As banks penetrated the
housing market post-WW2, prices continually rose, with rapidly progressing levels,
and wages in real terms stagnated. Home ownership dropped precipitously, in direct
proportion to the proliferation of loans being necessary to buy property, a condition
only made possible by penetration of the housing market by banks.

Lesson: Bank mortgages drive homelessness. Bank mortgages drive inflation.
In real terms, people are not better off, just the numbers are bigger from inflation.
Many Americans did not keep their money in banks, again, until post-WW2. This is
partially due to distrust of banks, but it is moreso because they did not need to borrow.

Banking and even mortgages would work fine without interference from a central bank. If banks had to pay interest to savers to have funds to lend out, and would have to charge real rates for loans, things would be different. People always ask me if I want mortgage rates at 12% and I always say yes. Prices wouldn't be artificially high and you would have real savings rates. I remember CDs over 10% as a kid.

[Snowball]

Banking and even mortgages would work fine without interference from a central bank. If banks had to pay interest to savers to have funds to lend out, and would have to charge real rates for loans, things would be different. People always ask me if I want mortgage rates at 12% and I always say yes. Prices wouldn't be artificially high and you would have real savings rates. I remember CDs over 10% as a kid.

I agree. Although I do think there has to be a legislative limit on banking operations and their scope. This country had such a legislative limit
but unfortunately it is a most fatal error of the founders to place the public trust into hands of so-called representatives.

[Krugminator2]

Banking and even mortgages would work fine without interference from a central bank. If banks had to pay interest to savers to have funds to lend out, and would have to charge real rates for loans, things would be different. People always ask me if I want mortgage rates at 12% and I always say yes. Prices wouldn't be artificially high and you would have real savings rates. I remember CDs over 10% as a kid.

Central banks don't directly determine interest rates by price fixing. Central banks control inflation. And the rate of inflation determines interest rates.

12% mortgage rates implies double digit inflation. So you basically are demanding super easy money from the Fed. And if you are having trouble comprehending this you should move to Argentina. You can get 40% CDs there. You would really be in heaven.

[Matt4Liberty]

Central banks don't directly determine interest rates by price fixing. Central banks control inflation. And the rate of inflation determines interest rates.

12% mortgage rates implies double digit inflation. So you basically are demanding super easy money from the Fed. And if you are having trouble comprehending this you should move to Argentina. You can get 40% CDs there. You would really be in heaven.

You have drank too much MMT kool aid. The central bank most certainly does control interest rates. 12% mortgage rates resulting from 10% CD rates are different than 12% mortgage rates caused by the central bank printing money. You are only taking the latter scenario into consideration. If the central bank didn't provide any loans to the banks, those banks would have to barrow that money from you, the saver. This isn't some bizarre concept like people with short memories like to believe. It was reality a few decades ago. I'm not that old. This is how it has worked for a long time, before MMT. Now the central bank just prints all the banks want, and running your savings account is actually a hassle for most banks. They just lend the FED's money. Much easier.

[Krugminator2]

You have drank too much MMT kool aid.

Your view is the MMT view on interest rates. https://en.wikipedia.org/wiki/Modern...te_maintenance

The high interest rates of the of the late 70s were caused by a dramatic increase in the money supply.

High interest rates= easy money

Low interest rates = tight money

Also helpful reading. https://www.econlib.org/library/Colu...restrates.html

[Brian4Liberty]

Fixed income essentially doesn't exist in the US anymore. There is no competitive market in debt instruments. Try to find a CD or bond that pays a reasonable rate. You won’t.

[Matt4Liberty]

Your view is the MMT view on interest rates. https://en.wikipedia.org/wiki/Modern...te_maintenance

The high interest rates of the of the late 70s were caused by a dramatic increase in the money supply.

High interest rates= easy money

Low interest rates = tight money

Also helpful reading. https://www.econlib.org/library/Colu...restrates.html

So money is "tight" right now? That's news to me. The only time it was easier to get a loan was 2007. High interest rates in the 80s were caused by Paul Volker understanding that MMT would cause the whole fiat house of cards to collapse. I personally would prefer no interference from the central bank, but at least that made some levels of sense. Today we have exponentially expanding money supply and artificially low rates.

