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plummet expert

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  1. Prechter is interesting. His thesis on deflation may be right and I am sure he is right about a forthcoming collapse, which he has been touting for months. But you'll find many respected economists who firmly believe the crisis will play out as hyperinflation and depression or stagflation, due to the simply vast injection of printed money supply in the USA and other places including the UK. When you find that the money supply has increased by 4 fold in two years but inflation is still at bay, you have to wonder how that happened. The forces holding it back are only just beneath the surface and the dam will break. In the UK the real inflation measure - the RPI is at 4.4% as of April and rising when they said it would fall. The talking heads said house prices would rise, but April shows the fall has begun. In fact the Land Registry shows it was happening from Feb really. The supply of 'for sale' homes has shot up dramatically. It is many times the previous number and monthly adding at the rate of 3 x the number being sold, so inventory and rising interest rates, cuts and unemployment, confidence and a return to recession by next year which will make sure. HPC fans will at last see the real correction, but with a lot of pain to come. BTL will shrink dramatically in a fire sale over the next 2-3 years. By 2016 we will see rising prices again. Homes will be 2.5 x income for the first time since 1995. Whichever way it plays out, be it depression or inflation or a combination, your wealth will not easily survive or thrive sitting in treasuries except for a very short time indeed. In Greece, they have been sold off at 60% face value recently. So I don't favour this course. Hard assets, such as Gold, Silver and Platinum will do best. Agriculture is also currently woefully undervalued. GOLD may already be showing signs of 'detachment' from the stockmarkets. Most often it has risen and fallen in tandem, but lately there have been good rises when the market tripped. EG Gold went up $34 in a day when the Dow fell. It has fiddled with a correctiona couple of months ago, but its bottom is the old top of about $1000. Peter Schiff is another one to watch. He fortells the price of gold being equal to the Dow when the collapse comes. Something like $3-5000 per ounce. Silver will do considerably better. Get and hold the physical stuff or use the company GoldMoney.com who are kosher.
  2. Mr World Govts woke this morning with a start. 'What's happened? ' he said, all hot and bothered. Mr Market frowned. 'you're on another wind-up. I can tell,' he announced knowingly. Mr World Govts didn't need to know any more. 'Goodness me, ' he grunted. 'I forgot to turn on the money printers last night. OOOOOps!!! Well, I'll put them on double load today. That should do it. Mr Bnanker knows just what to do to calm the loudest market cough,' he said as he fell back to his pillow in time for the next dream.
  3. I hear the sound of the paper over the Euro financial crack tearing. .....But wait....what's this? More glue, more paper money on the way. They won't give up until...well they have to because the fiat currencies are mired in competitive devaluation and sinking into inflationary spirals we have not seen for a generation. Hardly noticed how far down they are going because the euro is hiding it for now, the chinese Yuan is tied to the USD and everyone in the WEST is f....d. Anyone would think Greece would suffer deflation whilst their economy implodes. That's what the economists who advise Brown would say. But in fact, just as here, inflation is gathering pace fast. Did you know our RPI (Not that made up CPI Brown pretends with) is at 4.4% and rising.
  4. It's insanity beyond belief - pure Brownism. The long held problem where thrift is punished in the public sector has to stop! I would abolish the, 'I'll cut your bedget next year if you don't spend this year's', is and has always been madness. I remember well a short moment of my career in the public sector. It was March. The budget had not been all spent. So the management had to dispense with perfectly good desks and buy new ones, which were no better. They had to have partitions removed in the office to make it more open plan even though no one there wanted it. I was disgusted at the waste. Then there was the case where somone found to be a poor performer in their annual appraisal was asked to leave. After a fuss and threatening an employment tribunal an offer to go quietly on payment of 30% of the annual salary was made. I was again horrified. Of course when I left a couple of months later, having been given a good appraisal I was offered nothing! Funny old world of public spending. Hmmmmm....
  5. I would not bother with the Companay mentioned just to have physical delivery. Best to use a company like GoldMoney.com who will store it for you in London or Zurich. Best to steer clear of Sterling altogether...and the Euro. Jim Rogers, the famed investment Guru has said it would have been better if Greece had been left to default as far as the Euro is concerned. That may sound odd, but I agree. There will be another country in trouble then another... and they cannot be bailed out just because they are stuck in the Euro and should be suffering devaluation. The Euro will remain weak even if it recovers momentarily. Buy Silver. That's the answer.
