Winston Wolf
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Posts posted by Winston Wolf
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Your guess is as good as mine when it comes to anticipating what hare-brained ideas will emerge... However... I can comment about bubbles:
In the context of an economic bubble, the bubble will inflate for as long as the market expects prices to rise in the future by, at least, the risk-free return on other investment (savings accounts, say.) The moment that the expected increase in future prices falls below the return on savings... there'll be a crash. Apparently slow, controlled price reductions are only possible in a fundamentally illiquid market... in a liquid market, bubbles collapse very quickly. They don't re-inflate and assets that have suffered a bubble and its subsequent collapse often remain under-valued for years if not decades as investors become sensitised to the risks.
At anything like even today's price levels, there are only two options: prices collapse (only slowed by a market illiquidity); prices rise significantly quickly. The more over-valued the asset... the more rapidly prices need to rise to sustain the bubble... because more rational objections need to be overcome by expectation founded in empiric observation.
Savings (cash) are doing anything for people now and debtors have more money as interest rates are low.
Maybe, just maybe if the market show minimal signs of turning the corner there might be a bit of a rush to buy.
Maybe, just maybe the stock market shows signs of a recovery there maybe a rush to buy there to after all what else are you going to do with youre savings?
And then the whole market's expectations change in a large way from small acorns.
I believe, and I know I will be shot down, that we are at the point of another mini bull run, how long, how far I do not know. But im now in the FTSE large, long and aggressively and my biggest holdings are Barrats / Persimon and Redrow.
There ive said it.
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You'll find that the savers have outwitted you at every turn.
Every lever you can think of to pull will be perfectly hedged; what will instead happen will be further demand destruction.
If I put my savings in the stock market (bubble inflates) and make some money im buying a better house (bubble inflates). OK, I will be much more aware of any debt granted. This is about getting the ponzi scheme going again.
Sometime the rights and wrongs dont matter, the right does not always win out.
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This is what is being done.
It cancels out debt and savings and puts everyone back to square one.
Fine if you have debts but not so good for people with wealth. Asset prices would tend to go up but not as much as expected because as people lose their savings there will be less demand.
We know what will happened because we can look at Zimbabwe which was ahead of the curve on economic policy.
One thing which traditionally retains value is a useless yellow metal which we dare not mention.
Maybe that yellow thing has tried to become real currency and is going to fail. If it becomes real then its game over for the west. I wonder if this isnt half time with that yellow thing that shall not be mentioned 3 nil up and fiat could get a couple of goals back in the second half. I think money may now move from the team playing in yellowish shirts to the teams playing in green and white. Governments are obviously powerful, can market forces stop them proping up fiat?
My money is on governments, no or little up rising to any of whats happend in the uk and little around the world.
If they can re inflate the problems gone away for another day...
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At what point will the whole concept of 'money' as a store of wealth become futile? I do not know the answer to that - all I know is that at some point people will just give up on it - they will choose not to store their wealth in it. At that point it simply becomes paper.
The danger is that no one knows when that point will be - for example if people find that their savings purchasing power had been reduced by 50% as a result of this 'easing' then I suggest that they will be less inclined to save money, or to make provisions for their pensions in money or to invest for money. The process has probably already started. I for one will no longer put my faith in fiat.
My point is you wont put youre faith in it... so what, by the very fact that you are on this site you are likely to have more intelligence and freedom of thought than sheeple. No, im talking about sheeple, I suggest at 20% they wont really see it.
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Because the problem is defined by surplus capacity.
We geared up to meet demand levels that don't exist and won't for a century or more.
Creating more of anything (except young, able-bodied, unencumbered, and economically active people) isn't the right answer.
We need more houses to be built do we not? Some people would like nicer cars? etc etc.
I agree with what you say and agree capacity was too large but if they create another mini boom some but not all of the slack can be taken up. What other alternative do they have, that what im saying.
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It depends what the government does with this 'newly printed' (eeugh, I hate that phrase) money. If it lends it to banks to finance their existing loan-books, then it should address the crisis - but it won't affect the economic catastrophe.
If the government spends (wastes) the money it establishes - then this will advantage debtors, but disadvantage savers... and this form of intervention will weaken everyone's confidence even further than it is weakened at present. This might reduce the average debt levels in nominal terms, but the economic damage that would come hand-in-hand would offset that advantage.
