Prescience

Nonsense! ONS stats showed in the past three months, EU member states exported £23.8 billion pounds more to the UK than the UK exported to EU states. Many top major UK companies are owned by EU and US investors. You are therefore suggesting the sclerotic EU economy, already mired in unemployment, disastrous growth and forward prospects, will not just shoot itself in the foot, but blow both feet off and its legs as well, as a spiteful reaction? Even blobby fools such as Hollande aint that stupid! In any case, such hostile actions would immediately trip hostile reactions. Since absolutely nothing has changed since the results of the referendum were published, and nothing could until and unless the UK's elected government manage to gain a majority vote on a formal exit (which then still must receive approval from the Lords; all of which takes time), then any formal notice of withdrawal must be delivered to the EU Council of Europe and voted through its parliament etc; yet the sainted markets have already started massive speculation and value destruction on a knee jerk basis. Which demonstrates precisely why the core problem with Britain is politicians love of and myopic comprehension and continued defence of their beloved "City".

Oh very amusing........... Not. Clearly you utterly lack the ability and focus to comprehend analytical synthesis.

Not quite sure where you are going or what you are suggesting? In essence it would seem you are proving my core posit: the market is rigged against free supply and demand and against the interests of a majority.

UK Mortgage Debt: 1,278,702,000,000 gross outstanding. (Source: B of E) 20% value loss = £ 255,740,400,000 30% value loss = £ 383,610,600,000 “The scale of the support currently provided to UK banks has fallen from a peak of £955bn to £512bn, but the amount of cash currently borrowed by the government to support banks has risen by £7bn [to a total of £124bn] since December 2009. The scale of the support currently provided to UK banks has fallen from a peak of £955bn to £512bn, but the amount of cash currently borrowed by the government to support banks has risen by £7bn [to a total of £124bn] since December 2009. “ Source: https://www.nao.org.uk/report/maintaining-the-financial-stability-of-uk-banks-update-on-the-support-schemes/# ____________________ Japanese Asset Crash. "By 2004, prime "A" property in Tokyo's financial districts had slumped to less than 1 percent of its peak, and Tokyo's residential homes were less than a tenth of their peak." 1986 to 1991 Japan and its banking system has yet to recover from this idiocy: when the Emperor’s Summer Palace in Tokyo was in theory, worth more than the whole of California! _____________ Let’s consider house prices. Average House Price: £186,325 Average Wage: £ 26,500 Traditionally, a mortgage applicant could expect 3.5 X gross earnings. Indeed the standard textbook valuation of residential property was 3.5 X gross Earnings. And rents should be expected to return capital cost in 10-13 years. Today after the 2007-08 financial hump it sits at circa 4.5 X gross earnings. “Ah!” I hear the cry “But normally there are two earners, a couple!” Indeed; however lenders will now usually consider 4.5X Gross earnings for one; and just 1X for the second. Thus lets say a couple both earn average wage: 4.3 X the first and 1 X the second = £140,450. Yet most would be buyers live in the South: South East: Average £ 350,000 East of England: Average £ 283,000. South East England has highest pro rata pop density, circa 9 million (However, let’s not forget Credit Score; plus existing debt, which is hugely significant as it is taken into account on the new post-2014 “Affordability” regime.) Back to the core argument: everyone, mostly agrees, the UK housing market is ludicrously dysfunctional. If 4.5 +1 (Gross Income) = value, then the average house price should be worth circa £145,750. If this corrected, in say the East of England (Case 1), then this would create a value capital loss of £137,250. In the South East (Case 2) it would be £204,250! Expressed in percentage terms, then: Case 1. 48% Loss. Case 2. 58% Loss. Now, let’s synthesise these resultants into the mortgage debt stats here we started. £1,278,702,000,000 gross outstanding mortgage debt. (Source: B of E) For argument and erring on the side of optimism I shall use the East of England calculations. If mortgage lenders suffered a 48% loss of hypothecated (Secured) value, then this would equate to equity depreciation in the region of £613,776,960,000. Makes the £124 Billion the government borrowed to support the dastard bankers look like small change! Finally consider rents: UK 40% of net income: Germany: 25% European Average: 28% I therefore, robustly support my contention in the Opening Post. Namely, the Bank of England, Government and the banks cannot dare allow a real market correction, since it would destroy the UK monetary and financial systems. Ergo, as with diamonds it is now a wholly contrived market and to believe the government could or would do anything major, rather than simply fiddle around the edges to placate the voters, is to believe Santa Claus and the Tooth Fairly will be riding to the rescue anyday soon....

