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Ft Article On The Virtues Of Debt


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#1 bmf

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Posted 25 February 2012 - 12:44 PM

http://www.ft.com/cm...144feabdc0.html

Google for "ft decry debt" or try the link below.

http://www.google.co...q=ft decry debt

Lots of people join in to say what a fool Chris Giles is.

#2 Executive Sadman

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Posted 25 February 2012 - 01:31 PM

So Bernie Madoff changed his name to Chris Giles and now writes for the FT. Strange world, innit.

We could write for ages on earnings vs inflation, the exponential function, production vs consumption, debt saturation and so on. But it wouldnt be worth it. The article is laughable.
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#3 Executive Sadman

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Posted 25 February 2012 - 01:38 PM

I mean, outright lies like this...

( i darent copy the whole sentence, as the FT has a very sinister sounding T&C disclaimer), but the line that starts with "In 1995 household debt"

Argues that its OK because 'wealth' has outstripped debt.

Except it hasnt, because debt is actual debts incurred, whereas value/wealth is a market wide assumption based on a small transaction volume at a specific point in time.

There was lots of alledged Dotcom wealth, for a time. Then we found out it didnt actually exist. The same goes for housing 'wealth'.

Edited by Executive Sadman, 25 February 2012 - 05:38 PM.

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#4 Bloo Loo

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Posted 25 February 2012 - 01:44 PM

I mean, outright lies like this...

( i darent copy the whole sentence, as the FT has a very sinister sounding T&C disclaimer), but the line that starts with "In 1995 household debt"

Argues that its OK because 'wealth' has outstripped debt.

Except it hasnt, because debt is actual debts incurred, whereas value/wealth is a market wide assumption based on a small transaction volume at a specific point in time.

There was lots of alledged Dotcom wealth, for a time. Then we found out it didnt actually exist. The same goes for housing.


if the wealth existed, then the banks could lend against it.

Much of the debt that has been lent is based on assets that are themselves derived from debt....so yes, in theory, one home borrower could be supporting many millions of debt....in other words, the wealth that a home and shelter for a family, is the wealth covering many millions of debt.

that 1995 home is exactly the same home in 2012....the debt is many many times larger than it was in 1995.
WARNING

Your
country is at risk
if you
do not keep up repayments
on a gilt or other loan secured on it





#5 bmf

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Posted 25 February 2012 - 02:16 PM

if the wealth existed, then the banks could lend against it.

Much of the debt that has been lent is based on assets that are themselves derived from debt....so yes, in theory, one home borrower could be supporting many millions of debt....in other words, the wealth that a home and shelter for a family, is the wealth covering many millions of debt.

that 1995 home is exactly the same home in 2012....the debt is many many times larger than it was in 1995.


Because people are being asked to pledge more of their future earnings to buy the same asset.

The (older) seller realises the profit at the moment of sale. The buyer pledges to pay off 6 times wages (or more) over a painful 25 years.

This is simply pulling demand forward from the future in order to allow the continuation of unsustainable lifestyles of the boomers.

Having now reached the point of debt saturation where people cannot pledge to work for longer than they will live the wheels have come off.

#6 satch

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Posted 25 February 2012 - 02:21 PM

Because people are being asked to pledge more of their future earnings to buy the same asset.

The (older) seller realises the profit at the moment of sale. The buyer pledges to pay off 6 times wages (or more) over a painful 25 years.

This is simply pulling demand forward from the future in order to allow the continuation of unsustainable lifestyles of the boomers.

Having now reached the point of debt saturation where people cannot pledge to work for longer than they will live the wheels have come off.

No, we will have intergenerational mortgages. What is the problem with that?
George Osborne July 2013; 'I don't think in the current environment a house price bubble is going to emerge in 18 months or three years.' Mark Carney September 2013; ' ... there has been an improvement in prices and activity (talking about the housing market) Osborne to cabinet as quoted in the Indie October 2013; "Hopefully we will get a little housing boom & everyone will be happy"

Osborne says; “Printing money is the last resort of desperate governments when all other policies have failed.”

