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Hyperinflation, Default and Corruption - backs of the subsidiary mortgage

Excuse me for quality of machine translation.

Now is amplified (strengthened) is maintained theme of the state popular subsidiary mortgage. If the state is going to subsidy real estates of banking businesses, it is possible safely to name such mortgage state. About it also there will be a speech. Though it is possible to make the clause at once. Expensive long-term subsidy of all population at the expense of the population to goods not will result. (Clarification: the social mortgage is intended not for all Russians, therefore social subsidiary mortgage - separate theme).

Hyperinflation and default at subsidy of the interest rates

The world experience proves, that real mortgage begins to work only then, when there is a market the buyer, i.e. overabundance of again entered housing accommodation. If there is no new housing accommodation, there is no also sense to speak about the mortgage. In any case to begin it is necessary from construction
The assumption: If all subsidies to direct on simple downturn of the Interest Rates (IR), at existing and unsufficient volumes of again entered housing accommodation will take place explosive, the rise in prices on new is possible in times housing accommodation at decrease (reduction) of its quality. And as a consequence the same growth in the secondary market. It is a direct road to a hyperinflation and to possible (probable) default. It is probable, overwhelming the majority will agree with this assumption.

Relative and absolute Fixed payments

As Fixed Payments (FP) the uniform payments under the credits refer to as. A FP are be relative and absolute. Relative FPs (RFP) are measured in percentage of the sum of the credit. Absolute FPs (AFP) - in monetary units: roubles, Constant Roubles (CR), dollars, euro, etc. Thus AFP the mortgage is equal to product of a RFP for cost of housing accommodation.
For the last years the officers is amplified (strengthened) advertise idea the popular subsidiary mortgage. On essence the decrease (reduction) percentage is advertised the rates (IR) and RFP. And at decrease (reduction) of a RFP all over the world occurs rise in prices, much advancing inflation, on housing accommodation. Together with the prices on housing accommodation the AFP will grow also. To example, after simplification of access to real estates and decrease (reduction) of a RFP on 10% of the price on housing accommodation for year grow on 20-30%. And thus already in year of a AFP, which in the beginning also has decreased on 10%, in comparison with a level before decrease (reduction) will increase in 1,08-1,17 times ((0,9 * (1,2-1,3) = (1,08-1,17)). The borrowers by and large owe to interest concrete AFPs in money units instead of RFP in percentage

AFP = RFP * CHA
CHA - cost of housing accommodation

�nd what will be in 2-3 years? In prize will be only very first in long-term turn behind the subsidies. And can there will be no even very first in a prize, because the subsidy are long-term the surtaxes, which will be to be going at the expense of long-term decrease (reduction) the salaries and pensions. And with what You see yourselves and close in this turn?
Was not going to concern the social mortgage, but it is necessary to remind, that first some years by first in turns will be the clients of the social mortgage. All subsequent will be in a deepest loss. I.e. long-term expensive subsidy only the population at the expense of the population to goods not will result.

The absolute sizes Annual Fixed Payments at term of crediting 10 years, various prices on housing accommodation and the interest rates
%%The Prices
year50708090100120150200300
0----1012152030
3----11,7214,0717,5823,4535,17
6----13,5916,320,3827,1740,76
9----15,5818,723,3731,1646,75
128,8512,3914,1615,9317,721,2426,5535,453,1
159,9613,9515,9417,9319,93----
1811,1315,5817,820,0322,25----
2112,3317,2719,7322,224,67----
2413,5819,0121,7324,4427,16----

The quantity of money should correspond to quantity of the goods. The discrepancy can result in a hyperinflation and default. I.e. from what have left to that and we shall come. Only to reduce the prices it is more difficult, than to increase. It is the market the seller. To us the buyer's market is necessary.

A buyer's market

If the same subsidies to direct on preferential competitive crediting of housing �onstruction, at growth volumes of again entered housing accommodation, there will be a decrease (reduction) of the prices on new housing accommodation at increase of its quality. It is growth of economy, new jobs and additional tax receipts. And at last, it is more similar on a buyer's market.
The second variant is better than first. But where competitions there new officers on their realization, additional charges under the contents of the officers, corruption, bribes. And there are a lot of by dissatisfied results of competitions.

Alternative to the subsidiary mortgage

The third variant is easier, is cheaper and more effectively first two. The subsidy for downturn of a IR or on preferential competitive crediting of housing �onstruction require (demand) the additional taxation of other branches of economy and the new officers. It is easier to refuse the subsidies and surtaxes and to apply the preferential taxation to all sector of housing �onstruction, which executes the important social problem. It are not required new the officers. Therefore it is the cheapest and effective method of creation of a buyer's market.

The subsidiary mortgage, corruption and decrease (reduction) of a standard of living.

The subsidies for decrease (reduction) of a IR will not suffice neither banks, nor ordinary to the borrowers. Where deficiency, there long-term turns, corruption and bribes.

Now we shall pass on a logic chain:

That it is a lot of at once and "something" to give to one Russian, it is necessary before it and after that at twenty - thirty Russians are long it "something" to take away, to reduce the salaries and pensions more precisely. By the way, governors of some regions are going to fill up subsidiary budget for account (invoice) of the credits of business banks on by market IR. Well not absurdity? That to a mortgage bank to grant the credit on a preferential IR, take this credit in the same bank on a market IR. Than not a financial pyramid? For whose account (invoice) difference in a IR will be paid?