Did you know, Soviet Russia reached a cabal-type agreement with De Beers/CSO and set-up its own marketing operation in Zurich? They sold exclusively to De beers. Later on, Russia developed artificial stones and mixed these in with the recovered stocks. De Beers knew this and continued buying. Well, it's taken a long time for "Fundamentals" to kick in! De Beers have been contriving the global diamond market since the 1800s, since Cecil John Rhodes managed to assemble his monopoly in Kimberly! Fundamental should tell us the USA is broke! Considering its total debt. Yet it still plods along issuing debt paper and bank notes which are valued as reverse assets almost everywhere. If someone is monetarily and financially wealthy enough, then it is they who control the "fundamentals". e.g. Rhodes; Goldman Sachs; John D Rockefeller, et al.......

That is not what I am suggesting. I am however suggesting the Government, B of E and banks would move heaven and earth to prevent any serious depreciation of house prices, since such would seriously affect bank's asset position; remebering, despite Basel 2 and "Stress Tests" and because of out-of control Fractional Reserve Lending and banks creating credit money like fun, a major hit to their assets could perhaps would trip a meltdown of the essential financial and monetary systems which keep the whole UK charade afloat. Therefore, Government, B of E and banks would do almost anything (at everyone's expense!) to prevent this scenario. Thus the hoped correction galvanised by Supply-Demand will not be allowed to happen. More on this shortly.

OK I'll guess. World Trade Forum? Westminster Tossers Folkclub? wtf, language code for the Watiwa language, a Trans–New Guinean language world taekwondo federation ????????? Some substantative debate would be rather more welcome, perhaps.

Care to dignify your unconnected gibberish with some empirical evidence? Facts and figures? Doesn't the sheer reality of UK's residential housing stock representing 63% of TOTAL capital value, enjoy any significance to you?

Many members of HPC seem hellbent on believing a price crash is just around the corner... Some proponents of such believe the UK residential property market has been restricted by excessive planning policies and preservation of the much vaunted Green Belt. They suggest that if the suppply of housing approached demand, then prices would fall, basing this argument on the core economics law of Supply & Demand. There is a core flaw to such hypothesis, sadly. Consider the ONS annual analysis of Britain's capital wealth, just published. http://www.ons.gov.uk/ons/rel/cap-stock/the-national-balance-sheet/2015-estimates/stb-nbs-2015.html I have tracked these reports since the early 2000s: and the proportionate value of UK residential housing hasn't altered much since then. Residential property remains a basic balance sheet asset of banks and mortgage lenders. A significant property price crash would mean all UK banks were insolvent; inter alia, the UK's financial and monetary system also would implode. As with De Beers and the CSO (Central Selling Organisation), if the price of diamonds crashed, then so would many banks as what are called Investment Stones (top quality diamonds of multi-carat weight, complete with geological certificates, X Ray Crystallography reports etc), live permanently in bank's vaults as bastions of reserve and investment value. However, De Beers and others have millions of carats of fine recovered diamonds sitting in their vaults too: since if they dumped this stock onto the global market, then the price and value of diamonds would crash. In other words, an utterly contrived and synthetically contrived and controlled market. (I had some considerable experience of this way back in the late 1970s: and became rather frightened for my own safety!) The stark conclusions are, sadly inescapable: If government and the Bank of England really saw a massive growth in potential new build development, then they would rapidly realise the very monetary and financial system and government itself would be effectively extinct. Clearly, whilst the basic Economics law of Supply and Demand does actually function in true open markets (There is no such animal as a Free Market: since most major markets comprise a series of cabals and effective monopolies. e.g. oil and gas; gemstones; coffee; etc), where and when any commodity becomes a keystone of a financial and monetary system, then it will be ruthlessly controlled, contrived and restricted. Happy New Year!

Oh, real distribution of wealth occurred indeed: via taxing the middle earners to pay for the social state et al, whilst the uber rich sheltered their wealth. Which is precisely how and why, for example, Gerald, Duke of Westminster sits on leashold and freehold assets of in excess of $12.i billion........ If IHT in all its incarnations had actually worked, then this wealth pot would have been utterly impossible to achieve. However, more to the point, you posited the social state was introduced to prevent a sort of 20th siecle Peasant's Revolt. Which clearly didn't happen................ on either side of your proposition.

