Friday, Aug 13, 2010
UK inflation not rising fast enough to counter house price falls
ArabianMoney.Net: Can the UK inflate fast enough to support house prices?
Devaluing the pound earlier this year was a good start but the UK is going to have to seriously inflate general price levels if the economy is going to avoid the agony of falling house prices with their impact on consumer spending, bank balance sheets and the illusion of wealth.
Posted by arabianmoney @ 03:10 AM (537 views) Add Comment
3 Comments
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1. need-a-crash said...
Interesting historical discussion. Seems to imply that despite MW labelling the Tories as the "Blue Home-Ownerists", their general attachment to market forces and budgetary discipline means they invariably do NOT support house price bubbles, or at least not as much as Labour. Will be interesting to see what happens this time...
2. Cheekie Charlie said...
This will surely make the situation worse if people are losing their jobs, taking pay cuts, working less hours! Surely they'll have less money to pay the mortgage!
3. powerofnow said...
look beyond the party colours which are only there to distract us from the fact that they are all the same smelly shade of brown.
The bankers who were arogantly talking up the beautiful power of market forces were very happy to accept social welfare when they finally acknowledged that house prices were way overvalued and banks were full of debt instead of money. If they'd really believed in market forces they would have let the banks go broke and let house prices fall.
Instead the banksters and their government puppets pulled massive bailout debts from the magic hat and dropped interest rates to a 300 year low for one reason alone; to make it look like there was some substance to the value placed on houses.
It's all fake.
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