Of tax privileges to the borrowers

And You see easier and more honourly to replace the subsidy by tax privileges. Even that is less to be humiliated before by the officers and to pay smaller quantity (amount) bribes.
There is a world and Russian experience. The certain categories of borrowers are received by (with) privileges on surtax from wages. The reduction of the Taxational Salary (TS) is exacter on the sum Monthly Payments (MP) under the mortgage.
For example, old TS of the borrower 10 Thousand Roubles (TR). A MP under the mortgage 4 TRs. A new TS - 6 TRs. For the account (invoice) of reduction of a TS a prize on surtax 13% - 0,52 TRs. Accordingly, on the same sum the hypothecary opportunities grow. And in general, the hypothecary opportunities grow in 1,15 times (1 / (1-0,13) = 1,149). In market without subsidy to the mortgage of bribes is not present, because the banks compete among themselves in the markets of the investors and borrowers simultaneously. And with allowance for preservation of the salaries and pensions because of surtaxes on the subsidiary mortgage, officers under the mortgage and reduction of quantity (amount) bribes the hypothecary opportunities can increase in 1,5-2 times.
It is not necessary also to overlook (forget), that at downturn of a IR it is inevitable growth of the price on housing accommodation. The goods You see any more becomes. In general (common), seven times measure, then once cut off.
Terms of crediting can be increased even more, combining fixed payments with subsequent differential, combining with amortization and etc.

Stabilization fund, housing �onstruction and mortgage

Housing Construction (HC) it actually housing �onstruction, production building materials, the communications, power capacities, etc.
1-st stage:The Sector of a HC performing the important social problem, receives tax privileges. The stabilization fund credits in Constant Roubles (CR) creation of new competing capacities in this sector. It will result in increase of volumes of a HC, increase of quality and decrease (reduction) of the prices on housing accommodation.
If all means at once to direct on decrease (reduction) of a IR, at unsufficient volumes of construction can to take place an explosive rise in prices on new housing accommodation at unsatisfactory quality of construction, and, as a consequence in the secondary market of housing accommodation.
2-nd stage: At first goods, then money. Therefore only after occurrence of an overabundance again entered housing accommodation, is possible to begin to cautious financing of the mortgage in CR, not supposing essential rise in prices on housing accommodation
RUSSIAN ANALOGUE (12 kb)
  1. English pages. Main (7 kb)

  2. Russian pages.Main (8 kb)

  3. The brief contents of the placed themes (9 kb)

    THEMES of CONSTANT ROUBLE

  4. Constant Rouble - against dollar. A rate of a CR - Index of the Prices. The CR will ensure real preservation and the augmentation of a buying power of the savings, will make the credits by more accessible (15 kb)

  5. In what the reason and paradox of the Unreal Interest rates? The disputable inflationary forecast (10 kb)

  6. Comparison acting and offered of tax systems. As To double a gross national income, having got rid from the Parasitic Inflationary Taxes. Tax reform (18 kb)

    Important theme. Without tax reform will not be essential growth economy and standard of living, neither new housing accommodation, nor decision of housing problem.

    The Parasitic Inflationary Taxes (PIT) "eat" enclosed in production the capitals: constant and turnaround, salary and pension. This theme is more important than the mortgage, since from anything is received anything.

    An Example of a PIT for a Working capital (WC)
    - Inf - 0 %:     the Prices, the Cost Price (CP) and rate of a CR do not vary. The businessman Somebody on 100 Millions Roubles (mr) has acquired components. They were not necessary, and in one year he has reseiled them till a CP for the same 100 mrs. Profit or Added Cost (AC) - 0. The taxes - 0. Losses - PIT - 0. Is possible at necessities to acquire new components.
    - Inf - 100 %:The Prices, CP and rate of a CR for one year are doubled. In the beginning of year 100 mCRs = 100 mrs. In one year 100 mCRs = 200 mrs. Somebody reseils furnishing on a new CP, since the prices were doubled, for 200 mrs, receives imaginary inflationary profit (or imaginary inflationary AC) - 100 mrs, pay the taxes (from the imaginary profit?!) - 50 % - 50 mrs. He still has 150 mrs or 75 mCRs, on which it is possible to acquire only 75% of components. Real losses - 25% real buying power of a WC. It also is a PIT for a WC.
    The indicated example of a PIT is equal half of ifference between a new real CP and old, indicated in tax declarations. I.e. at a zero Inf of a PIT is not present in general, since. The CP does not vary. With growth of a Inf the burden of a PIT grows also.

    The Losses from a PIT somebody will transfer on the salary of the hired workers. If he will cover the business, the workers and their families, in general, will stay without a piece of bread.

    From the indicated examples it is visible, that at a zero Inf of a PIT is not present in general. With growth of a Inf the burden of a PIT grows also.

    Tax reform
    The essence of tax reform - legislative fixing in the tax declaration of the Cost Price in a CR, that will allow to get rid of a PIT and to make production favourable and fast growing. It:
    - New jobs and decrease(reduction) of unemployment
    - Essential growth of real wages and pensions
    - Additional tax receipts at fast growing economy
    - Decrease (reduction) of expenditures on public account on the unemployment benefits
    - Etc.

    The MORTGAGE

  7. The Mortgage. An introduction theme. Account fixed and differential payments (12 kb)

  8. Constant Rouble will make (without the subsidies) the mortgage by more accessible (14 kb)

  9. Three formulas of account of fixed payments. What correct? (10 kb)

  10. Conclusion of the formula of account of fixed payment (12 kb)

  11. Optimum real estates: the size, term, interest, currency. (19 kb)

    The mortgage begins with comparison of variants. Here 4 comparative tables with percentage by the rates - 0; 1;... 18; 19%/years and with terms of crediting - 5, 10, 15, 20, 25, 27 and 30 years:
    1 - Monthly Fixed Payments (MFP)
    2 - Factors of Credit Status (FCS). With the help of a FCS it is possible to expect as the much as possible allowable sums real estates
    3 - Sum of a MFP for all term of crediting
    4 - Sum of percents (interests) for all term of crediting



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