Perhaps one must separate "Debt" of real specie, from "Debt" related to Credit Money Creation: i.e. illusory "money"? In the case of "Money" created by sleight of hand, rather than from honest toil and real measurable growth, (e.g. money borrowed from friends, parents etc), then Mickey Mouse money aint money! And this is surely the core problem? The Western financial fiat monetary system has been created by a mix of venality and chicanery and urgently needs to collapse, that social order might be returned. Otherwise, we face revolution, anarchy and a complete collapse of ordered society. Or indeed, a takeover of Europe (and eventually, the USA) by Asia. Since it is now only Asia which creates real new primary wealth: as against imagined "Wealth" based upon speculative and transitory possession, mainly of debt instruments. (n.b. I leave out Gulf State et al "Wealth" since it again is transitory and a fast diminishing natural resource-based asset.)

In order to properly understand "Communism", one must first, study the works of Dr Karl Marx. Most commentators on the topic do not. Marx concluded, early on, if he was to realise his dream then he had to harness the joint power of what we might call today, SME owners as well as workers. Most nation states which call their system "Communism", are lying; their imposed system is simply a combination of collective inefficiencies added to a sort of quasi-Fascism. Soviet Russia proves the best exemplar. "For each, according to his needs: to each according to his abilities!" Dr Karl Marx

I wrote and published this in 2005. For quite some time, I have been considering the matter of politics, political propaganda, the unconscious ignorance of the majority of the mass British voter and how one would address the problem of starting a new political party and actually securing a huge landslide victory. I offer the following, as a sort of blueprint to success. Rule One: Find a multi-billionaire, who will provide almost endless funds, on the publicly stated grounds of "Assisting to promote a true democratic restoration": and ensure that their real reasons for payback are totally hidden and secret. This will enable you to employ saturation advertising in order to further brainwash the masses. Persuade him/her to take-over both a major newspaper and T.V company. Rule Two: Select, very carefully, really good looking guys and gals, (with excellently screened backgrounds, in order that no skeletons in the cupboard will emerge to haunt you!), who are reasonably articulate and speak the language of the masses. Frequent usage of such expressions as "Yeah!", "Right on man!", "I mean"., 'yer know what I mean, Man!", "Right!" etc would be mandatory. Therefore provide an army of speech therapy and voice coaching experts. Ensure that these putative MPs are fully up-to-date on populist culture. Both men and women ought to enjoy the stamina to drink 15 pints of strong lager, whilst snorting cocaine and swallowing E tabs and perform well in clubs. The ability to speak drivel, for two hours non-stop, on a wide ranging, critical series of issues, such as rap, football and to intimately know each and every character in seven T.V. soaps should be seen as essential. Rule Three: Adopt at least 90% of the following, to be major issues in your election manifesto: 1. Sack the royal family and appoint David Beckham as king and Posh Spice as his queen; 2. Promise that all drugs will be de-criminalised; 3. Promise that all citizens can possess a wide range of weaponry, for "Self Defence", including fragmentation grenades, section machine guns, howitzers etc; 4. Plan to include at least ten soap stars, ten tone-deaf pop "Singers", five super-models, fifteen top footballers and five "mega-stars" in your cabinet; 5. Offer free government facilities for body piercing and tattooing; 6. Offer free entry to all football matches, with government picking up the tab; 7. Promise to reduce tax on alcohol to zero; tax on cigarettes to zero: and petrol to zero; 8. Give a free car (Ferrari) to every child once they reach 18 years of age, with free government funded insurance; 9. Quadruple state pensions and promise an annual increase of 25%; 10. Promise to cut all taxes by 75%; 11. Promise that all children will receive a top-grade pass at every exam; 12. Guarantee both a place at university and an honours degree, for every child, no matter how illiterate/innumerate; 13. Include such esoteric items as "Becoming a Rock Mega-Star"; "How to be a Super-Model"; " Become a top football star" on all curricula; 14. Reduce the retirement age to 45; 15. Set-up a state trust fund of "1 million, for every child at birth"; 16. Promise never to invade any other nation state; 17. Make the maximum British working week 20 hours; 18. Promise to reduce the maximum permitted carbon emissions of the Kyoto Accord by 50%; 19. Promise the best road and rail network in the World, paid for by the state, with low rail fares and no road tolls; So, you have won. What next? 1. Abolish both houses of parliament; 2. Appoint your pre-selected dictator; 3. Award the armed forces a 100% pay rise; 4. Quadruple the police; 5. Create a Secret Police organisation, more violent than any other in history; 6. Start really sorting out the problems!

