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House Price Crash Forum


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Everything posted by Biggus

  1. In Switzerland the inflation rate is 2.5%. Amazing that commodities are not causing inflation for them.
  2. 8% in a month? That's incredibly high. Really, though, other than petrol I havn't noticed prices really shooting up this month. It's the empty shelves that really worries me. We depend on the BOE to bring inflation down, so I think we are in for a rough ride.
  3. Another victim of the BOE's bubble. That sort of money ought to allow you to retire to a fairly comfortable, worry free life. Instead the mark faces a lot of stress and losing piles of money they probably don't have. Economically it would be better to have people invest in productive business. The whole situation is crazy.
  4. Markets are forwards looking. They tend to price in what people think is going to happen in the future. Everyone knows the BOE has no clue, so expected a quarter point rise and priced it in long ago. The shock was the Fed increasing by a higher amount than expected, which was priced in last week with huge falls in the market. Buy the rumour, sell the news.
  5. S+P is up about 650% since 2008, not counting dividends. There's no correlation to the real economy at all, just money printing and interest rates. If the Fed were serious about beating inflation markets would take an absolute battering, not just the tiny correction we've seen so far. Markets are already starting to price in a Fed capitulation, though. Making tough decisions is not really in the central bank play book.They just don't have what it takes. The BOE is a complete joke. They will be up to their money printing and lowering interest rates nonsense again soon enough. First bit of bad news and the printers go back on. I don't see this ending until inflation really starts crushing people. Prices grow as a portion of themselves. This can get really bad really quickly.
  6. We've lived through a decade when real money, that was worked for and earned, has been swamped with printed fiat and bank credit. By design there has been no reward for working and saving. Investing in companys with sound fundamentals and good returns is out. Speculating on where the printed money would go was in. Productive work is a waste of time. Gambling on stocks and bitcoins is the place to be. Not a recipe for a healthy economy. House prices have rocketed out of reach of working people. A good quality of life can't be attained when every time you earn a pound a bank created two pounds in credit and outbids you. I'm actually becoming tentatively optimistic now. It seems like central banks are actually going to stop printing and begin allowing interest rates to increase. This will, of course, bring about a huge recession as real value is found and debt based garbage goes bust. If they stay the course, which is not likely, in a year or two the winter will be over and spring begins. Recessions hurt. If, however, they are allowed to play out without interference they are over quickly. The pain would only be prolonged by bail outs. money printing, dropping rates back down and so on. The next couple of years are going to be tough. But I think we may finally go through the needed correction and return to a fundamentally sound economy. Maybe I'm too optimistic.
  7. You are far too optimistic. 1997 and 2008 were only incredibly bad. Even then the busts were not allowed to complete. Central banks stepped in and 'saved us' from a true correction. Take a look at this chart, posted on WSB today. Extend the trend line from before the dot com bubble, around 1995, forwards. S+P would be about 1000. That's a fairly large fall. Add in bonds returning to market rates and governments trying to balance budgets. The crash would be spectacular. And it should be. That is the correct course of action. But remember all the whining about austerity when really small cuts were made to government spending? All the bail outs to save a few banks? Imagine if pensions were going bust, banks failing, tax recipts falling off a cliff and government borrowing costs spriraling. Printing money will look like an easy way out. In reality it isn't an easy way out. It's the path to complete and total catastrophe. It's been a long time coming but I think we are almost there now. I could be wrong, of course.
  8. The markets are not going to be allowed to collapse. The pain involved would be too great. I'm not sure how an 80% fall in stocks and bonds would affect penson funds but I would guess a lot would go bust. GDP would plummet and government deficits spiral. There's no chance they would willingly make huge cuts to spending forced on them by an end to printing money and high interest rates. House prices would, of course, plummet. At some point central banks will cave and the printing will resume. The end game will be a total loss of confidence in currency. This outcome is the worst possible, but my bet is that's where we're headed.