  6. Spain has often had much higher unemployment than the UK and some other Euro nations. It really does not have enough industry. There is no real, dare I say it, financial sector. Its tourism sector has been decimated by their property crash around the 'Costas'. The Uk will recover much better than Spain. It's very sad to read these figures all the same. I doubt it will help Spain's ailing credit rating.
  7. The problem is we no longer have 'sound money' in the western world. It will not be sound again until the rediculous debts of all nations are dealt with either by default or massive cuts in public spending or a combination. Look out for massive rises in the price of commodities like Gold and Silver during this process. In the UK we had Brown and Darling transfer the unpayable debts of banks to the govt balance sheet. The BOE decided savers should have all their interest taken away and give it instead to the banks, who have enjoyed the biggest lending margins in history since the base rate was reduced to nothing. No wonder LLoyds was able to post a profit this week. It's the only reason they did, so don't be fooled. The debt deleveraging in Europe has begun and it will lead to renewal in the end.
  8. We need a shift back towards the private sector providing jobs and less people employed in the public sector which is bloated. Nothing against any individual, but there is huge scope to reorganise and reduce the bill for the wealth providing, paying part of the economy. Until you do that the national debt will continue to increase and eventually you will be a large Greece style problem. We have 68% gdp debt already and rising fast - 12%pa. Any country could reach the point of being unable to service it all depending on interest rates, very rapidly sparking crisis. Italy has a structural debt of only 5% pa, but a national debt of 115% gdp. So they are adding less debt each month, but the chances of being abale to service it and pay it back to sensible levels is remote - any increase in rates means crisis. Spain and Portugal - both in trouble now. If the money markets do not want to lend then they will offer only punitive interest rates. The UK cannot just be content with saying it has much more longer term debt, which requires renewal in 10 or even 30 years. The markets will turn and stop you borrowing today for next months public sector bills if there is no proper debt reduction plan. The markets had Greece on 5% only a few weeks ago for new debt. It edged up to 6.73, then 9, then 12%, 15% and today about 20% as they became 'junk bond status'. The cuts all over Europe will reignite recession most likely. But it's prrecisely because we were so over borrowed before any crisis that you are in such a mess now. You should pay down debt in the good times, then you can afford to borrow in the recessionary times. 'No more boom or bust!' That remark shows Mr Brown does not understand markets. He should never have been chancellor or PM.
  9. It does not matter what the Nationwide says. It's all history. The financial pressure is building fast all around Europe. The thrashing about like fish in a bucket has begun. The IMF, ECB and Germans will try hard to paper over the crack from this parallel universe to the reality we are peeping at. But the crack will not shut with mere paper - fiat currencies are losing value fast. At some point they will fail and the big sovereign default trail will begin. I think the very existence of the Euro is at stake.
  10. These wages for cleaners and dustbin personnel are clearly an outrage to all right thinking people. Nothing against them and they are necessary, but there are many people with degrees and years of training who earn no more. They may even be paying for student loans for years aswell. No wonder public spending needs cutting. Those I know who deal with contracts obtained from public bodies like hospitals always say there is massive waste wherever they look. Frankly we'll need to get some serious business leaders to overhaul the public sector. It can't be done by the likes of hospital managers on £250k pa when they would only earn 25% of that for their skills in the private sector and without a govt pension either. The audacity of the NHSin providing a 7% increase last year to such people when the country is falling to its financial knees just beggars belief. I would run the hospital on half the admin staff on half that wage in no time. They can strike all they like, but the money was never really there to pay these wages. It's a borrowed money fantasy created by Mr Brown as chancellor. I am just very sorry for those who will be so badly hurt by the massive cuts to come. Councils will need to cut very hard too as many receive monstrous support from central govt and it will shrink very soon.
  11. The IMF is just like a store card, except they want you to stop your other spending and just borrow from them. The Greeks have a 19.05.10 deadline to rollover a 9.5 billion Euro lending...I mean spending spree. The Greek economy is BUST.
  12. Dear Camem.bear, The money markets probably won't lend at any price to Greece. They would just put up the rate again to make sure. 12% yesterday. That's an impossible rate. I wonder if greece thought of asking for a new credit card from Topshop or Debenhams, only about 26%pa. They probably wouldn't ask for income details.... Worst case scenario says: Portugal is next in the big Q for an interest rate and BBB (FOR BAD) rating shock. Then I suppose Ireland, Italy, Spain, Iceland again and of course the UK unless draconian cuts are in place by September. The bought off, borrowed off recession will return in a different form. This time instead of the Banks running out of our money, the Govts will line up to run out, since all these Govts have pretended it all went away by moving it onto their Govt balance sheet and removing it from the banks. The USA will then look over the Atlantic and ....well, that warm fuzzy, new trillion dollar loan feeling will evaporate.