Not quite. It is an increase in the supply of money and equilibrium in GDP: or a contraction. Classically, Too Much Money Chasing Too Few Goods. Now if you read what I wrote again: "The key to real monetary inflation is wage and salary rises." and consider, then you will see that by "Key" I mean increases in wages are a resultant. If real true inflation is raging then the cost of living increases, across the board: it cannot be predicated or indicated by the increase in raw materials for fizzy drinks! Question: between 1997 and 2008 (Nominally) you would agree, I'm sure that house price increase far outstripped wage increase: By factor huge% say? So if the cost base for living accommodation (Since rent tends to lag, but rise in sympathy with property capital value increase). Why therefore wasn't inflation raging away in double figures? Crude Oil (An essential) ranged from $ 60/barrel to $ 150/barrel: thus again, inflation ought to have been raging.

Ah: so you are an expert on Economics theory as well as Motivational Psychology and Behavioural Science too then. Impressive: where did you read your multitude of doctorates?

Not inflation: it is Cost Base price Increase. The key to real monetary inflation is wage and salary rises. In the past we have seen Cost Base price increases caused by all sorts of extraneous events: such as copper shooting through the roof back in the late 1960s. Caused by civil wars in African copper producing states. So for wire, aluminium was used instead. For example on cars for the heavy duty battery wires: and on power transmission with a steel core. Classic example of Supply and Demand forcing alternative product. One of the problems with modern post-Keynsian economies using fiat currencies and monetary systems is those supposed to be in charge not actually knowing WTF they are talking about. Include Mystic Merve in this gaggle of clowns.

One is minded to recall the last round of Russian Bonds were used as wallpaper.............

We used to see this in France, too. Working class Brits, unused to capital, sold their house at top of the market and suddenly believed they were millionaires. Why would a man create this totally OTT ostentatious pile: and then take a part-time job, driving a truck? They failed to realise, for example, how big a pension pot would be needed to keep up and maintain a place with a five horse stable! Brits would come to France, having sold their nondescript semi-detached for what was to them, mega-money and seek out the sort of space they had envied and lusted after back in Blighty: loads of land (Which has to be upkept), loads of dependance (Outbuildings): rip the house apart; tear up wonderful old tiled floor and relay with modern crap in the worst possible taste: a bathroom or three with all the business; new poseur kitchen; etc. And all to try and create the sort of place they had fantasised of owning on Nob Hill and become the envy of their chums and ex-neighbours back home! Then suddenly realise, they had spent most of their dough on this fantasy. Meanwhile, slowly and insidiously, local costs rose and rose (heating oil went from 30 centimes a litre to over One Euro at its peak), everything increased in price: and the Euro went from 1.60 to the pound to almost parity at its lowest. They also believed the French property market would be as Krusty Allslop maintained: buy a wreck: renovate and dramatically improve: and when you've spent three times the cost of the wreck, you simply toddle off to a friendly local Immobilier who sells it straight away for a vast sum to some gullible Dutch fool or another idiot Brit! (Note: French estate agent picture, after idiot Brit wannabe Krusty explains their dream.) Not one of them bothered to check the realities behind the French market: anymore than did they carry out any research before chasing their "Home in the Sun!" dream.

It was "In full swing", before NuLab came to power on May 2nd 1997. Thus presumably, we blame Ken Clarke? If you also look at the graph, then you will quickly see how the curve had risen before Blair came to power: however it straightened and would have probably gone vertical, had it not been for the so-called Credit Crunch and withdrawal of global interbank short-term funding and the collapse of the methodology of securitisation, MBSs, structured investment vehicles and etc.

Trust you did actually read and consider my first post in this thread and extrapolate the separate metrics of the B of E's monetary policy and the graph? The OP praised Harrison as an Economist: not as a fortune teller. In my many years involvement with economic analysis and forecasting, I've tended to rely on the basis of extrapolating trends and real events into future likely outcomes. Perhaps I therefore ought to have bought a crystal ball, a set of Tarot Cards and some chicken innards instead. Back in the mid 1970s, after the Heath-Barber economic debaclé (To which I have oft referred on this forum), the Economist published a tongue in cheek analysis, showing how since Roman times a Seven Year repeating cycle existed where building and property resulting therefrom boomed and dropped. Personally, I wouldn't put money on that bet!