[Krugminator2]

So money is "tight" right now? That's news to me. The only time it was easier to get a loan was 2007. High interest rates in the 80s were caused by Paul Volker understanding that MMT would cause the whole fiat house of cards to collapse. I personally would prefer no interference from the central bank, but at least that made some levels of sense. Today we have exponentially expanding money supply and artificially low rates.

Money is loose now. M2 grew at 28% over the last year. Inflation and higher interest should follow as more people leave their house.

Money was extremely tight coming out of 2008 and stayed fairly tight throughout the last 10 years. M2 grew slowly. Rates were not artificially low. If you are going to talk about interest rates like they are a price, rates were artificially high and the zero lower bound acted as a price floor like minimum wages act as a price floor and prevent markets from clearing. https://macromarketmusings.blogspot....marketers.html

High interest rates in the 80s were caused by Paul Volker understanding that MMT would cause the whole fiat house of cards to collapse.

That is factually wrong.

As far as Paul Volcker, the most commonly known thing about his monetary policy is that he abandoned the Keynesian/MMT idea of focusing on interest rates and focused entirely on the money supply growth. Literally written in his obituary.

"To underscore the Fed’s determination, Mr. Volcker announced a significant change in the conduct of monetary policy. Historically, the Fed had aimed to control interest rates — the price of money. Under the new policy, he said that the Fed would instead aim to control the supply of money. Limiting the money supply would cause interest rates to rise, but the Fed would no longer aim for a specific increase. The central bank would determine how much money was available; markets would set the price."

[Matt4Liberty]

Money is loose now. M2 grew at 28% over the last year. Inflation and higher interest should follow as more people leave their house.

Money was extremely tight coming out of 2008 and stayed fairly tight throughout the last 10 years. M2 grew slowly. Rates were not artificially low. If you are going to talk about interest rates like they are a price, rates were artificially high and the zero lower bound acted as a price floor like minimum wages act as a price floor and prevent markets from clearing. https://macromarketmusings.blogspot....marketers.html




That is factually wrong.

As far as Paul Volcker, the most commonly known thing about his monetary policy is that he abandoned the Keynesian/MMT idea of focusing on interest rates and focused entirely on the money supply growth. Literally written in his obituary.

"To underscore the Fed’s determination, Mr. Volcker announced a significant change in the conduct of monetary policy. Historically, the Fed had aimed to control interest rates — the price of money. Under the new policy, he said that the Fed would instead aim to control the supply of money. Limiting the money supply would cause interest rates to rise, but the Fed would no longer aim for a specific increase. The central bank would determine how much money was available; markets would set the price."

So I'm factually wrong when you literally provided an excerpt that backed up my point?

[Krugminator2]

So I'm factually wrong when you literally provided an excerpt that backed up my point?

Your quote

High interest rates in the 80s were caused by Paul Volker

Quote from Volcker's obituary

To underscore the Fed’s determination, Mr. Volcker announced a significant change in the conduct of monetary policy. Historically, the Fed had aimed to control interest rates — the price of money. Under the new policy, he said that the Fed would instead aim to control the supply of money.

Volcker didn't cause high interest rates. Inflation caused high interest rates. And interest rates fell ultimately because money became tight enough to slow inflation. A 12% CD isn't inherently helping savers. Venezuela has a short term interest rate of 59% right now. The inflation rate is 500%. High interest rates have no direct connection to whether money is loose or tight. That said, it is usually correct to say high interest rates mean policy is extremely inflationary.

[merkelstan]

There's also local governments charging you 'property tax' for services you might not be using.

Let people build whatever home they want, and only pay a user fee for schools, roads, water, sewage.

[Matt4Liberty]

There's also local governments charging you 'property tax' for services you might not be using.

Let people build whatever home they want, and only pay a user fee for schools, roads, water, sewage.

Your quote



Quote from Volcker's obituary




Volcker didn't cause high interest rates. Inflation caused high interest rates. And interest rates fell ultimately because money became tight enough to slow inflation. A 12% CD isn't inherently helping savers. Venezuela has a short term interest rate of 59% right now. The inflation rate is 500%. High interest rates have no direct connection to whether money is loose or tight. That said, it is usually correct to say high interest rates mean policy is extremely inflationary.

