[If You're Easily Shocked, Look Away]

So levering up 8 times to purchase an asset you expect to fall in value when the cost of the leverage can only go up is sensible? I think I should just have left this conversation when I referred the Hon Gent to my earlier comments.

Eight times is bs as should be obvious given the family income isn't going to be 25k at all.... I don't actually expect nominal falls either, I do expect falls in value but I can't be arsed to explain the difference to you as I suspect it will be way too much work....

[If You're Easily Shocked, Look Away]

The wife has just had twins. Unless Mary Poppins is going to come along and look after the kids for nothing, either she is getting a shedload of Maternity Pay or we can start factoring childcare into the magic budget.

Tax credit pays 80% of childcare costs if she goes back to work. ( if tax credits vanished childcare would just get cheaper ).

[If You're Easily Shocked, Look Away]

And you're a bear? If a bear sees borrowing 8 x income when IRs are at Disneyland all-time lows as sensible, I dread to even contemplate your finacial acumen when you turn bullish!

Sure I'm a bear. I'm not however blindly pessimistic in the way you are, I mean check your posts in this thread, you noted a wife and 2 kids to try and get your argument to work and laughably didn't adjust his income for them, he'd be getting a nice chunk of tax credit for a wife and 2 kids on a 25k income but you just ignored that, not to mention the possibility of her getting work to help out..... If you want to claim financial acumen you should make your fantasies a little more believable, so far you just look like a prize tool with your sloppy thinking and obvious emotional need to cling to a conclusion that doesnt really bear up to scrutiny.

I mean ffs you claim he has no wriggle room but there is a non working adult in the equation who will be getting benefits and might well be able to get work in a push ( assuming no maternity pay already ).

[If You're Easily Shocked, Look Away]

And if he has a real emergency, he's immediately fecked! Even without hols or i/o periods, he can't afford to carpet or furnish the big hoose. If his car needs tax / service / tyres, his wife and kids are on beans on toast for the month if they're lucky. Likewise if a tenant trashes the flat, either boiler goes, he crashes his car, his wife has to go into hospital or any other domestic emergency you care to mention. He is not even going to be able to save up a contingency fund to cover any of these all-too-likely exigencies.

Even without a real emergency, Let's say he takes an i/o holiday (on the residential element) for 2 months to cover a void. His income still doesn't cover his outgoings unless he starves his wife and kids and turns the heating off! It's not as if he's got the wiggle-room to build up a contingency fund when all's well (in his eyes). Never mind that there's only one direction for IRs to go and it ain't down!

He fails any stress test you care to apply.

Sure he'll struggle if he gets particularly unlucky, people always have. But a car for instance is hardly essential, boilers don't die particularly often and neither do people end up in hospital that regularly. He probably only needs to get through a few years before the mortgage is looking smaller. Most people are immediately fecked with real emergencies, that only makes him average. Ultimately if he were to end up a few months behind the lender likely wont repossess anyway so long as he can keep from getting further behind.

If he survives the early years he'll do ok. An STR on the other hand will be forced to gamble on one unstable asset or another or see his stash shrink in value by the day. There is danger for us all at the moment, those who do not act as well as those who do.

[If You're Easily Shocked, Look Away]

Exactly. Added to which, the estimates done so far have been on a £200K all-in residential mortgage. In actual fact, the BTL element for the flat will be more expensive.

HumanAction: Most mortgages allow limited hols or i/o periods. These would be something to keep in reserve in case of job-loss, ill-health etc. Not to set aside against exigencies like voids which will in all probability happen around every 2 years at least.

2/3rds of the debt is not going to be a business loan.....

You are the ones saying he'll have an emergency, I'm simply saying he has wriggle room in the short term ( and frankly all the risk is essentially short term given where inflation is going ). It's irrelevent that the wriggle room maybe isn't really intended to cover the problem he might actually have, it'll still be there when he needs it.

[If You're Easily Shocked, Look Away]

I refer the Honourable Gentleman to the remarks I made some moments ago:

Oh I agree it shouldn't be this way but like it or not it is and no one in govt or likely to be in govt is going to do much to change things.

[If You're Easily Shocked, Look Away]

If he has a 2 month void he'll have net income after mortgage of @ £393 pcm, 2 lots of CT to pay at @ £100 each property at least, so he's going to feed his family and all the rest on @ £193 pcm for those 2 months?