  13. It's very hard to call the timing of this. Gold and Silver are below their inflation adjusted peak by a mile. Gold has risen in fits and starts over the last 3 years. When it was $400 only a few years ago not many suggested it would be $1100 by now. I reckon, if it rockets there will be particular triggers, which we may be starting to see. First will be various western countries starting to find they cannot raise their monthly loan of billions on the money markets. Greece is already there and the rest of the PIGS + uk to follow. They've lied about the extent of their debt. Don't think other countries are incapable of this. Germany does not really want to bail them out since they don't know where it will end, either with Greece or others putting out the begging bowl. Are countries now too big to fail? The markets are calling the EU's bluff by dramatically increasing the interest rate for Greek debt to unaffordable. The market is saying, 'let's see your bail out money then,' The USA posted figures for last month show a $170Billion dollar black hole creatively covered over with the word 'other' income. It is not explained from where the month's hole has been filled. It has been suggested that repayment of TARP is the only conclusion, but this will not last will it!? There have been recent wobbles in selling $42billion of debt in the month before I recall. Some economists believe that the USA and a number of other countries have already past the point at which they can ever hope to repay their debts. The possibility of contagion is there and quietly inflation is rising - lots of price rises reported in the US. Govts have been desperate to prevent a big rise in Gold as it will show the fiat currencies for what they are - worthless paper backed by no real wealth atall. It will still take some time for the truth to be out and then as it does, Gold will rise. It may still take up to two years while govts cling to one bail out plan after another, trying to persuade us its'a all fixed and we can recover through growth. Once the cuts start, as they must, we will alll realise that is a lie. Mid term gold will be a winner even if there is a short term pullback -SILVER IS BETTER STILL. Even in pounds these metals will soar as currencies fail.
  14. Inflation measures are very complicated. We can and are suffering some inflation from a fallen pound, thus making it more costly to import. However, the money supply has increased dramaticaly through the financial crisis and people just assume inflation will take off. Logically it will, but it's the velocity of money that counts and at present that has not picked up sufficiently. It will do and at the same time a HPC could easily happen since the cycle is at the top and a reinflated balloon. In 1980 when there was a massive spike in Gold and Silver, the property cycle was not at the top and the ensuing interest rate increases only tempered the housing market which did not require a crash correction, unlike now. Remember inflation reached 17% in 1980 and interest rates were about 12%, so savers lost more than now in saving accounts. PETROL prices at the pumps should not be confused with the general rate of inflation. Most of the price is tax - about 77p. Oil prices are in USD and therefore if your currency falls against the USD, you will pay more for fuel whatever other factor there is. In this case, last time the oil price spiked to $145 per barrel in 2008, the pound was about 30% higher against the USD than now. ECONOMISTS ARE BUSY ARGUING ABOUT DEFLATION VERSUS INFLATION. Fact is that there is a mixed bag here confused by big currency fluctuations and asset price falls. However, there WILL be inflation - it' s in the system and on the way. The Usa HAS INCREASED ITS MONEY SUPPLY BY A FACTOR OF 3. We are not far behind. It will not be stopped easily and interest rates will rise; they have nowhere else to go. Things always take much longer to work through thangenerally anticipated. That is why Mr Brown has been able to put off the true effect of his mismanagement - borrowed far too much a new UK PLC credit card.
  15. Lots of you refer to the idea that some people find it cheaper to have a second home for holidays than going to hotels etc. This is a matter of great unfairness to the population at large. Do you realise that non- second home owners are subsidising the purchase and maintenance of all these properties? The tax system has to be crazy when it says that if you buy a 'holiday home' you may write off the loss you make from lack of renting it and using it yourself, by simply deducting it from your own income tax bill! You need only rent it for 10 weeks pa to have this golden free ride at everyone elses expense. Half of the homes in Devon are now known to be 'second homes' because of this rediculous tax break. Not only do taxes pay for this, but then (a bit like MP's) you can sell and keep the capital gain subject to quite a benign set of tax rules. Mr Darling did one thing right in his March budget, which was to announce the end of these tax breaks. Of course, since it has caused such a distortion of the market all around the West country and some places in Wales and elsewhere, there have been calls to reverse this to the status quo. The argument was that there would not be enough accomodation in these holiday spots and it would harm the local economy. It is such rubbish. It would cause the properties to be let for much longer as they would have to pay for themselves! They would have to compete on price more, out of season particularly and the price would probably reduce. Hotels/ b&b's would soak up a little more business and all would be well. The price of such homes would be under pressure and those born there might one day be able to afford to stay. Hmmmm. I suppose Darling had to be right once while he was Chancellor.