  9. I'd love to blame Gordo. It's too simple to lay all the blame at his door, though. One of the drivers of today's market action was the hot air released by the Fed's Bullard. In the interview he said a three percent increase in rates in the early '90s recession set up the conditions for the prosperity of the late '90s. That tells me the Fed actually knows what is needed to correct the current economic calamity. An increase in rates and a sharp correction. The insolvent and zombies being allowed to go bust and so on. But it seems they are not willing or not able to take the action needed. Probably due to government refusal to balance the budget. In any case, seems he agrees with me.
  10. 1997 to 2001 was a good time to be alive. That said I give a lot of the credit for that to the Major government of the early '90s. That government had a recession, brought the governments finances under control and squeezed out a lot of the malinvestment. House prices came right down and the economy was growing. All governments since have prevented economnic corrections and government finances are out of control. One of the big errors Labour made was giving the Bank of England control of monetary policy. We've had nothing but bubbles and busts ever since. The tech and stock bubble of the late '90s, followed by a bust that was fought off with a housing bubble. The housing bubble looked like crashing in 2009 and the correction was prevented by insane money printing and zero percent interest rates. The everything bubble was created. The bust we face now is catastrophic and was caused by problems that began in 1997.
  11. I remember reading some place that in a recession low order goods, that is stuff you buy often, go up in price. High order goods, things like cars, houses and financial products go down in price. Always stuck with me.
  12. True enough. Also a lot of people in working class areas still remember the '80s. Voting Conservative would be a hard sell to someone who saw their local industry destroyed. Younger working class people seem to feel that Labour abandoned them. I think they are correct. I don't think a Labour government would act in the interests of ordinary working class people. I could be wrong, but that's my perception.
  13. Yes. If Labour want the votes of ordinary working people they should represent them. Or at least not act as though they are only worthy of contempt. Just my personal opinion.
  14. Corbyn was a victim of Brexit. Don't want to turn this into a brexit thread, but I think Labour and Lib Dems stance on brexit was off putting to many people.
  15. What do you expect? We have a Conservative government. They look after the friends in The City, not a bunch of working class northeners. I'm just saying Labour seem to be worse. Labour is the party of the public sector, not working class people. The difference is Labour actively hates the working class.
  16. While this is a bit of fun it does show why people in the north are moving away from Labour. Labour hate northeners. Why vote for a party that hates you?
  17. I'm sorry if I offended you. Generally I like your posts, even though I usually disagree. Agree with this. People at the bottom of the pile really do get a raw deal. In my youth we didn't have foodbanks and there were very few beggars. With the hardships that look to be coming our way aid for people in distress seems like something that should be on the agenda.
  18. How can you complain about austerity when the state has only just invested in a two year holiday for everyone? You seem to think the government has a horn of planety providing unlimited resourses. This being the case only a miserable wretch would not want to use the magic, unlimited resourses of the state to provide everyone with anything they want for free. Unfortunately reality is not like that. Resourses are limited. The state consumes a massive portion of the productive output of the country. That spending drives down the quality of life of ordinary people. Reckless overspending by the state has created a huge debt and inflation is destroying the finances of millions. Yet you're howling for more government spending!
  19. Some good anecdotes in this article "Smart meter over 4 quid before 11am... wish it was an April Fools,” another user said. “8.20am and my smart meter already reading £3.15,” another said “My smart meter currently reads £2.92 at 11.20am it usually reads that at 9pm-ish on a cold day with heating on and after dinner." https://www.independent.co.uk/news/uk/home-news/energy-price-cap-bills-cost-b2049361.html
  20. Could be worse. Imagine how bad things would be if the BOE hadn't been so vigilent.
  21. £870 is more than two weeks gross pay for minimum wage employees. With the price of everything else shooting up at the same time there will be trouble ahead. Only going to get worse too.
  22. Sure, it wont work. But at least they are doing something to try to improve life for the working class. Compare that with Labour. All they do is bleat out NHS, increase taxes and blow piles of money. I remember someone complained to Gordon Brown abour immigration pushing down pay, increasing rents and making life worse. His response was to call her a biggot. How can you expect people to vote for that?
  23. Nothing! And they wont. But it shows they are willing to try.
  24. Yes, I agree. They live in a different world and just can't relate to ordinary people. I'm talking about the leveling up stuff and so forth.
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