Bullion naturally rises in U$D terms in the face of QE, money creation and low IRs. In order to protect the $ (and its reserve status) and make big profits for bullion banks like JPM and HSBC the Fed and those banks drive down bullion prices by the use of illegal uncovered shorts in the bullion futures (paper) markets. They then cover those shorts at the lower prices resulting from the selling that comes from triggering stop-loss orders and margin calls. Wash, rinse, repeat.
Shelter trying to frame a longstanding issue in a new light
'âTo discriminate against landlords and remove these reliefs, which are offered to other businesses, would cut a swath through their profitability calculations and prompt many to sell up and invest elsewhere. That would mean even higher rents for those forced to chase after a shrinking pool of rented housing,â he warned.' Who does this idiot think the houses would be sold to, if not the wealthiest tenants, whose removal from the pool of people looking for flats to rent would surely push demand down by as much as supply, in quantity terms, and more so in price terms, since wealthy people are prepared to spend more on rent? I'm really sick of this nonsense going unchallenged in the press.
Expected spike after election
A family or a house - your choice
It is sensible for banks to look at mortgagees costs but under the UK's tax system whereby single income households are taxed at a much higher rate than dual income ones, more and more couples have to choose between having children or ever owning a home. The only way to escape single income punitive rates is to become a contractor under a limited company and distribute dividends to the non-working spouse, but this just about rules you out for a mortgage anyway. Quite a few people who I worked with have done this, but they all have lots of home equity and/or long fixed rates so can sit and chomp down the mortgage. After a few years of contracting banks will look at you again, but with caution as they don't have a permanent pay cheque to trouser.
Positive Duration Dependence
It's pretty clear that this blog has attracted doomers (myself included) who have been too negative in their outlook but some financial commentators are a bit worried: "Stephen King from HSCB warns that the global authorities have alarmingly few tools to combat the next crunch, given that interest rates are already zero across most of the developed world, debts levels are at or near record highs, and there is little scope for fiscal stimulus. 'The world economy is sailing across the ocean without any lifeboats to use in case of emergency,' he said." Perhaps we'll be fine but further financial stimulus could be tricky.
Bbubbles are social-psychological phenomena, so are naturally difficult to control.
A speculative bubble is a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increase." This attracts "a larger and larger class of investors, who, despite doubts about the real value of the investment, are drawn to it partly through envy of others' successes and partly through a gambler's excitement."
Just a shortage of affordable houses
That there is a chronic shortage of housing in this country has become a sacred shibboleth. Politicians make solemn pledges to build 200,000 more homes by some vague future date to offset this supposed shortage. But the market is still way off the volumes of previous decades. Is there really a shortage of property in this country, and is this the main factor in ever increasing prices? Merryn doesnt seem to think so.
Tristram Hunt ducks out of leadership race after discovering he's a Tory
Steve Keen debunks naive austerity economics of Lab, Lib and Con
If the government is to run a surplus to pay down national debt, it does so by reducing private sector savings. So a permanent surplus policy involves economic contraction or increasing private debt (which eventually can't be sustained). Simples, with a minor caveat about velocity of circulation. The only thing I'd take issue with is his claim that increasing public sector deficit is expansionary - it depends how the finance is raised, and in the UK it's generally through the bond market, and such that no new credit is created.
UK now in deflation - apart from average house prices
The price level has fallen, for the first time since ...? A blip into that territory in 2008 and before that the 1930s great depression. There is good deflation and bad deflation. The difference is not really explained, but here in the UK it is believed to be good deflation. Is good deflation that with a Union Jack on it, I wonder? To read the article, type the source title into google.