I guess what I'm saying is that there is no quick fix. We need to recognise the stupidity that arose through an over-availability of credit and deal with this... a necessarily painful experience for the deceived.
Absolutely agree there is no quick fix. If the fix was quick the whole fabric of things could break down. What im saying is the answer is to re inflate the bubble, just not quite so big, then gradually let it deflate after learning the lessons of this bubble. Have they got it? is this what they are trying to do? Have I got it?
I see another mini boom, then another bust. Of course this assumes they can control things with their new found knowledge.
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Because if it done blatantly then why would anyone bother to work for 'fiat'?
You are talking about pensioners losing, savers losing, wage earners who do no have a good negoiaing position losing.
In fact anyone who currently has faith in fiat currencies may well decide that its just not worth keeping or trading in cash for fear that they might once again resort to devaluing your store of wealth.
Globally you would have a return to the middle ages.
Doesnt that depend on how much it was done? Would what you say occur at 10% 20% 50%
Would people notice at 10% Would sheeple understand what happend at 20% or just accept it and be glad they still have the same a mount of Fiat in their pensions. It's about controlling the sheeple not people on here who are not.
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tangibles, I assume.
Maybe I got the title wrong, sorry,
I mean each government prints more money so that more money gets into every economy?
Wont this kick start lending, push up asset prices, get us back on the same merry go round?
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Why wont global currency devaluation work? This is assuming hyperinflation doesnt happen BTW.
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Arent all of the experts saying sell?
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They will just print more money. Right or wrong thats what will happen.
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Hi,
I have an idea, I might be completely wrong and look like an idiot, but I'd rather do that on here than in an IFA's office.
I was lucky enough to start my first job just before the last crash, it was the same then, buy property, excess wealth and so on, it soon fell apart as we all know, but that was my first real world lesson on economics.
Then came the endowment shortfall fiasco.
As a result I have always been wary of debt and property, so 2 years ago when we moved areas suffering deja vu we decided to rent instead of buying.
Good move yes, but was only ever temporary, with a family, work and so on it has always been our intention to buy again when things were affordable, after living here for over 2 years we are in love with the place and know we want to stay.
My feelings are that this year will see the biggest falls, since the crash started the market's dropped 20% give or take and thats with most people still either oblivious or in denial, now everyone knows IMO its going to speed up.
I think we will then see small drops over the next few years and drops in value as house prices stay as they are, maybe picking up again in 5 years or so.
But to get to the point, should that pan out as predicted, we intend to buy in around a years time, so we are working and saving like loonies to get as big a deposit together as we can and here is where my question is.
Discussing where to put our savings, Banks? Interest rates dire ATM but nothing is for ever and could go up, but deflation? safety?
Premium bonds? only ever held a few due to low yields but with rates as they are might as well take a gamble? seem to be safe, if we dont win well IR's so low not really missing out, and best of all tax free if we do.
Please dont say Gold, I wouldnt know where to start and not brave enough to get involved with something I know nothing about, I'll leave that to the big boys.
OR...
As we always work out mortgage our on a repayment basis (not trusting the endowment thing) but everyone we speak to seems to have an interest only mortgage with no reayment method in place (why?) I was thinking.
Repayment vehicles as I seem to think they're refered to are now stocks and shares ISA's yes?
If I were to take out an ISA now for say 100k (by that I mean to pay off a 100k mortgage in 25 years time) I could have paid a year off by the time we buy, or more even.
If we never buy then we have a nest egg, if we do we will be starting again with a 25yr mortgage so we are in effect paying of at least part of that starting now.
I know stocks are at an all time low but isnt that a good thing then to buy now? One assumes in 25 years they will have gone up
When we come to buy we can perhaps go for a part IO part repayment mortgage, or an IO that we can overpay and set our payments a bit higher, thus paying some down if the ISA doesnt work out, but keeping payments lower.
What do you think? Am I a genius or an idiot?
Please be nice!