George Osborne December 2008; “Savers and pensioners are the forgotten victims … They are innocent bystanders and it’s simply not good enough for the Government to walk on by."

In his 1997 Budget speech, Gordon Brown said, "I will not allow house prices to get out of control and put at risk the sustainability of the future". He went on to say that he did not want a return to "instability, speculation and negative equity" of the 1980's and 1990's.

#7 bmf

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Posted 25 February 2012 - 02:25 PM

No, we will have intergenerational mortgages. What is the problem with that?


That's the kind of creativity we need! Will you accept an X on the contract from my son? He's only 3 but wants his own bedroom.

#8 Bloo Loo

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Posted 25 February 2012 - 02:56 PM

Because people are being asked to pledge more of their future earnings to buy the same asset.

The (older) seller realises the profit at the moment of sale. The buyer pledges to pay off 6 times wages (or more) over a painful 25 years.

This is simply pulling demand forward from the future in order to allow the continuation of unsustainable lifestyles of the boomers.

Having now reached the point of debt saturation where people cannot pledge to work for longer than they will live the wheels have come off.


just wondering why it takes the wealth of a second generation to buy what the previous gen could buy with 3 years wages.

Is it because its all being stolen....
WARNING

Your
country is at risk
if you
do not keep up repayments
on a gilt or other loan secured on it





#9 billybong

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Posted 25 February 2012 - 03:03 PM

So Bernie Madoff changed his name to Chris Giles and now writes for the FT. Strange world, innit.

We could write for ages on earnings vs inflation, the exponential function, production vs consumption, debt saturation and so on. But it wouldnt be worth it. The article is laughable.



It so reminded me of the day I drove past an Abbey National branch and saw the advert in the window display bragging
in huge red letters 6 X SALARY - and afterwards lenders mortgage multiples got even worse and that was quite a few years before the UK's economic collapse due to the crazy debt.

Edited by billybong, 25 February 2012 - 03:11 PM.


#10 Errol

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Posted 25 February 2012 - 03:18 PM

No, we will have intergenerational mortgages. What is the problem with that?


Yay! Freedom through Debt! Debt is good. More debt can fix a debt problem. :lol:

Edited by Errol, 25 February 2012 - 03:18 PM.

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#11 interestrateripoff

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Posted 25 February 2012 - 04:34 PM

No, we will have intergenerational mortgages. What is the problem with that?


It's easy to fix isn't it people just aren't trying hard enough.

In fact we can rapidly expand the economy by increasing the price of TV, PC's etc... so it takes you 10 or 20 years to pay of the purchase. We can ramp the economy like never before...

Proof that Brown had repeated IMF / OECD / BIS warnings over house prices and did nothing!!!
Looting: The Economic Underworld Of Bankruptcy For Profit
The exponential growth of debt and the unsustainability of debt
The logic of HPI @ 10% YoY means your £100k house would be worth £1.38bn in 100 years
Paying down my mortgage with money found on the street

It's time to sue the Bank of England / Federal Reserve for GROSS NEGLIGENCE
If DEBT is the problem REPAYMENT is the solution or you default

 

"The trouble with the world was that prices were so low that only the rich people could buy and the aim of the Conference was to raise them to a point where it would again be possible for poor people to buy something."

"Northern unemployment is an acceptable price to pay for curbing southern inflation" Eddie George former Governor of the Bank of England

New digest on the credit crisis and economy Part2 Part 3

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#12 Giordano Bruno

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Posted 25 February 2012 - 04:43 PM

No, we will have intergenerational mortgages. What is the problem with that?

I don't think that could work. A debt cannot be passed onto an offspring, or left in a will to someone else, surely. If it could, I know a few people I would like to leave debts to.

