Expect no mercy from central bankers, who may themselves have played a considerable part in messing up the world economy. Alan Greenspan, the man who decides US interest rates (and by implication those of the rest of the world) caused dollar instability last week with warnings of interest rates rises to come, which should send shivers down the spine of anyone a little overextended financially with a mortgage, let alone a vulnerable job or business.

The Financial Times on Saturday said “Mr Greenspan was unequivocal about world interest rates, saying rises “have been advertised for so long in so many places that anyone who has not appropriately hedged his position by now is obviously desirous of losing money.”

This is a roundabout way of saying that a fool and his money are soon parted. True, if you pay attention, there has been plenty of indication that rates could rise. However, it is in the nature of national news that short-term editorial weight is given to domestic factors and much less emphasis on the uncertainties of international economic prediction. So the currently subdued UK inflationary environment and the turn in the housing market that the Bank of England wanted to engineer have been enough to create a broad press consensus that interest rates have now peaked, and that the economic future is benign enough. Indeed, there’s a general hope that housing will pick up in the spring. The steady rates outlook was priced into the professional credit markets.

At best, this is what consumer borrowers will hear if they listen. The people who sell credit, which in effect includes the likes of estate agents, have no interest except in presenting the absolute normality of large purchases like houses, even though each prospective buyer is involved in an asset purchase as risky as any stock. This is the problem for the private house buyer. They cannot be expected to have the sophistication of an investment banker, or will their jobs, education or life responsibilities make them aware of the importance of Greenspan’s and Mervyn King’s utterings. The press could be expected to do better, but they won’t.

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