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MrB@work

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About MrB@work

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  1. I don't think you're right in what you say. Banks lend multiples of their reserves. Thus £1 of reserves may actually mean £10 of lending. You are right in that every debtor has an equal and opposite creditor. It's just that banks can create the money to lend from nothing, depending on their reserves. A bit like a giant inverted pyramid of debt on top of their reserves. I think that sums it up better than I can. The 'too much savings' idea is obviously a fallacy, as those reserves enable loans to be made.
  2. This is total ****, and really irritating to read, as it's so wide of the mark. There is a blantant fallacy in her article, and your analysis, in that you assume that everything was fine until 1929/30 when the problem suddenly occured out of nowhere. There is nothing (other than govt intervention) to stop the factors of production falling on a gold standard. To completely ignore the inflation of money supply by the Fed during the 1920's (despite the Gold Standard) is totally ignorant, the consequences of this inflation and the malinvestments and distortions that it created became evident in 1929. The supply of money increased by about 65% between 1921 and 1929. THIS COULD'T HAVE HAPPENED ON A 100% GOLD STANDARD The problem was the inflation, yet as always, people focus on the symptoms and not the cause. AS Rothbard says of entrepreneurs: Who put the 'Great' into the Great Depression? The Fed Government intervention (The AAA , NRA, FFB, Unions) all government attempts to prop up proces/wages/production (including loans below market rates to favoured groups, farmers especially) protectionist tariffs maintaining unsound positions Stephanie Flanders is very conceited in this simple and trite analysis. Ask yourself this question: A genuine gold standard existed for c 100 years before WWI, why then had all previous depressions cured themselves (on a gold standard) within a year or 2? Read this for more info
  3. Yup, I was thinking that too. If you took away the name "Thatcher" and replaced it with a Schiff/Mish/Roubini or any other econo blogger, and put these comments on a contempory blog, we would have nodded in agreement. Thatcher invokes feelings in people. Read what she says. THE STATE CAN'T CREATE JOBS. It can only appropriate wealth from productive parts of the economy and reallocate it (usually badly an inefficiently, aka malinvestment)
  4. With regard to the wages issue: What this comment suggests is that Brisish wages need to be high to pay high taxes and housing costs. My spin on this is almost the opposite, British workers should be able to compete for lower paid jobs, the only thing stopping them is high tax/housing. I.e. housing costs and taxes need to be lowered to enable Bristish workers to compete. The problem is high living costs, not 'high' wages.
  5. Yep I've read Galbraith's book, I've also read Rothbard's America's Great Depression which is 100x better. In fact I'll do an eric pebble Read Rothbard's America's Great Depression for FREE here Galbraith's is a simple narrative , X happened then Y happend then Z happen etc.... He gives 5 cursory reasons why the greatrest depression in history occurred on about 2 pages. Not worth so much IMHO. He totaly ignores government intervention, and fiat credit expansion of the 1920's, the price/wage/production setting of Government, the lurch towards collectivism and socalism after WWII. He chooses to completely disregard low interest rates (below free market rates) glibly saying that low interest rates are irrelevent as people don't Have to borrow. I could go on, but you get the picture.......
  6. You're probably talking sense, I might be missing the point. Here's an example of what I'm talking about (in an highly inflationary environment: Buy £200k house with 10% deposit of £20k 1 year after inflation of 20% house is worth £240k Your £20k has increased by £40k to £60k Total increase 200% (less the cost of borrowing) I guess I'm saying that 200% increase couldn't be beaten by buying investment grade debt.
  7. I've no idea wtf you're talking about, I can only assume it makes sense. I agree with Moose, debt + leverage + inflation combined together mean you really do gain by having debt in an inflationary environment. Debt + deleverage + deflation sucks though (for those in the above position), savers win out in that envirnment.
  8. Theoretically, you don't NEED separate rooms for things. GB could hit his housing density target if all new flats/house had 1 room, for sleeping/eating/cooking/pooing/bathing
  9. I agree with the OP, there is no doubt an agenda. I wouldn't correlate 'educating yourself' with opening gold/dollar/euro accounts. Looking at your date of registration to this site, you are making a very rapid and hysterical decision to short sterling. You are not educating yourself, you are panicking, and no doubt the pro's will be making money at your expense.
  10. What will it take for you to accept that deflation is here, it's been here for 9+ months in monetary terms, and will be around for a little while yet. Maybe a whack from a giant sledge hammer with D E F L A T I O N writen on it would sort things out. True money (not M3 pls don't link twatty m3 graphs) /credit - contracting Oil/Commodities down 60-70% (in $) Stocks down 40-50% Property down 20% Land down 30% Salaries being reduced to keep people in the job Defaults and devleverage everywhere you look UNEMPLOYMENT soaring Paying down debt - now popular Saving - even more popular Leverage - reduced Capacity to borrow more - down (saturated in debt already) Company Earning- reduced, and will be reducing mopre next year Overcapaicty and malinvestment everywhere Just accept it and move on.......
  11. Are you not disturbed by the fact that you are able to buy a house at "roughly a 1997-99 price", and if you valued your own stock at those levels would you still be solvent? I've noted a few comments from people who bought in 2005-2007 but 'not at 2007 prices'. E.g. I bought in 2007, but at 200 price :/ On face value you seem better off than most LLs, but I don't buy into teh miracle LL's who always seem to be able to buy at magical lows, even in the boom years.
  12. Good luck refinancing their mortgages when the rollover. balance sheet damage will outweigh any rental profit.
  13. Mmm I have noted a bit of bullish sentiment, on here and IRL - so I'm not dismissing it out of hand. I think the ultra-low Tracker IR's have improved confidence, maybe another tranche will be suckered in to today's 'bargains'. Remember 2004/5 seemed a nailed on certaintly for collapse. This taught me a valuable lesson: Never underestimate the retardation of the British Public Can't see a bottom on housing for years tho.
  14. If he's putting money into cars, where's he taking it from? D'oh.
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