Tired of Waiting

I am in a high risk position, as all my savings, 100% of it, are in sterling. If it collapses, I will lose a lot. I should have some protection against it - some "hedge", as in "protection" against a risk.

But imagine how much would cost, in London, a house like that: "detached, garden, 3 bedrooms, close to convenient subway stations". It would be millions of pounds. Anyway, I found this data interesting. From the The Economist, Global House Prices 1997-2007 Britain and Ireland had the biggest bubble, by far.

Global House Prices 1997-2007 Source: The Economist Britain and Ireland had the biggest bubble, by far.

People in ALL countries, including Japan, consider the home the most important thing for their families. And it is the most valuable family possession also. You presented no sensible argument there.

PB is brilliant. It is a pity it doesn't work with primelocation though. Their MAP search function is very useful.

I thought so. Thanks for the clarification.

I see. So spread-betting companies are not just intermediates, between 2 opposite positions, like the Futures Exchanges. << If you really are simply spreading the risk ?>> That is the main idea. Though if I could figure out positions that woulg go UP I would not dislike it. << You would have done this before. >> I SHOULD have done it before. I fully agree. Just inertia, I suppose. << trying to do it today are just gambling. >> I Agree, but: <<The risk of holding 100% in Sterling is that the currency completely collapses>> Exactly. We are gambling either way. <<and by itself, not along with many others.>> Exactly. The risk of global inflation. In these cases, the classic protection are equities and commodities. BUT if this global inflation coincides with global recession, then equities and commodities will go down as well. But, it is not possible that everything go down together, as we need a reference point. After all, we use currencies to buy equities and commodities. If they all fall together, ... then they don't fall! If you know what I mean... ( God, these are weird times. ) Anyway, what we must foresee is what will fall most. And from what I know of macroeconomics, I am sorry, but I think Britain is the worst basket case in this crisis, as we had the highest bubble, and we are the most dependent country in the world on financial services. Sorry. We are doomed. Hence, sterling is doomed. Foreigners don't know it yet. "The markets" just follow indicators, after they happen, and after the data is gathered and published (3 months later). Our fundamentals are all shot. The markets don't know acbout our education system, our infrastructure, much less about ours chavs and shameless. I don't know when sterling will fall, but I would guess in less than 6 months. Then the new conservative government may reassure the markets, for a year (?), but in the next years we will go down to the level we deserve. And it is low. <<If I put a quarter of my cash in another currency and that collapsed?>> I'm thinking about puting 50% in foreign currencies. Lets say 20% Euros, 20% Yen, and some other (Canadian $?). <<And no - I don't think gold is the way out either.>> Agree. Yep, no easy way out.

Fair point re precarious system. Thanks. I'll research more, and will take a look at tradefair. Thanks. "virtually everyone who spread bets loses..." How come? If someone loses, won't someone else win?

Agreed. And it was a Labour government that started this planning malarkey. But now, here in the south-east, it is the property owners that scream objections against any planning application. The dirty Bast***s! They even prefer to leave a whole field of 1 acre for a single cow, than to allow houses for 15 families in it! And they still think themselves as "good people"! (How much mental contortionism do you need to manage that?!)

I have visited reasonably good timber framed houses in America. And I've seen excellent modern houses (not bricks) in Scandinavia, Netherlands and Germany. MUCH better than ours. If we think about it, bricks are just mud. In Britain we still use Neanderthal technology to build houses!

Not bad at all! Here in Britain both would be more expensive. Land without planning permit is very cheap, at about £10,000 per acre, in the "provinces", around cities. But with planning it goes up to a million or more, depending on location. A individual plot for a family home would cost from 150-200k. And to build a detached family home (no luxuries, 4 bed, 2 baths) would cost from 80 to 100k. Note that the main cost is not a "real" thing, but the PERMISSION from the local authority!

The riskier thing to do when investing is to put all your eggs in one basket. We all know that. You are playing the game already. If you keep 100% in sterling, you are betting on sterling - and with all your eggs.

