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Property Price Trends in Chennai

Last updated: May 20 2021
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  • Re : Property Price Trends in Chennai

    The economic effects of quantitative easing

    Originally posted by sunr2i View Post
    On Friday - US Fed announced mother of all QE i.e QE3. This shall flood the market with US dollar. In Coming days you would see rupee appreciation and price appreciation of all real assets.
    The economic effects of quantitative easing

    let’s refresh our memory about how QE happens.
    The Federal Reserve has a special relationship with banks in which the banks buy or sell bonds whenever the Fed demands. This is called the repurchase, or REPO SYSTEM and the banks are buying and selling all the time. When the banks buy bonds, they pay money to the Fed, and when they sell, the Fed pays money to them. In this way the Fed can send money in and out of the banking system at will, and that can also control the amount of money in the economy.
    Imagine a swimming pool with a wall about a quarter of the way down it, acting like a dam. The water in the pool is the cash in the economy. Behind the dam is where the banks are located, so they’re up to their chests in money. In front of the dam is the rest of the economy, where we all paddle about in ankle-deep cash. Cash flows in and out of the banking area as we borrow money and save, and the janitor (the Fed) can control the amount of money in the system by taking a bucket load out when he wants the banks to suck more cash out the economy, and by putting that bucket load back when he wants them to lend more cash out to us.
    So far the system is operating with a set amount of cash. The Fed’s bucket work, which is done via the buying and selling of bonds, is called open market operations, and it happens all the time. Quantitative easing is when the Fed adds extra money into the system. It’s a bit like the Fed sticking a hosepipe into the deep end of the pool and turning it on. This is new money, and idea is to almost drown the banks.
    Which brings us to the reason for QE. Once the banks are in danger of drowning in money, the hope is that they’ll start to bail furiously to get the levels down -- and they’ll do that by lending the money to us. You see, banks hate cash, because when it’s sitting in a sweaty vault, cash doesn’t make money. It needs to be invested, lent out, to the likes of you and me. The idea is that once the banks are drowning in cash, they’ll turn around and lend it to us, so that we can go out and buy houses and all the stuff that goes in them. The demand for all that stuff will push manufacturers to hire more people, who’ll then be able to qualify for loans, so that they can go out and buy houses and fill them with stuff, and so on.
    In other words, QE is all about forcing the banks hand, pushing them to lend cash that will reinvigorate the economy.
    The danger, of course, is that if the banks turn on the pump and start pouring cash into the shallow end of the pool, we could end up being the ones drowning in cash. Which is an analogy for a little problem called inflation.

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    • Re : Property Price Trends in Chennai

      They are going to release $40 billion each month until employment situation improves, sounds like open ended statement. The money will find its way into markets like India and China as usual.

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      • Re : Property Price Trends in Chennai

        Why do you think in USA emp will not improve.

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        • Re : Property Price Trends in Chennai

          QE3 destined to fail (just like QE1 and QE2)

          QE3 destined to fail (just like QE1 and QE2)

          On June 30, QE2 ended with a whimper. The Fed’s second round of “quantitative easing” involved $600 billion created with a computer keystroke for the purchase of long-term government bonds. But the government never actually got the money, which went straight into the reserve accounts of banks, where it still sits today. Worse, it went into the reserve accounts of FOREIGN banks, on which the Federal Reserve is now paying 0.25% interest.
          Before QE2 there was QE1, in which the Fed bought $1.25 trillion in mortgage-backed securities from the banks. This money too remains in bank reserve accounts collecting interest and dust. The Fed reports that the accumulated excess reserves of depository institutions now total nearly $1.6 trillion.
          Interestingly, $1.6 trillion is also the size of the federal deficit – a deficit so large that some members of Congress are threatening to force a default on the national debt if it isn’t corrected soon.


          There will not be a sudden economic collapse. What will happen is what has been happening since 2008, i.e, money has continuing less value, 99% of the population become poorer. This will probably carry on until about QE20 when it will take a years wages to afford a loaf of bread.

          Seriously though, the situation will eventually arise like the circumstances in Germany around in the late 1920's when people weren't just skint, but were starving.