Volker tightened up lending from the FED. High interest rates were caused by banks barrowing from savers instead of the FED. This was the result of Volker's policies. What you're claiming would be the same thing as claiming it's the gun that killed a person instead of the shooter. (Actually that explains a bunch of your opinions)

Interest rates need to be market set period. The Venezuela example only further proves the point because they have unlimited money printing. 60% is probably in affect a negative interest rate with their inflation. At least we have something to look forward to.

[Krugminator2]

Volker tightened up lending from the FED. High interest rates were caused by banks barrowing from savers instead of the FED. This was the result of Volker's policies. What you're claiming would be the same thing as claiming it's the gun that killed a person instead of the shooter. (Actually that explains a bunch of your opinions)

"Instead of relying on Keynesian policies such as interest rate targeting, Volcker had the Fed directly reduce the growth rate of the money supply, and let interest rates go as high as market forces dictated."

https://thehill.com/opinion/finance/...amed-inflation

Interest rates need to be market set period.

Exactly. Which is what I advocate. Markets setting interest rates not central planners. You support a Soviet style system where central planners target interest rates.

People always ask me if I want mortgage rates at 12% and I always say yes. Prices wouldn't be artificially high and you would have real savings rates. I remember CDs over 10% as a kid.

[oyarde]

There's also local governments charging you 'property tax' for services you might not be using.

Let people build whatever home they want, and only pay a user fee for schools, roads, water, sewage.

I totally oppose property tax . Not going anywhere where I live though ( 1 percent on primary residence) it is how they fund that school system you mentioned .

[Matt4Liberty]

"Instead of relying on Keynesian policies such as interest rate targeting, Volcker had the Fed directly reduce the growth rate of the money supply, and let interest rates go as high as market forces dictated."

https://thehill.com/opinion/finance/...amed-inflation





Exactly. Which is what I advocate. Markets setting interest rates not central planners. You support a Soviet style system where central planners target interest rates.

Your reading comprehension is very bad if you think I support central planners setting interest rates. The only thing I support is elimination of the central bank and a stable currency backed by precious metals. One that is redeemable in it's specified weight on demand.

That being said, the central bank isn't going away anytime soon, and I would at least prefer Volker's reserved management style compared to the current and recent FED chairmen that just go "Money printer go better"

[Matt4Liberty]

I totally oppose property tax . Not going anywhere where I live though ( 1 percent on primary residence) it is how the fund that school system you mentioned .

I was looking to see if there's any place that doesn't have property tax. Couldn't find one. There are a few countries however where it's a flat fee at the time of purchase. I would prefer that over constantly paying tax on the same property. At least you can pay off the government and then really own the place.

[Krugminator2]

Your reading comprehension is very bad if you think I support central planners setting interest rates.

People always ask me if I want mortgage rates at 12% and I always say yes.

You, interest rate central planner, pulled the number 12% out of thin air for some reason. It seems like your statement is pretty clear. 12% because..... Well.... Who knows... You want 12% because there is something magical about it and something about Paul Volcker.

I. free marketer, do not care what the rate of interest is. Ever. Because interest rates are not monetary policy. Interest rates are a market response to monetary policy.

[Matt4Liberty]

You, interest rate central planner, pulled the number 12% out of thin air for some reason. It seems like your statement is pretty clear. 12% because..... Well.... Who knows... You want 12% because there is something magical about it and something about Paul Volcker.

I. free marketer, do not care what the rate of interest is. Ever. Because interest rates are not monetary policy. Interest rates are a market response to monetary policy.

Again, reading comprehension isn't your strong suit. I said that when people ask me if I want 12% interest rates on mortgages that would result from market rates, I say yes. That doesn't mean that I want interest rates set at 12% by central planners. I could be speaking Sri Lanken though, because this concept won't compute anyway.

[Krugminator2]

I said that when people ask me if I want 12% interest rates on mortgages that would result from market rates, I say yes. That doesn't mean that I want interest rates set at 12% by central planners.

Sorry I misunderstood. So you want the Federal Reserve to pursue an extremely loose policy to get inflation to double digits so you can have double digit mortgage rates.

Makes a lot of sense. Smart take.

[Matt4Liberty]

Sorry I misunderstood. So you want the Federal Reserve to pursue an extremely loose policy to get inflation to double digits so you can have double digit mortgage rates.

Makes a lot of sense. Smart take.

