Friday, Oct 26, 2007
American Disaster
Guardian: We are headed for billions in lost wealth
This is not really news to those of us who have been following the Charles Hugh Smith blog (http://www.oftwominds.com/blog.html) or Dr. Housing Bubble (http://www.doctorhousingbubble.com/). Although the article pertains to the American house market, I suspect that this *VERY* serious problem should concern all of us who are interested in our standard of living in the future.
Posted by quiet guy @ 01:43 AM (452 views) Add Comment
3 Comments
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1. dohousescrashinthewoods said...
Isn't it the cane that more of Britain's wealth is tied up in properthy than the US's
2. planning4acrash said...
Correction, the only wealth held in our properties is that supported by wages (x3.5) and by rental yields (should be 8-12% in my opinion). Anything more is just printed fiat money (which represents a speculative bubble, not wealth) which always leads to inflation (then deflation/correction if associated with assets) because it is not underpinned by fundamentals. The only reason the extra money pumped in made more money was the pyramid scheme where yet more money is created, new entrants pushing prices continually higher until, woe behold, somebody asks how much houses are actually worth. You would't join an internet pyramid scheme, so why join one linked to the roof over your head?!
3. M2 said...
Can you really lose what was never there in the first place? It's a moot point. For anyone unsure as to how precisely to baton down the hatches, I recommend reading this. It's written from a largely American perspective, but the principles are universal.