Boomer Wealth

Wanderer78

Former Former wrote: »

It wouldn't. It would make "money supply" an electoral promise. You'd have parties outdoing each other to give as many loans as possible, as cheaply as possible and you'd fuel housing rises even more.

it general is anyway, we usually get it from the private sector, via bonds, we could bypass this process, and simply create some ourselves, again, this works very well in other countries, with strict protective measures in place, zee germans have already been here, explaining how this works in their own country, seems to work very well

Former Former

Wanderer78 wrote: »

it general is anyway, we usually get it from the private sector, via bonds, we could bypass this process, and simply create some ourselves, again, this works very well in other countries, with strict protective measures in place, zee germans have already been here, explaining how this works in their own country, seems to work very well

I don't understand. How do we create money? We can't. It has to be borrowed from somewhere.

Or do you mean the state borrows it on the bond market and then lends it out? The state really shouldn't do that, and probably can't under EU rules.

Wanderer78

Former Former wrote: »

I don't understand. How do we create money? It has to be borrowed from somewhere.

Or do you mean the state borrows it on the bond market and then lends it out?

the same way as all banks do, virtually from thin air, its an accountancy activity, it doesnt have to be borrowed from somewhere, banks havent worked like that for centuries, the critical component being, a serious attempt must be made to pay loans back, even to ourselves, as the system has limited buffer capacity for defaults and none performing loans etc

Ush1

lainey_d_123 wrote: »

And that's through their own personal circumstances and/or bad decisions rather than the kind of structural issues millennials face.

So every other generations problems is their own fault but yours are structural?

Former Former

Wanderer78 wrote: »

the same way as all banks do, virtually from thin air, its an accountancy activity, it doesnt have to be borrowed from somewhere, banks havent worked like that for centuries, the critical component being, a serious attempt must be made to pay loans back, even to ourselves, as the system has limited buffer capacity for defaults and none performing loans etc

No, this doesn't make any sense. Completely and utterly wrong. Not even close to being true.

The only people who can "create" money are the central banks, and in our case that's the ECB, not the Irish Central Bank.

Wanderer78

Former Former wrote: »

No, this doesn't make any sense. Completely and utterly wrong.

The only people who can "create" money are the central banks, and in our case that's the ECB, not the Irish Central Bank.

true, it doesnt make any sense, didnt until i found out, its kinna a disturbing fact really, tis the truth, i can post the central bank papers i do have, theyve been posted on boards many times since there publication, not just by myself, theyd bore the bollcoks outta yea to be honest, ive found far better people to explain it

central banks do indeed create money, but private sector banks create the majority of the money supply, in the form of credit

lainey_d_123

Wanderer78 wrote: »

theres sh1te in every generation unfortunately, some people can be very unlucky, we re not all born with the same opportunities in life

That's literally what I said!

There was no real reason that that generation as a whole had poor prospects. Houses were affordable when they were young, and then hugely increased in value. There will always be outliers, but in general they had far more opportunity to increase their wealth than people do today.

Wanderer78

lainey_d_123 wrote:

There was no real reason that that generation as a whole had poor prospects. Houses were affordable when they were young, and then hugely increased in value. There will always be outliers, but in general they had far more opportunity to increase their wealth than people do today.

I'd agree with you there, but I think it's very disingenuous when people say, or imply, they had it easier, most people work hard for what they have, and continue to, comparing generations is almost pointless, they're effectively incomparable

lainey_d_123

Wanderer78 wrote: »

I'd agree with you there, but I think it's very disingenuous when people say, or imply, they had it easier, most people work hard for what they have, and continue to, comparing generations is almost pointless, they're effectively incomparable

I'm not sure that's really true when it comes to affordability of property, though. You could argue that one generation or another had a 'better' lifestyle, but the fact is that the vast majority of people who wanted to buy a home could do so by 30 (and in many cases long before 30), even those on average or below average incomes. And that home could realistically be where they'd grown up, even if that was Dublin.

Wanderer78

lainey_d_123 wrote:

I'm not sure that's really true when it comes to affordability of property, though. You could argue that one generation or another had a 'better' lifestyle, but the fact is that the vast majority of people who wanted to buy a home could do so by 30 (and in many cases long before 30), even those on average or below average incomes. And that home could realistically be where they'd grown up, even if that was Dublin.