ඔබට පැහැදිලිවම ඉංග්*රීසි තේරුම් ගත නොහැකි බැවින් අපි සිංහල උත්සාහ කරමු. මට අවශ්*ය වන්නේ ෆෙඩරල් මහ බැංකුව කිසිවක් නොකර එයින් stay ත් වී සිටීමයි.

[howdynichol34]

Homeownership is the American Dream. It is the chance for all Americans to put down roots and begin making value for themselves and their families. Homeownership has been the way to building abundance for ages of Americans. Furthermore, it has been the way to guaranteeing stable networks, great schools, and safe roads.

Banks loaded up on subprime contracts. When resource costs fell, the banks needed to record the worth of their subprime protections. Presently, banks expected to loan less to ensure their liabilities weren't more prominent than their resources.

The country's biggest credit association by resources, Navy FCU, saw vehicle advance entrance decrease 0.3 rate highlight 11.3% as of Dec. 31, 2018. The organization expanded its charge card credit infiltration by 0.7 rate highlight 32.1%.

[Lindsey]

I was looking to see if there's any place that doesn't have property tax. Couldn't find one. There are a few countries however where it's a flat fee at the time of purchase. I would prefer that over constantly paying tax on the same property. At least you can pay off the government and then really own the place.

I'm curious where the flat fee places are.

[Snowball]

Inflation of Assets is the true driver of wealth disparity, because wealth today is simply an affect of asset accumulation then inflation.
When the working man has to borrow to buy, the working man works for the bank.
Our system is a system of indentured servitude and the total debasement of morality in economics, it is the philosophical split
that ripped ethics out of economics since Adam Smith was paid to write the Wealth of Nations by the bankers.

SCAM from DAY ONE.

[Krugminator2]

I it is the philosophical split
that ripped ethics out of economics since Adam Smith was paid to write the Wealth of Nations by the bankers.

SCAM from DAY ONE.

Adam Smith emphasized morals and ethics more than just about any economist ever.

https://en.wikipedia.org/wiki/The_Th...ral_Sentiments

[Matt4Liberty]

I'm curious where the flat fee places are.

There are a decent amount. Fiji, Seychelles, Cayman islands, Thailand, Georgia, Dominica. If you're in a position where this is important to you, spend some time researching. I found this info by searching for no property tax.

[Madison320]

Central banks don't directly determine interest rates by price fixing. Central banks control inflation. And the rate of inflation determines interest rates.

12% mortgage rates implies double digit inflation. So you basically are demanding super easy money from the Fed. And if you are having trouble comprehending this you should move to Argentina. You can get 40% CDs there. You would really be in heaven.

You'd be right if the Fed wasn't buying treasuries and mortgages. But they are and so of course they are fixing prices on interest rates.

Do you really think in a free market private individuals would be loaning the US govt money for 10 years at 1.5%? It's not even remotely possible.

[Krugminator2]

You'd be right if the Fed wasn't buying treasuries and mortgages. But they are and so of course they are fixing prices on interest rates.

Buying Treasuries does create demand and demand for a bond means a lower yield. So it is technically incorrect to say the Fed has no effect on interest rates but it is a very good approximation of reality. The effect is not as simple as more buying equals lower yield. More buying could = higher yields in some scenarios. If more buying is inflationary and raises nominal GDP then yields would rise.

Nominal GDP growth is the most important part of interest rates. It is productivity growth + population growth +inflation. So when meathead above says interest rates should be 12% in a free market it makes no sense. Nominal GDP growth has been 4% with a super active pumping money in. Why would interest rates ever be 8% higher than nominal GDP growth?

Do you really think in a free market private individuals would be loaning the US govt money for 10 years at 1.5%? It's not even remotely possible.

Maybe. It is entirely possible rates would be lower. We faced a Great Depression scenario last year. Had the government done nothing nominal GDP would have collapsed like the Great Depression. Interest rates went to zero in the Great Depression when the Fed let the money supply collapse.

Interest rates are always going to be very low in a low nominal GDP environment. 1.5% *seems* low to me. But it isn't wildly off. Historically based on nominal GDP maybe 3-4% is about right.

[Snowball]

Adam Smith emphasized morals and ethics more than just about any economist ever.

https://en.wikipedia.org/wiki/The_Th...ral_Sentiments

he was a snake oil salesman.

[Warrior_of_Freedom]

property tax almost $900 a month here, renting my own house