I'll wager he's up the creek before the year's out.

With new mortgages you can take holidays or make underpayments or just go IO for a while..... I don't think it's the best move he could make but if he keeps his job he wont get wiped out anytime soon and in the medium to long term inflation will ease the pressure on him. Real prices aren't going to hold up but nominal probably are.

[If You're Easily Shocked, Look Away]

TBH I don't see this as a massive risk on behalf of the buyer ( unemployment is the only real risk ). Nominal prices probably aren't going to fall and it's nominal price falls ( as opposed to real price falls ) that will wipe people out. Similarly the system could not take heavy IR rises so they simply wont happen, at least not without heavy preceeding inflation. Gov't is pretty obviously going to inflate at this point so property, whilst maybe not the best option, certainly looks better than cash.

[Qe - If It Resumes (As Seems Quite Likely) Then What ?]

I reckon something amounting to QE is very very likely. We need to 'lock-in' the recovery afterall and it would be 'irresponsible' to endanger the recovery blah blah.....

They wont endanger the inflation they are hellbent on generating.

[Is The Economy A Hoax?]

I agreed that we need to moderate our consumption of oil gas and food to approach a more self sustaining economy.

Given the oil gas and farming output we have, I think it is doable.

Indeed I have little doubt you think it's doable. But you ought to be clear and say outright that what you are saying is that the living conditions of the majority of the UK need to plummet even further than otherwise to save your rich friends.

That's because our oil consumption was very high at the time due to the war, and we were blockaded by u-boats, and many of the farmers were fighting in the war. Since then agriculture has become a lot more efficient.

Our oil consumption is way higher now, the blockades didnt actually stop food getting in either. Many farmers fought in the war for sure but others were moved to work on the farms in their place, they didnt go fallow. Agriculture will need to be way more efficient given our increased population and that many farmers have gone to the wall over the last 30 years or so.

Firstly you can't know how fast any crisis will come. Secondly, if it is coming we should act against it regardless of the likelihood of success. The nuke plants which are now shceduled are part of that reaction. Currency deval will force people to moderate consumption of external goods. Therefore currency deval is also part of the reaction/solution.

Anyone can see crisis is coming sooner rather than later, all the printing and excess borrowing of recent months hasnt even got us out of technical recession, at this point even Brown knows taxes are going up and spending will inevitably have to be cut if we are to avoid full on currency collapse. Once taxes go up and spending cuts start coming in we will start to see the stark reality of just how bad things actually are.

I would say for 5 years ot so. However it does need to be replaced by some more sustainable policies asap.

Then you are a delusional nutjob, these policies haven't even managed to give the illusion of growth and as our abilirt to borrow further declines they will be less, not more, effective. We have nowhere near 5 years, it's probably closer to 5 months than 5 years.

I don't consider that 'hell, lets collapse everything' is a sustainable policy unless you have a very clear view of what is to be done immediately post the collapse.

Unfortunately it's not a choice we get to avoid without consequences. Propping failed enterprises up at the expense of those that might otherwise generate some actual wealth is the opposite of sustainability itself yet on this board you are the champion of such madness.

As Dabhand has observed, ultimately our consumption was borrowed, the lenders now know we cant even pay for what we took already, the idea we can just keep borrowing insults both our and our creditors intelligences.

[Have House Prices Bottomed?]

Nominal prices have bottomed.

I wouldnt be that shocked if this is true. Real prices are going to go through the floor anyway though.

[Is The Economy A Hoax?]

Quite true.

But after a bit of "social unrest" people will soon realise that their survival depends upon cohesion (and has done since the dawn of time) and get on with it.

Day 1 of no food you complain

Day 2 of no food you steal

Day 3 of no food you get together with your mates and think "we need a long term plan here"

I agree, the end of the economy is not the end of humanity. We will adapt and move on ( or at least some will ). None of this is going to prop up the economy though and that was what we were talking about.

[Is The Economy A Hoax?]

This is defeatist nonsense. The UK has a lot more oil per capita than say france or germany, japan or the US.

Actually it's realism. We have some oil and gas but nowhere near enough to sustain our current consumption.

Likewise the efficiency of our arable land in per-hectare output is one of the highest in the world I believe. I think we are 60% self sufficient in food, and via a moderation of consumption per head and population we could be fine.