Which is all most laudable. However Harrison couldn't know, in 1997 absolutely as fact, that George and the MPC would instigate a loose monetary policy which didn't actually occur until 2002-3: which would trip the insanity of the property price boom; anymore than he could know the FSA would prove wholly and totally incompetent in managing the monetary and fiscal affairs wrested from the B of E and ceded to FSA: (May 6th 1997) which with low interest rates and slack money fostered the insanity of turbocharged FRB, systemic dysfunction and explosive lending enabled by imported short-term cash from the global capital markets. Trouble with forecasting is one makes oneself an Hostage to Fortune: get it right and few if any remember: get it wrong and one's a fool.

Considering that Eddie George didn't commence his "Slack" money policy until between 2001 and 2003 - without which the resultant house price boom and consumer credit splurges would not have happened, then the guy is a necromancer, rather than an economist or economic forecaster. See here: It will be seen, that post mid-2001, the graph starts to bias towards vertical. See here: Base Rates: Range: 1996-2006: Thu, 03 Aug 2006 4.75 Thu, 04 Aug 2005 4.50 Thu, 05 Aug 2004 4.75 Thu, 10 Jun 2004 4.50 Thu, 06 May 2004 4.25 Thu, 05 Feb 2004 4.00 Thu, 06 Nov 2003 3.75 Thu, 10 Jul 2003 3.50 Thu, 06 Feb 2003 3.75 Thu, 08 Nov 2001 4.00 Thu, 04 Oct 2001 4.50 Tue, 18 Sep 2001 4.75 Thu, 02 Aug 2001 5.00 Thu, 10 May 2001 5.25 Thu, 05 Apr 2001 5.50 Thu, 08 Feb 2001 5.75 Thu, 10 Feb 2000 6.00 Thu, 13 Jan 2000 5.75 Thu, 04 Nov 1999 5.50 Wed, 08 Sep 1999 5.25 Thu, 10 Jun 1999 5.00 Thu, 08 Apr 1999 5.25 Thu, 04 Feb 1999 5.50 Thu, 07 Jan 1999 6.00 Thu, 10 Dec 1998 6.25 Thu, 05 Nov 1998 6.75 Thu, 08 Oct 1998 7.25 Thu, 04 Jun 1998 7.50 Thu, 06 Nov 1997 7.25 Thu, 07 Aug 1997 7.00 Thu, 10 Jul 1997 6.75 Fri, 06 Jun 1997 6.50 Tue, 06 May 1997 6.25 Wed, 30 Oct 1996 5.94 Thu, 06 Jun 1996 5.69

Sarah Brown's main error, is one of grammar and accuracy. Now, if she omitted the redundant "Was", then her comment might enjoy much greater veracity!

Well of course they cannot. Economists (Real Ones: of which they seem to suffer a dearth at the B of E and more particularly sitting on the MPC), understand the realities of Fiscal Drag: which means simply that any change in a government's tax strategies takes significant time to filter through the macro-system and be seen to effect anything very much. Additionally, "Inflation" is probably, one of the most abused words in the English lexicon. It became a convenient and handy excuse, in the late 1970s, for those who were perhaps running a major public body: and politicians. I well remember the muppet then presiding over Royal Mail in the early 80s, justifying price rises by the moronic (And unquestioned) answer to a BBC TV interviewer, of "In a word: inflation!" True real inflation relates only and purely to the co-relationship between Money Supply and GDP. Simply put: Too Much Money Chasing Too Few Goods = Inflation: whereas, Too Much Goods Chasing Too Little Money = Deflation. Unfortunately, since about 1970 "Inflation" has become a nice word for covering up a combination of ignorance and incompetence. If rising cost base creates inflation, per se, then the other essential rule of economics, Supply and Demand fails to apply. As does the much vaunted mantra of most Western politicians since Reagan and Thatcher: The Free Market. Since rising commodity prices do not inflation make, primarily, Mad Merve and his gang must carefully consider the real effects of QE and Fiscal Stimulus and the bank bailouts. With fools, charlatans and rogues in charge of the country, its major and critical organs, then is it really any wonder the country is in the dire current mess we experience?