Friday, Jun 14, 2013

Get worried, George 'Help to Broke' Osborne

Project Syndicate: The Reemergence of Housing Bubbles: Should We Be Worried?

if overnight rates go from near zero to 2.2 percent in three years, and 10-year Treasury rates rise from a recent low of 1.6 percent to 4.5 percent, as projected by the Congressional Budget Office in the United States, then will people in Canada, the U.K., and Australia expect their house prices to fall by 50 percent?
Assuming that most homeowners do not anticipate this sort of plunge in prices, and have not hedged themselves against this possibility, we may be in for another round of very bad news if interest rates ever return to more normal levels. It is remarkable that the latest run-up in house prices has received so little attention from people in policy positions. There may be an enormous price to pay for the continued lack of attention to housing bubbles.

Posted by stuartking @ 05:39 PM (1565 views) Add Comment


1. alan said...

" prices has received so little attention from people in policy positions".

The top people were briefed at Watford last week. Didn't you watch Alex Jones?

If you crunch the maths, you will see the US cannot take higher IRs. Therefore QE will begin to increase soon, not taper off (they may pose a short term threat, but it won't last longer than a rain shower in April).

Therefore inflation will increase - and gold will go up.

...Apart from me, James Steel, commodities analyst for HSBC in New York thinks so.

On June 11th 10,000 people lined up to buy gold in China (they don't have Strictly Come Dancing over there, yet)!

Friday, June 14, 2013 07:29PM Report Comment

2. stuartking said...

Alan, I did see Alex Jones. I agreed with Andrew Neil's verdict - 'an idiot'.

A 'libertarian' subscriber to the works of Russian novelist Ayn Rand; a supporter/follower of Ron Paul; von Mises; and David Icke; a conspiracy theorist who ideas include the US government of being involved in the Oklahoma City bombing, the September 11 attacks, and the filming of fake Moon landings to hide NASA's secret technology and the killing of "thousands of astronauts"; and he organised a successful effort to build a new Branch Davidian church as a memorial to those who died during the 1993 fire that ended the government's siege of the original Branch Davidian complex near Waco, Texas.

Friday, June 14, 2013 10:26PM Report Comment

3. Fraccy said...

There is no "lack of attention" in the UK. The government is extremely focused on the housing market.... :(

Saturday, June 15, 2013 10:10AM Report Comment

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