Its important to remember, Ireland wasn't exactly an amazing country, prior to the 90's, most didn't have a pot to p1ss in, getting access to the housing market wasn't exactly easy, then of course there was the 70's/80's, so you were lucky to hold onto your house, if you managed to get one. Historically, we ve had larger public housing stock, but that's being gradually wittled away, now we have a failure in both public and private sectors, in order to try provide this critical need, it's a bloody mess, and nobody seems to know what to do next. It's one of the many reasons why I advocate for a public banking system, it might just help in these situations, but it would have limitations also. The title of the thread is very misleading, our economic history is very different to countries such as America

Dizzyblonde

lainey_d_123 wrote: »

I'm not sure that's really true when it comes to affordability of property, though. You could argue that one generation or another had a 'better' lifestyle, but the fact is that the vast majority of people who wanted to buy a home could do so by 30 (and in many cases long before 30), even those on average or below average incomes. And that home could realistically be where they'd grown up, even if that was Dublin.

Not quite. You're forgetting that there was a lot of social housing back then, and people who couldn't afford to buy a house even though they wanted to (and there were many) ended up living in council estates. I'm not saying there's anything wrong with council estates, before anyone jumps down my neck, but a lot of people who ended up in them would have preferred to buy a home.

We moved out into north county Dublin which was almost a wilderness in the early 80s with very little by way of public transport and infrastructure in order to buy our house.

Nobody denies that it's very difficult nowadays, but please stop looking back with rose tinted glasses.

Wanderer78

Dizzyblonde wrote:

We moved out into north county Dublin which was almost a wilderness in the early 80s with very little by way of public transport and infrastructure in order to buy our house.

Yup the 70's/80's were rough out, I grew up with many that were lucky to survive it, use to work with a chap that had to give back his Christmas presents one year

TRANQUILLO

lainey_d_123 wrote: »

Where did I say I wanted to live in Rathgar? I don't want to live in Dublin at all.

I'm simply refuting that poster's baseless statement that single professionals expect 3-bed houses in Dublin city. I'm saying that even a studio flat in Rathgar (which, again, is the kind of normal, nice suburb which a generation or two ago, people were buying houses in no bother) is out of reach of even quite a well paid professional, so that statement is utter bollix.

I was on a salary of 109k at one stage and couldn't get a mortgage as a single man for a reasonable house. My father bought a 4 bed while working in a factory in the 80's. I have a degree and a masters and 17 years experience in my field. Its well hard to live in a half decent area. its grim . I may have a MacBook and the odd avocado toast but I have enjoyed no security of tenure in employment or in renting. My rent is 1600 a month.

Wanderer78

TRANQUILLO wrote:

I was on a salary of 109k at one stage and couldn't get a mortgage as a single man for a reasonable house. My father bought a 4 bed while working in a factory in the 80's. I have a degree and a masters and 17 years experience in my field. Its well hard to live in a half decent area. its grim . I may have a MacBook and the odd avocado toast but I have enjoyed no security of tenure in employment or in renting. My rent is 1600 a month.

A perfect example of how younger generations are getting screwed, it's a train wreck, and it's not just in this country, and these younger folks are expressing it in extremely negative ways, we better start working together to fix it, before we do something really stupid!

TRANQUILLO

Wanderer78 wrote: »

A perfect example of how younger generations are getting screwed, it's a train wreck, and it's not just in this country, and these younger folks are expressing it in extremely negative ways, we better start working together to fix it, before we do something really stupid!

i still don't own a home at 37 and recently lost that job by the way (aviation). Back to the start line i go.

Dizzyblonde

TRANQUILLO wrote: »

i still don't own a home at 37 and recently lost that job by the way (aviation). Back to the start line i go.

That's really tough, this year has made everything worse.

TRANQUILLO

Dizzyblonde wrote: »

That's really tough, this year has made everything worse.

quite disillusioned to be honest. Graduated into 2008 **** show. Emigrated, did my time abroad, came back, more college, parents getting older, trying to start my own family and settle down. Will have to leave Ireland now again and with current rents and eating into savings ill be 40 before im mortgage ready again.

I don't come from money so have no help , ive spent a lot on my training and am quite qualified, but it isn't translating into a stable life at all. Its a real grind and already at 37 i don't have a pep in my step to keep hustling. im knackered.

The thoughts of doing more college etc are soul destroying

Former Former

TRANQUILLO wrote: »

i still don't own a home at 37 and recently lost that job by the way (aviation). Back to the start line i go.

But, in hindsight is it not a blessing that you didn't get that mortgage?

On a salary of 109k you could have borrowed 365k. While it must be demoralising to be where you are, imagine the stress you'd be under if you had a mortgage to boot.

TRANQUILLO

Former Former wrote: »

But, in hindsight is it not a blessing that you didn't get that mortgage?

On a salary of 109k you could have borrowed 365k. While it must be demoralising to be where you are, imagine the stress you'd be under if you had a mortgage to boot.

yeah although i only lost it due to covid which is essentially unprecedented.