----------------- ********************** -----------------


Regarding QE I think that Fiat Money Inflation in France is worth a read.

Property prices only ever go up ... except, of course, when they stay the same or when they come down.

You can go wrong with bricks and mortar.

The banksters need their lovely fat bonuses. The taxpayer has to pay.
Never mind, Taxpayer. Think of it as an exercise in generosity.

Profits will be privatized and losses will be socialized. - Thanks a bunch!

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#13 bmf

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Posted 25 February 2012 - 05:38 PM

just wondering why it takes the wealth of a second generation to buy what the previous gen could buy with 3 years wages.

Is it because its all being stolen....


If by stolen you mean kept by prior generations, then yes, it's being stolen.

How, when housing is exempt from capital gains, is the money stolen from someone who paid 80K for a house they sell for 600K? They might loose some due to inflation, but this applies to all generations. They might loose some in fees if they go to invest in via the city. But I'd say the one party that are getting utterly shafted is the person buying at greater than 6x wages.

#14 eric pebble

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Posted 26 February 2012 - 12:16 AM

It so reminded me of the day I drove past an Abbey National branch and saw the advert in the window display bragging
in huge red letters 6 X SALARY - and afterwards lenders mortgage multiples got even worse and that was quite a few years before the UK's economic collapse due to the crazy debt.



i.e. TOXIC PREDATORY LIAR LOANS
What the media today are still not telling us in full - for some reason the lid is being kept on the whole story:
HERE IN THE UK: THE UK SUB-PRIME CATASTROPHE - IT IS NOT ONLY IN AMERICA!! THE UK LIAR LOAN INDUSTRY - Source of FICTITIOUS "MONEY", and the principle driver of the House "Price" Pyramid/Ponzi Scam & Bubble, the "Credit Crunch" - and an unacknowledged major part of and cause of the ensuing Worldwide Financial Crash.
---------------------
The following was reported in a superb documentary in late 2003 - This is now over 10 years ago!! Since then shamefully little has been done here in the UK by journalists/broadcasters to dig down deep on this story - a vast elephant in the room: Why? If you're a serious journalist - here's your story - start investigating - it is the biggest financial scandal of all time:

THE ARTICLES BELOW ARE FROM AS FAR BACK AS 2003!!

Mortgage customers 'urged to lie' - All this was way back in 2003 by the way!!
Housebuyers are being encouraged to break the law in order to obtain huge mortgages, the BBC has discovered. Brokers, and even banking staff, have been telling buyers to lie about their incomes to get bigger and bigger loans. And these underhand tactics could also be the reason why house prices have gone on rising for so long.
CLICK HERE - http://news.bbc.co.u...ess/3222053.stm

"Could you believe that a bank would invite customers to defraud it? It may sound incredible, but that is what some of Britain's biggest mortgage lenders have in effect been doing."
CLICK HERE - http://news.bbc.co.u...ess/3478635.stm

The BBC Money Programme uncovers massive mortgage fraud [2003!]: BBC TWO's The Money Programme has revealed a huge mortgage fraud with brokers from some of Britain's biggest estate agents and financial advice groups advising customers to break the law and lie about their incomes to get massively bigger mortgages. And it shows how the illicit cash raised by this method has been pouring into the housing market, boosting prices and leaving many people risking financial ruin.
CLICK HERE http://www.bbc.co.uk..._mortgage.shtml

AND READ THIS: - http://www.housepric...howtopic=152508
-----------------------------
WATCH THE VIDEO OF THE 2003/4 DOCUMENTARY HERE: -
Click on parts 2 & 3 as you go along watching this video.
------------------------------
AND WATCH THE LATEST VIDEO OF LIAR LOANS STILL IN ACTION HERE in 2008 - http://news.sky.com/.../20080641317257

#15 'Bart'

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Posted 26 February 2012 - 05:22 AM

No, we will have intergenerational mortgages. What is the problem with that?

What if you don't intend to have children?




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