  16. The Article does not point out that the little bit of extra growth @ 0.4% pa has only been brought about by creating a huge structural deficit even before the financial crisis began. An unsustainable imbalance in the economy has been brought about by employing 600,000 more people in the public sector most of which is quite unnecessary. It has actually caused a drag on growth in the productive economy and therefore growth would have been higher still and our debts less if more restrained public spending (within the 3 % annual borrowing EU limit instead of 6% ,now 12%) had taken place. The HP boom would have been a little less even without lending regulation. How Mr Brown can suggest other Leaders would be a risk to the economy is beyond me, when it HE who has wreaked financial havoc on us all by his 13 years of profligacy (well 11 years as the first 2 were not over borrowed). Even by 2001 it was clear a housing boom was in full swing, fuelled by lax lending and govt borrowing for public services, 90% or more of which was going into raising pay and employing more and more pointless admin. I bought a commercial building in 2002 and it went up an astonishing 75% within 3 years, so I sold it in 2005 thinking it could not go on. And it didn't for long....
  17. MOODY & VERY POOR: 'We have downgraded Greece today (again, can you believe!) to a DDD+Bust. Very sorry, but still love your yoghurt recipe.' 'As for the UK, we are letting them play elections at the moment. They haven't quite maxed their BOE credit card yet, but do watch this space.'
  18. Interestrateripoff - You have agreed with all my posts to HPC! I agree whole heartedly with your sobering thoughts and have been saying it and writing to HPC and political parties for months. Somehow, the parties just accept Labour's plan of halving the annual structural deficit in four years as if it were enough. It's plainly not! They are too scared to tell the truth because it's ugly and does not win votes to be so pesamistic. Optimism will return if we deal with it and pesimism will rise if we do not. The markets know we are on a knife edge and the UK will not reach £1.4 TRILLION in borrowing before Gilt auctions fail and or interest rates make it impossible. Frankly I don't think it will be that long, months or even a year if the cuts are not good eneough to satisfy Mr Market. Ireland has kept its govt debt interest low only because they have decided upon savage cuts. Like anyone, I don't want to see the effect on people of this, but all the same we will be bust and at the IMF begging bowl like 1976, like Greece is now, if we do not do something more substantial than Labour plans.
  19. Oh how Goldman love to play games. It is possible that a short upswing for sterling could happen for several reasons and it has drifted up a bit, probably hard to say what for except other currencies like the Euro are weaker still. Note, it has not appreciated against the Aussie dollar which is proving much more resilient. In fact it has fallen badly against it over the last year. But, if Goldman want this 'advice' public there will be a reason. It's not likely that they think Sterling has much strength since our structural deficit is almost as bad as Greece - just have not quite got the %GDP of national debt, but we are heading there unless full scale public spending cuts are put in very soon. That's where the argument lies. The 'don't cut now because we will halt the recovery' brigade have up to now been winning because of silence from any party about the effect. The effect of acceptance is reaching debt in a couple of years, which cannot be paid back, like Greece. The alternative is to stop the recovery and have the retrenchment now, in which case less debt and much less to pay back later. Think I'll steer clear of Sterling and the Euro unless deep cuts are coming because that's what it will take to stop a medium term slide.