Bosworth, thanks for the useful info there. But I have a question: If we think that sterling will fall in relation to the Euro, and probably even more in relation to the Yen, then why not just take positions against the pound, in "forex"(?), "spread betting"(?), etc. It would save in commissions. And allow leverage, hence allowing more diversification - for safety. I'd like to try that. But I have to learn the practicalities of it. By any chance, do you know how it works? Best traders that deal with it, etc.?

Fixed!? For 20 years!? And at only 2%!? It does boggle the mind. A long term fixed here, 10 years would be above 6%/y, and with a large deposit. Housing is the main cost of living for most families. Hence, when housing gets cheaper, quality of life improves. This is so simple, self-evident! Everybody knows that, in every other country in the world that is, BUT in Britain. Here, somehow, the majority of the population, and the media, treats increases in housing costs as GOOD news! And reductions as BAD news! How BONKERS is that?! (Sorry, deviating from this thread's topic - and me the OP! I just couldn't resist. Sorry.)

Just research how Germany does it. They have very stable and very cheap housing. I don't know how they do it though. Sorry.

I have invested in gold in the past. But I think gold is too expensive now. In phases of collective panic gold always over-shoots. Anyway, I prefer not to lose focus on this thread's topic, if possible, please. I appreciate the advise, but the point in this thread is to discuss the practicalities of currencies speculation, the best tools for it. Cheers.

They are identical for the firs few years. Is that what you meant?

The danger is the decision process: political-economy. Governments are forced to do what the (average) voter wants. Brown will do his up-most to prop the economy up before the election, regardless of cost. He can afford it, as it is only 6 months. But what will Cameron do? I don't have the numbers, the "econometrics" of it. I mean, if it will be possible to correct hard and fast, and start a recovery BEFORE the following election, then he will do it. But I'm not sure it is possible. If he tries a hard correction, and it lasts for 5 years or more, then he will lose the following election.

The chart shows the national average. It is quite possible, normal that individual neighbourhoods will have variations around that average.

We've been thinking the same here. Serious.

I hope so. I mean, I don't "hope" for the pain part, but as the correction is unavoidable, the sooner the cheaper. The only possible positive side for the government to try to soften our landing would be to avoid Lloyds and RBS going bust. (And in this case, this current property buyers, with large deposits, are doing the nation a favour - even if it is more Social Darwinism in action than charity). BUT, if prices are going up, then the gov. got the dose wrong. We are having over-dose.

Japan - Houses and Land prices falling for 17 years, since 1992, to the present. (And are still falling.) Could it happen here? Why not? Note that the argument "but Britain is a small crowded island" won't work this time, as Japan is also an island, and even more crowded - with a higher population density. Charts: Japan, prices of land and housing falling for 17 year, 1992-present. Source: http://www.globalpropertyguide.com/real-es...-house-prices/J Note that the left-hand charts shows prices CHANGES, not prices LEVELS. Left-hand charts shows prices CHANGES, not prices LEVELS.

Good signature Confounded. It deserves more publicity: Japan: Prices of land and housing falling for 17 year, since 1992, to the present. (Note: Japan has a population density higher than Britain.)

So they think "they" are putting 8% of salary into their pension fund?! I bet they think they pay tax as well! Let me see if I understand it: Our tax-money pays 100% of their salaries, then they send back some 30% as "tax", and 8% to their pension. Isn't it exactly the same as if they just get some 62% of their current salary, and we put some 8% into their pension pot? At least they would not have the illusion that it is them that are puting money in their pension pots, or paying any tax.

And it is a LABOUR government doing this, working desperately hard to keep housing costs HIGH ! One could not invent it. The real reason behind it is that if housing prices keep falling, the banks will get into even worse position, and some (Lloyds and RBS) may get unbearably heavy for the treasury to hold. They are still trying to buck the market, but they may fail. Or inflate.