The point i wast trying to make still stands. Even when you get to the rock star salary its still really hard if you don't have a partner, if you don't have the deposit, if you're rent is extortionate etc etc

TRANQUILLO

Former Former wrote: »

But, in hindsight is it not a blessing that you didn't get that mortgage?

On a salary of 109k you could have borrowed 365k. While it must be demoralising to be where you are, imagine the stress you'd be under if you had a mortgage to boot.

nobody seems to get their house taken off them either in this country so id probably negotiate lower repayments for a while and tip away. The landlord still wants his 1600

Geuze

Former Former wrote: »

No, this doesn't make any sense. Completely and utterly wrong. Not even close to being true.

The only people who can "create" money are the central banks, and in our case that's the ECB, not the Irish Central Bank.

It is true that money is created by the actions of the commercial banking system.

This happens all the time.

It is a normal part of the commercial banking process.

It is not true to say that only the Central Bank (CB) can create extra money.


The money creation process involves deposits and loans.

Note that as money is created, week in, week out, this does not mean that we are all more wealthy, as the extra money asset is matched by extra loan liabilities.

lainey_d_123

TRANQUILLO wrote: »

quite disillusioned to be honest. Graduated into 2008 **** show. Emigrated, did my time abroad, came back, more college, parents getting older, trying to start my own family and settle down. Will have to leave Ireland now again and with current rents and eating into savings ill be 40 before im mortgage ready again.

I don't come from money so have no help , ive spent a lot on my training and am quite qualified, but it isn't translating into a stable life at all. Its a real grind and already at 37 i don't have a pep in my step to keep hustling. im knackered.

The thoughts of doing more college etc are soul destroying

I'm just a tiny bit younger than you and in a very, very similar situation. It feels like our slice of a generation just got absolutely hammered. I also graduated into the 2008 sh1tshow, emigrated, came back and retrained and was just getting on my feet when the pandemic struck, and it just feels endless. Also was hoping to settle down but dating is impossible now and for who knows how long?

I don't have any advice to offer but just so you know you're not alone. It is knackering and soul destroying.

Geuze

Wanderer78 wrote: »

It's one of the many reasons why I advocate for a public banking system, it might just help in these situations, but it would have limitations also. The title of the thread is very misleading, our economic history is very different to countries such as America

I don't see how changing the ownership of banks would lead to more supply of houses?

AIB, EBS, ptsb are all State-owned, and this has no impact whatsoever on housing supply.

What is preventing more housing supply is:

(1) sites are too expensive
(2) sites are being hoarded
(3) finance for property developers is too expensive - this is what you might be getting at?
(4) we don't have enough skilled trades people
(5) property developers are building student accomm and hotels, as that is more profitable

Geuze

Former Former wrote: »

I don't understand. How do we create money? We can't. It has to be borrowed from somewhere.

https://www.google.com/search?q=the+money+creation+process&rlz=1C1GCEU_enIE888IE888&oq=the+money+creation+process&aqs=chrome..69i57j0l7.6302j0j4&sourceid=chrome&ie=UTF-8

Former Former

Geuze wrote: »

It is true that money is created by the actions of the commercial banking system.

This happens all the time.

It is a normal part of the commercial banking process.

It is not true to say that only the Central Bank (CB) can create extra money.


The money creation process involves deposits and loans.

Note that as money is created, week in, week out, this does not mean that we are all more wealthy, as the extra money asset is matched by extra loan liabilities.

By this definition, every time you make a payment on your mortgage or your car loan repayment, you're destroying money.

This is not money, it's credit. They are not the same thing. As you say, the creation of this money does not make us more wealthy, but that's exactly what was being suggested, that we would simply conjure up the money needed to make everyone rich. The country would be bankrupt inside a year.

Former Former

lainey_d_123 wrote: »

I'm just a tiny bit younger than you and in a very, very similar situation. It feels like our slice of a generation just got absolutely hammered. I also graduated into the 2008 sh1tshow, emigrated, came back and retrained and was just getting on my feet when the pandemic struck, and it just feels endless. Also was hoping to settle down but dating is impossible now and for who knows how long?

I don't have any advice to offer but just so you know you're not alone. It is knackering and soul destroying.

On the other hand, if you'd graduated a few years earlier (like I did), chances are you'd have bought a house on a 100% mortgage (like I did) and then watched as it plummeted in value while your salary was cut and your tax bill rocketed (like I did).

We all have our own sh*t to deal with, I don't think any generation is particularly worse off than another.

Geuze

Former Former wrote: »

By this definition, every time you make a payment on your mortgage or your car loan repayment, you're destroying money.