  20. Gordon Brown to Darling: Why don't you just borrow twice as much then the recovery will be twice as quick? Darling: It's only because there aren't enough digits on my calculator Gordon. But I have written to Mr Market to ask if we could. Brown: I'll get some more chinese ink and paper ordered. We can print lots of Euros. No one will notice. Then we'll just join it and pay off the debt via Visa. Darling: Gosh that's a vote winner Gordon. better stop this joke; some one will think it's true
  21. I agree this BTL sell up is interesting. It is patchy though. I think the proper crash will come as the govt debt forces reality into our economic life. It may be quite sudden or take several years to play out. I think by 2015 it will be all done with. It could be much quicker. But it will happen. The news articles pinned to this site today show just how important the UK debt problem has become. We have borrowed over 54% GDP currently as a national debt and want to make it nearly 100% according to Darling. We'll never get there. Too many countries in serious trouble already - The PIGS and ourselves. Even France has quite a hefty debt. Basically most of the western world come to think of it. There will be a shift of wealth to the East over this mess. All our silly govts faults. No need for this level of crisis ever existed until, the bank regulation was undone around the western world at different times since about 1990. The truth is many BTL were never actually lent on a properly costed basis and the lenders have a lot to answer for in allowing it. GREED it's called. Lenders can say borrowers should know better, but often borrowers will think if it's allowed it must be alright. The main thing is that in future, people put down deposits, have a rent of 1.3 the mortgage etc. Lots of this was all feigned and then there was the 'gifted' or 'free' deposits entered into by developers and agreed to by Lenders WHERE a developer just pretended the price was higher, a valuer said it was a market price, the lender leant anyway calling it a 15% deposit! Tens of Thousands of them were done. Like all things that are too good to be true, those arrangements have often ended in tears. Realy they were 100% BTL mortgages. Not actually allowed on paper and for very good reason - they don't stack up. Properties did not always rise in value and the reality was rather lax valuations - even negligent where whole blocks were sold to BTL, clearly affecting value, without this being taken account of by greedy lenders and even naive borrowers. So, very subprime behaviour. Plenty of subprime hiding in the UK still to come out. Only the preponderance of variable rates which went lower has saved us from the correction the USA has enjoyed. Inflation is in the system, rates will rise, govt borrowing will be savagely cut, job losses are coming. The house price 'party' has not been mended by Gordon, just postponed until after the election. He will be glad when and if he loses that he can leave it all behind him. His reputation will not be helped in those history books though.
  22. You're a bear aren't you? So, just ask yourself this: Could you afford to buy the same home again with your salary as it now is and with the same deposit % you put down when you bought it? No? I thought not. In fact I rest my case. It means it costs too much. It's in fact now about 5 x your salary when I think about your statement. That is not a multiple I believe in as realistic. It's a price which represents about 7 x average salaries. If its an avarage 3 bed terrace or semi then long term trend says it should be about 3.5 x av incomes. My bet is it will be worth less in 2 years time than now. So sell. We should all take note that the increase in house prices over the last 14 years is the steepest in history, once low inflation is taken into account. That is why it's so dangerous. Incomes rose about 80% in this timespan while houses rose averagely 350%, some 400%. An example of the nonsense it all is: I know a retired cafe owner who lives in Brighton in a very pleasant 3 bed detached home with a 60 fooot garden in a nice road. The other day she told me what she paid for her house in 1970. It was £10,000. Now it is 'worth' about £600,000. An astonishing 60 x what she paid. Yes, there was some terrrible inflation in the 70's and 80's. But I checked how much wages increased in this period. It was about 28 x and not 60x. She thought it was expensive when she bought, but knows that her same business would not buy it for her now if you said buy it again today. Interest rates could well rocket to the unimaginable in the next year or two. See the article about this today on Yahoo finance (us) page. The world is likely to fall prey to sovereign default problems very soon. The UK is amongst the top 4 worst borrowers/money printers. Good luck with whatever you decide. Oh no my crystal ball is hazing over again.....
  23. I lost no time today in writing straight to the agent asking them to put the price up, to make sure house price statistics remain absolutely right. I'm sure by next month RightMove will let you know that asking prices have jumped again (even when there are no first time buyers)
  24. The probability of a 'Greece' after the election will increase dramatically if there is a hung Parliament or Labour are miraculaously returned with a majority. Interest rates are rising in the money markets and the UK inflation rate is increasing. It will not be long before general interest rates are forced to rise. The BOE rate is a bad policy which has shifted the expected income of savers straight onto banks balance sheets, giving them the largest margin in history. They have not lowered all mortgages to about 1.5% above base except where they had to - eg trackers. New mortgages are most 3-4% and many much more without substantial equity or deposit. What a con! No need to lose the will to work. It will all blow apart soon enough. See the sensible comments by shadow business secretary, Ken Clarke today. Unemployment rose to 8% despite all the borrowed and printed money supposedly helping us towards 'recovery'. Pah! We have borrowings very similar to Greece, so expect a run on the pound, rising inflation, rising interest rates, property prices falling again - 'first time buyers at 19 year low,' in the news today. Even expect the IMF to visit Britain again because the money markets suddenly refuse to buy our debt (GILTS). The only question left; is 2010/11 a repeat of 1976 or 1932?
  25. Well done Concrete Jungle! We must all start printing our own monopoly money, just like the govt. That's obviously the answer. It must be why Mr Darling looks so calm. Only problem is Govt have mortgaged Mayfair through to whitehall without a thought for the cost. The £200 we will collect as we pass go will only last for the first hour of the year because of inflation.
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