Dream on, we could not do it in WW2 with a far more cohesive society than now. At this point we have no chance of reaching self sufficiency any time fast enough to avoid serious economic crisis and deep social 'unrest'.

Also climate change will increase the UKs relative position in agricultural output.

Crisis is coming a little fast for that to make any difference.

We do need to make sure we get those new nuke plants, the severn barrage and so forth online asap though.

Again, start building them now and its already too late to save this economy. Crisis is on us already, the early tremors are here and the earthquake is on it's way.

I have to ask, just how long do you think QE and other such nonsense can actually hold reality at bay for? You are in for a nasty shock in the not too distant future.

[Is The Economy A Hoax?]

The UK is more than capable of being self-sufficient food wise. As for energy....just start digging up coal again. That and horses.

We'll never get the food or energy on line fast enough to save us. There is a bit more to coal mining than just deciding to dig and we are well short of food self sufficiency at the moment.

[Jupiter Raises Fears About Weimar Republic Wheelbarrow Money]

tedious.

Do you have a B side?

He was on the money and quite amusing with it.

[Is The Economy A Hoax?]

The economy is a vast food-n-oil powered make work enterprise.

Yep..... Tiny problem is that we cant afford to import the food and oil we are gonna need to keep it going.

[The Socialists and Crony Capitalists Have Removed The Incentive To Work]

Kind of supports Injin's hypothesis that most people are good. Which is right.

That is right. It's a shame we cant get Injin to realise that some portion of the population are not good and never will be good though, some are pychopaths and sociopaths who are simply bad by nature. This means his ideas are not and never will be viable for humanity. Oddly I seem to recall that sociopathy is a fairly common trait amongst successful businessmen, I'm not sure that we should therefore let them have complete freedom to act as they desire.

[Say Goodbye To More Jobs]

'The left' is mostly composed of stupid people and the psychopaths who exploit them.

Look, it's very simple: the West became rich and powerful because it led the world in technology and business for centuries. Over the last hundred years the left (and particularly its luddite subset) has deliberately destroyed the culture that allowed the West to lead the world in technology and business, and now whines that the wealth is disappearing as the rest of the world catches up and surpasses them.

Go ahead and keep demanding higher wages for jobs that Chinese people will do for $0.50 an hour; but you'll end up being beaten to death in a fight over cat food.

Read some history, we got wealthy largely by imperial aggression and slavery. Where do you think the capital that funded the industrial revolution actually came from?

By the way your proclamation of what happens if we dont all bow down and worship you is no threat at all because you'd have us fighting over cat food if you had your way anyway.

[Say Goodbye To More Jobs]

Which will only happen if Westerners stop whining about life being so unfair and start doing something that's worth a decent amount of money.

We agree on that point. We cant all sell each other houses and financial products and expect anything but impoverishment.

Otherwise you'll be fighting in the streets over rusting tins of cat food while the Chinese are making tons of cash doing those things that Westerners could have been doing if they weren't so pampered and scared of change.

Dunno if that's a slip on your part but you'll be out there fighting too if someone like me ends up there.

Bioetch is going to be one of the biggest growth industries of the next few decades, for example, but any company setting up in Britain would be buried under mountains of paperwork and regulation thanks to the luddites who think that technology just appears out of thin air; no-one in their right mind would even think of doing so.

I think the current reaction of what is called 'the left' is a fairly predictable reaction against the actions of capitalists. There is little point whining about luddites when if they dont fight you'll happily leave them to starve. Of course they will oppose you, they'd be idiots not to. They are behaving quite rationally given you basically wanyt them to starve so you can have a nice life. If you try and take the lot as far as wealth goes you should probably expect some resistance, if you dont realise that then its you that is thick.

[Say Goodbye To More Jobs]

I'm all for a more equitable distribution of wealth.

I'm not sure you understand the word though.

It means fair. So a more equitable distribution of wealth would be more for the people who earned it and less for the scroungers. Unless you don't understand the word fair either.

Equal is a different word, commie.

I think you demonstrate a lack of understanding also, you can cut taxes ( and I'm in favour of that too ) but you'll then need to call a halt to the trend that is seeing capitalists trouser all the benefits of efficiency also. If you dont do so the wealth concentrates and the economy simply dies. Trickle down doesnt work and only dimwits still think it does.