          Most people don't physically rebel until they go hungry and have the simple choice of riot/turn to crime or starve to death and die.

          The above is inevitable, monetary and economic decline will continue until this happens. Under the current system, anything else is impossible.
          The market knows that QE has no impact on the real economy and the impact is primarily psychological. Each time the Fed does another round of QE, the psychological impact is diminished. QE announcements are like Howard Stern, shocking at first then kind of repetitive and pointless after a while
          All I know is that gold is back up to $1778 and silver is back to $35 and crude is close to $100.

          What is the definition of insanity?

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          • Re : Property Price Trends in Chennai

            Apart from QE3, the present govt in India surprised the market by introducing long waited reforms. The indication is that more to come from the present govt to rejuvenate the economy and to face the election in 2013/14. Hike in diesel price is not done fully and expect one more within 6 months. Gold and silver are heading north. The price of RE is stubborn within CBD. Younger population of India have more disposable income than before. Also I noticed that lot of young men who are waiting to get married are buying flats to show off their wealth and attract potential bride. Having a flat seems to be integral part of every one's dream in India. When I grew up I never worried about having a home and spent most of the time in rented flats. Now I see Hugh difference in cultural shift to feel sorry for being in rented house!
            Last edited September 21 2012, 10:02 AM. Reason: Spelling

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            • Re : Property Price Trends in Chennai

              Originally posted by sunr2i View Post
              Younger population of India have more disposable income than before. Also I noticed that lot of young men who are waiting to get married are buying flats to show off their wealth and attract potential bride. Having a flat seems to be integral part of every one's dream in India.
              I can attest to that. It does not work out sometimes, I am in late 20's Single and have been seeing some people in the last few months.

              I find it easy to attract N Indian girls, especially the ones from NCR.
              Tall athletic guys with above avg income and assets works out.

              Bengali girls are the best lookin by the way in my opinion followed by Delhi and then rest of the country.

              Chennai girls, do not get impressed by beemers, six pack, salaries and most of all, RE holdings. Recently immigrated Chennai based NRIs are prob the worst, they do not care about any kind of bling.

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              • Re : Property Price Trends in Chennai

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                • Re : Property Price Trends in Chennai

                  Originally posted by k11 View Post
                  I can attest to that. It does not work out sometimes, I am in late 20's Single and have been seeing some people in the last few months.

                  I find it easy to attract N Indian girls, especially the ones from NCR.
                  Tall athletic guys with above avg income and assets works out.

                  Bengali girls are the best lookin by the way in my opinion followed by Delhi and then rest of the country.

                  Chennai girls, do not get impressed by beemers, six pack, salaries and most of all, RE holdings. Recently immigrated Chennai based NRIs are prob the worst, they do not care about any kind of bling.
                  So, you're a tall athletic guy with above avg income and assets! Good on you mate!!

                  BTW, Chennai girls seem to fall for good kadi jokes! Just my 2 cents.

                  PS: Sorry for being off topic.

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                  • Re : Property Price Trends in Chennai

                    Originally posted by murugesh View Post
                    So, you're a tall athletic guy with above avg income and assets! Good on you mate!!

                    BTW, Chennai girls seem to fall for good kadi jokes! Just my 2 cents.

                    PS: Sorry for being off topic.
                    Girls tell me I look like Salman Khan

                    @Murugesh: Is this a good enough Kadi joke to attract Chennai girls?
                    Last edited September 21 2012, 12:05 PM.

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                    • Re : Property Price Trends in Chennai

                      Originally posted by k11 View Post
                      Chennai girls, do not get impressed by beemers, six pack, salaries and most of all, RE holdings. Recently immigrated Chennai based NRIs are prob the worst, they do not care about any kind of bling.
                      Where are these Chennai girls you are talking about?

                      Salary is the most important factor IMO when it comes to girls (for marriage). They can guesstimate based on your profession,company,title etc. Also Chennai girls are more conservative when it comes to profession (engineers, doctors are preferred. A businessman, even if doing good financially might have a relatively hard time)

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