On Interest only mortgages you can ousually overpay each month a certain amount, making it in effect a flexible repayment mortgage. The governments only strategy is through devaluation and inflation so money in the bank isnt neccesarily good and if inflation kicks in your mortgage interest rate is going to go up, mortgages will never get cheaper than they are now so you got that to consider. If I had a STR fund I would be starting to get a little twitchy, I dont think I could hold out another year myself, six months max. The stock market is low but of course it can go lower most on here will say both house prices and the stock market are going to oblivion and you have to take into account where you are aka HPC. If I were you I would put the minimum down on a house within the next three months, put the rest in the stock market and then overpay on youre fixed rate I/O mortgage as surely fixed rates cant get any better than they are now.
I am not sure many will agree with me but there you go it just what id do. I downsized in 2005. Cash in the bank isnt good in an inflationary environment.
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woah. the £s getting a global beatdown.
If the pound is tanking doesnt that make companies in the FTSE cheaper of foreign investors?
Wont that help prop up the FTSE.... or am I being stupid (again)
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Which public sector workers think this? Any specific group? When all's said and done, the private sector caused the current crisis - in particular the banks and property developers.
I agree with the above post. The government needs to invest in and expand the public sector - but only in projects that are of real benefit to the population. Any big rescues should be in the form of full or partial natinalisation.
The only answer they have is to cause inflation to get them out of this mess and they will keep printing.
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The market could easily rally, and I think it will. It always rallies somewhere in a bear market even if then it makes new lows. This could even be the bottom but I wouldnt go that far. Best not to be short now.
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We need fewer people, not more houses.
I propose a cull. Lets start with Estate Agents, Bankers, Gordon Brown, Hazel Blears, and then move on to the wider New Labour membership.
That would solve so many problems it's difficult to know where to begin in terms of a justification
Please could you cull the people who mend the roads or at least half of them as most of the time they stand around doing chuff all
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Especially in Labour seats,vote Libdem.
Im going too, my theory is what have we got to lose?
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He didn't cause all this, yet he can't sleep with worry........Yet Gordon CAN & DOES Sleep......
http://www.telegraph.co.uk/news/worldnews/...rdon-Brown.html
Mike
Gordon is asleep 24/7
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I know it wont go down very well and this isnt a gloomy topic but it's gonna bounce I tell you, well at least for now.
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The question isnt why others should pay. The question should be why is it so unaffordable for the lower paid of our citizens to have children on a salary basis alone?
Yes I do agree with youre sentiment here, this is where greed needs to be tackled
Consider that 30 years ago these individuals didn't need tax credits and didn't need to have the other half (wife) work to be able to make ends meet.I am not sure on this, I think they just made do?, no shoes and all that
I dont know the exact numbers, but if we got rid of tax credits and child benefits, what percentage of the lower paid would be unable to afford to have children? 10% of uk citizens?? 20%?? possibly more??I still counter this with having credits for ONE child and that too would be means tested.
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It's not a very good point though. Reproduction is probably about the most fundamental human urge there is. People will want, and have, families whatever you or I tell them to do. So it's just a question of are those families going to grow up dirt poor or they going to have a reasonable living? And the idea that somebody working full time is not able to earn enough to support a family of their own is frankly absurd.
In an ideal world people would be able to pay for their own kids, but unfortunately we live in a country were the electorate keeps voting in governments that are determined to compete in a race to the bottom in terms of pay and conditions because "it's the free market, innit?" So what else are we going to do? Tell the working poor that that they better keep their flies zipped and be prepared to grow old alone, because only the middle classes can have kids now?
We make it clear, we will help support ONE because that is fair and decent but more than one thats youre choice you live with it.
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My Grandad fought the Germans for freedom, what have i got now?
I am a slave to the Greedy and to the Lazy and Ignorant.
The majority are slaves to the minority.
Thank you LABOUR
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So they have someone to clean their bogs, wipe their **** when they're old and demented, sweep the pavement, serve them a burger, etc., etc. Or is comfortably-afforded Tarquin Rashley-Belcher going to do it for you?
Idle criminal chavs shouldn't be encouraged to spawn but ordinary low-waged people need support.
ordinary low-waged people need support yes i have no problem with that
Why Wont Global Currency Devaluation Work In Sorting Out This Crisis?
in House prices and the economy
Posted
Gordon and Darling are working on this. You know what, youve got me thinking, in this day and age of technology maybe it can already be done. If you could you would just keep it quite and sell some whenever you needed to and when you sold it you wouldnt have to worry about the price you sold it for either....... er hang on a minute...