If the wealth were spread around all those who create it we would see a decent number of people who could and would spend into the economy thus creating further opportunities. The solution is to pay those in work decently and allow their spending to generate extra activity and jobs. Of course automation and the sheer greed of capitalists and landowners play directly against this solution which is why you see people starting to contemplate ideas like paying people not to work through forced redistribution schemes.

Personally I think we are going to hell, some are going to starve and others are going to be hung from lamp-posts. When the dust settles I hope we see something better emerge.

[Economists Expect Bank Of England To Extend Qe Next Week]

That simple is it? Define the ability to inflate, and how it leads to war, and how lack of the ability to inflate prevents war.

Time for an injin history lesson.

I dont think you need Injin for this, take a look at the history of the bond market to establish the link between borrowing and war. You then only really need an appreciation of the role of credit in expanding the money supply to realise that he is essentially correct, no credit leads to no war ( or at least greatly reduced war ). It makes a kind of sense really, I mean who in their right mind spends their limited wealth on destroying others rather than in enriching themselves?

[Trade Unions Call For Minimum Wage To Rise By 20P]

They can't change contracts without there being legal redress. Most contracts are not much use - they certainly aren't in any commercial relationship where you want longevity - not because the law gets overlooked but because they are usually fairly weak. However, if a contract says you can't do this or that, then you can't.

It's a brave man who sues an employer, if you lose you are done as far as employment goes, a bad reference will see to that.

The key to better rewards is to put yourself in a better position, or don't work for these guys.

I really do agree with this, that said I think the first option only really works for a minority of us, it's the second option that really could have power if people realised that maybe they can put capital to work for them rather than being put to work by capital.

[Trade Unions Call For Minimum Wage To Rise By 20P]

I'd love to shop at our local Co-Op rather than the big 5, but it's much more expensive.

We dont live in a free market. Currently prices for foods are heavily distorted by EU subsidies and other crony practices, often paid out to processors and even big supermarkets as well as farmers. You dont pay what you pay at Tesco purely because of free market capitalism. The Co-Op tries to rebalance this 'ethically' and that inevitably increases their prices. It's not a picture of what the market would look like if left to itself.

As I noted earlier on, worker owned firms tend to have higher profits than other firms and also survive longer. If they had a real problem getting custom this would not be the case.

[Trade Unions Call For Minimum Wage To Rise By 20P]

No problem, it's a forum and an argumentative one at that.

We've clashed in the past. It probably colours my reading of you sometimes.

I'm all for it but don't think necessarily that "driving forces" want to work for anyone. I certainly don't and am basically unemployable as I can't take instruction without losing all interest in what I'm doing (and becoming useless). That's one of the main reasons I do what I do.

You wouldn't be working for anyone else, you'd be working with them. Subordination is stressful, I suspect most would avoid it if they believed they could.

There's also the bsuiness of property rights and free choice. You respect property rights (worker "ownership") and free choice to form associations as we wish, I guess.

The right result is for the different models to go at it toe to toe, and may the better solution win. All for that, 100%.

I agree, for now we have a common enemy in statism/crony capitalism ( or whatever name you prefer for it ). I'm happy to see where things go if we ever get to a point where we all have the ability to make meaningfully free choices. I'm confident that once people understand what worker ownership actually implies they'd choose that over traditional employment ( both as working people and as customers ), as long as they have the option ( in a less limited sense than currently ) I'd be quite content.

[Trade Unions Call For Minimum Wage To Rise By 20P]

You've incorrectly put your hostility hat on. Like I say, I'd be happy if it worked because anything that's more profitable and better means more wealth is being created and people don't need to be in thrall to the state. Such firms if widespread would lead to lower taxes, a shrunken state and less parasites. My dream ticket.

EDIT: What % of Gore shares are owned outside the Gore family?

I do think your idea about original firms failing if workers set up in opposition completely ignores the value of the driving force in a company, but since I'm the head of a private firm my experience is of that form of company. Think Virgin without Branson, git though he is. I don't have as much respect for public companies on the whole.

Sorry if I misread you as hostile. For the record I think that 'the driving force', should indeed be rewarded. It's just that I think the driving force is probably something that is not fixed in many companies and is often massively overestimated. Where a single individual really is a powerful driver I'd expect a worker owned firm would reward them very well indeed, you want them on your team afterall, it's just that the reward would now recognise contribution and value rather than being a simple right of ownership for the holder of capital. My view is that the aim should be to set talent free to generate wealth that all who contribute in the wealth generation can take a share in.