This is not money, it's credit. They are not the same thing. As you say, the creation of this money does not make us more wealthy, but that's exactly what was being suggested, that we would simply conjure up the money needed to make everyone rich. The country would be bankrupt inside a year.

Yes, the money creation process can be reversed, yes.

Yes, money creation is not directly linked to the income of the country.

Rising incomes are driven by other factors, they are not driven by the money supply.

TRANQUILLO

Former Former wrote: »

On the other hand, if you'd graduated a few years earlier (like I did), chances are you'd have bought a house on a 100% mortgage (like I did) and then watched as it plummeted in value while your salary was cut and your tax bill rocketed (like I did).

We all have our own sh*t to deal with, I don't think any generation is particularly worse off than another.

the value of your house dropping only matters if you want to sell it. you were happy to pay the price at the time. you still have a house.

id love to have a house to complain about depreciation.

Wanderer78

Geuze wrote: »

I don't see how changing the ownership of banks would lead to more supply of houses?

AIB, EBS, ptsb are all State-owned, and this has no impact whatsoever on housing supply.

I'm not just suggesting the possibility of changing the ownership of our banks, as I suspect it could be problematic and difficult, but possibly the creation of new banks altogether, this might be easier and less complicated, debatable of course, these do seem to work very well in other countries such as germany and the states.

I do understand your concerns, and you could be more right than me, as you understand this far better than me. we don't necessarily need to put this newly created money into things such as housing, it could be used for other critical public infrastructure needs, I. E. A public infrastructure bank etc, as you know yourself, it's critical a serious attempt must be made to pay back the loan, even to ourselves, as the system as a whole has limited buffering capacity for things such as defaults and none performing loans etc. If this is allowed to occur, it possibly could cause a collapse of the bank, and further contagion.

please clarify this for me, are all those banks partially state owned, not 100%? thank you

Former Former wrote: »

By this definition, every time you make a payment on your mortgage or your car loan repayment, you're destroying money.

This is not money, it's credit. They are not the same thing. As you say, the creation of this money does not make us more wealthy, but that's exactly what was being suggested, that we would simply conjure up the money needed to make everyone rich. The country would be bankrupt inside a year.

paying down of debt, is in fact the destruction of money, hence why it's critical to maintain a healthy activity of money creation continually, in both the public and private sectors, this is another reason why growing deficits are not a major concern, but it's critical that these debts are regularly serviced, and again, it's critical this money, via the public sector, is put to good use, not like countries such as Italy! so the paying off of public debt, leads to a decrease in the money supply, so its important to maintain some level of continual new public debt, this of course needs to be carefully done, and this money put to good use, whatever that even means. the continual destruction of the money supply, particular in the public sector, and the reduction of the creation of new debt, via the pubic sector, forces the money supply out to the only place it can go, the private sector, which causes its own set of problems, asset price inflation etc. a growing money supply is critical for a growing economy, without which, it simply cannot occur, but this does need to be done carefully, in both the public and private sectors, as we ve recently discovered how bad things can go wrong when too much debt is created, particularly in the private domain.

Money and credit are more or less the same thing, in our modern monetary systems, this is how our monetary systems have been working, for eons. we have just become more dependant on the private sector to create it, particularly over the last few decades, hence our current outcomes, crash etc. Public banks, if setup and operated correctly, safely, tend to be far more stable that their private sector counterparts, as they tend to not engage in high risk activities such as derivatives trading etc, which played a critical role in the last crash, which largely stemmed from these private sector financial institutions. Public banks also tend not to pay its high level staff high wages also, ceo's etc, and have a mandate to serve the public, they generally tend to be plain old vanilla banks, only if they are operated correctly though, as some have not been, leading to all sorts of problems, it sounds like the Italian public banks are a disaster.

Money and credit are more or less the same thing, in our modern monetary systems, this is how our monetary systems have been working, for eons. we have just become more dependant on the private sector to create it, particularly over the last few decades, hence our current outcomes, crash etc. Public banks, if setup and operated correctly, safely, tend to be far more stable that their private sector counterparts, as they tend to not engage in high risk activities such as derivatives trading etc, which played a critical role in the last crash, which largely stemmed from these private sector financial institutions. Public banks also tend not to pay its high level staff high wages also, ceo's etc, and have a mandate to serve the public, they generally tend to be plain old vanilla banks, only if they are operated correctly though, as some have not been, leading to all sorts of problems, it sounds like the Italian public banks are a disaster.

HerrKuehn

lainey_d_123 wrote: »

And that's through their own personal circumstances and/or bad decisions rather than the kind of structural issues millennials face.

Surely your choice of career is something that was within your control? I mean you could have chosen to go into an area that paid better.