Stock of central government guarantees EUR 19,4 billion at the end of 2009. At the end of 2009 the stock of guarantees was 27 per cent higher than one year previously...
Central government guarantees include all guarantees for which the state is ultimately liable.
Guarantees to enterprises make up 49 per cent of the stock of central government guarantees. Guarantees granted to housing associations made up 22 per cent and those to households made up 16 per cent of the guarantee stock. Statistics Finland
...just wondering until then they will stop fuelling the housing bubble, maybe after the next major election?...
In the same worisome development, we have the following statement:
Minister of Housing Jan Vapaavuori (Nat. Coalition Party) sees signs of possible overheating in the housing market....so please refer to that ("Prophet of the past") to understand the real value of such statement.
“I wouldn’t call this a bubble yet, but there are slight signs of concern in the air. In some growth centres, the situation is worrisome”, Vapaavuori said in Helsinki on Monday.
5 comments:
One year Euribor now the lowest i have seen it. I am assuming that one solution for the 'greek' crisis will be a general devaluation of the euro and a higher inflation target - necessity being the mother of invention.
As far as I understood, higher inflation target (i.e 4%) has been overruled by the ECB and even tagged as dangerous way to go. see http://www.ecb.int/press/key/date/2010/html/sp100225.en.html
In any case, I think at the moment the preoccupation is not about worrying on inflation but instead not allowing to have deflation to take hold or anchors...
As they said they fought disenflation from 1980 until now from a high of 15% inflation to zero. Now the question are we going to see negative inflation (something that is hard to fight as opposed to high inflation, see volcker in the late 1980's)
Euribor is very low because the market participant do not see any sign of recovery above...the rest is media circus, placebo technique or wishfull thinking.
As I said the risk in the short term (2-3 years)to to the downside is very...then depending if there is a policy mistakes we could have the reverse scenario...
One important thing to note, is the price of petrol...80 Dollar while the economy is in depressed state...it just show that we have had prior to the crisis may not have been so far from the fundamentals i.e a petrol higher than 100 dollars.. but again It is something not for the short term ...
The germans so badly messed up lending in the US ireland greece etc etc i doubt they will put up much serious resistance to an easier money policy. They need to do more than just write newspaper articles in the FT
"Just wondering until then they will stop fuelling the housing bubble, maybe after the next major election?"
All sensible western european governments have been very consistent in supporting and encouriging home ownership, as it is seen as one of the very foundations for a coherent society.
Homeowners, btw, are also politically amongst the most influential.
Hence, this support will not stop here, either.
Thanks for sharing your thoughts about zukhra.
Regards
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