FallingAwake

As investment advice, this has a hollow ring to it.

Thanks. I'm sure it's helping morale in these semiconductor companies, in a "the beatings will stop until morale improves" kind of way.

The media didn't cause house prices to soar. But certain segments of it definitely cheered it on.

I think your quiz would have more impact if you adjusted the house values so that they both ended up paying off the mortgage at the same time. That would really drive home the impact of the interest rate, in my opinion.

Nope. UKIP / Brexit Party had a major influence on the Tories, despite winning only one or two seats in parliament. Nick Clegg's Liberals entered into a coalition with David Cameron's Conseratives, having a significant impact on government policy. Our system ain't perfect by any stretch, but it's a helluva lot more possible for third parties to have some impact than in, say, the US... where politics is basically an entrenched duopoly.

Well, at least that's clear 🤣

I don't expect anybody to get inflation predictions right. The economy isn't one "thing," it's a massive collection of interactions and transactions. Bailey's predictions are just educated guesses. I suppose his predictions are given more credence, because he has some control or influence over the volume of money in circulation, but he doesn't have total control, i.e. how much of it is spent, the velocity of it, the cost of raw materials etc etc. On the other hand, he's paid to reign in inflation, and the BOE have definitely failed on that point if he's saying it'll be 13.3%. Even if it's only 10%, they've still failed. Also, since (I think) their target is a long-term target of 2%, I wonder what 2 years of 10% inflation will do to this target? If it was serious, it should mean they'd need to produce a few years of deflation to return us to 2% over the long term! Will they attempt to achieve that? Of course not

Talking of Brexit, UKIP and then the Brexit party showed that you can have virtually 0 seats in parliament, and still make a difference. In other words, a new party doesn't have to win power. It just has to scare the existing parties into serious action.

How much air is there? Enough for everybody. The same is true of a lot of these other "finite resources" you talk about. I notice on other threads you insist that energy must become more expensive. Yet the universe is literally FULL of energy. It's really just a question of tapping into it. If the past is any guide to the future, energy should actually become dirt cheap. Do a little googling to find out how much energy (in wattage terms) your body needs, and you'll see what power and efficiency really means. Google the "electron transport chain" to see how mitochondria pump protons and shuffle electrons around to release energy in a beautifully elegant and efficient manner. Yet here we are in 2022, still arguing about burning fossils. Again, why? No debate about the East increasing in wealth. That's a good thing, and should even be inevitable since that's where the bulk of the world's population is anyway. But why does that mean the West get poorer? (Unless you mean relative to the East, which is inevitable for population reasons, i.e. the US at 300 million vs China at 1.4 BILLION and India at 1.3 BILLION.) If the West get poorer relative to itself historically, it'll be because they're massively indebted and have short-termist governments who keep spending like drunken sailors. Anyway, I think there's more than enough stuff to go around. Some resources are limited, i.e. lithium, but if we start to run out or the supply gets monopolised, alternatives can be found. The West hasn't really had all that much special treatment. Putting aside politics, in terms of "stuff", what can you get in the West that you can't get in Russia or China or India? The main difference is money. A person in the West probably has more money than someone in, say, India. I'd suggest that's because the West has focused on creating fairly stable economies, and the legal and political systems to support a reasonably well-functioning economy that can produce wealth for both the country and individuals. Russia was under Communism until 1989, where everything was under centralised planning . The same was true of China, until they started mixing in a certain amount of capitalism in the 80's and 90's. In other words, the East's "lack" was more to do with their choices politically and economically. The problem for Russia and China is, you need a fairly stable political and legal system, to have a fairly decent economy. Russia doesn't really have that. I guess it's stable on the surface, but since nobody knows Putin will do next, it's hard to choose to invest in Russia, right? On the surface, China is more stable because of its entrenched one-party state system, but arguably that makes it more unstable really, since the entire economy and its companies are at the mercy of the whim of Dear Leader. In short, if the West has been living "above average", it's because we've earned it by having relatively stable economic, political and legal systems.

They'd already put that column in grey, along with half a page of disclaimers. They should have continued publishing those figures, but keep making them smaller and whiter with each report, so that eventually you could only see the figures if you have your browser set to 600% magnification.

Why do these "regimes" feel the need to add words like "People's" into their names? If they're going to do that, I'd at least encourage more accuracy. Donetsk "Puppet of Putin" Satellite State.

Wait. I thought this was about denazifying and demilitarising, not about the salami-slicing up of Ukraine? Well, I'm completely shocked at this completely unexpected turn of events.

I suspect the BOE know that house prices need "adjusting" and their preferred way to do this is by having house prices inflate less than wages for a sustained period of time. But their remit is to get inflation to 2%, so the longer it's not at 2%, the worse it looks for them. In other words, I think they're trying to create a soft landing for house prices in real terms, as well as inflation. We'll see whether they can pull it off.

Did you ever watch The Americans? It was about a family of Russians who lived in the US as sleeper agents, occasionally performing missions for their Russian handlers. To everyone else, they were just an ordinary American family. And Zu Gzwang is just "an ordinary member of the British public."

Does the fourth jab come with added Boswelox (tm)?

Thanks for posting this interesting article. Well, I guess we'll see how things play out. We're clearly in for a bumpy ride, maybe a whole era of high inflation, but where asset prices don't inflate anywhere near as much, so fall in real terms. That, at least, is my amateur guess at where we're heading. Personally, I'd just prefer a humungous House Price Crash fueled by insanely high interest rates

Maybe, but if prices did fall, I'm sure that "non-financed spending power" would find better places to invest their money. If house builders are relying on finance to build houses, then perhaps there's something wrong with their business model?

While I agree the government aren't going to pay most of people's electric bills, less than 2 years ago the government was paying 80% of the wages of those people who were furloughed. In other words, if the government truly believed there was a crisis, it could find both the political will and the money. The real question is the political will factor, and I don't think it's there... although they might put up the £400 subsidy that is being offered to all households, between October and March. £400 x 20 million households = £8 billion. So they've already committed to spending £8 billion to subsidise people's bills. It's not out of the realm of possibility for them to decide to raise that to, say, £16 billion.

It's really a double whammy for millenials. Not only is it harder to access property, the chances of a "job for life with a full pension" are also a lot harder, unless you work in certain fairly narrow sectors, or the State. As has been pointed out on this forum before, somehow this will manifest itself politically. There will be an increasing number of votes to be won by a party who can genuinely resolve the housing issue, and not simply stick plasters over it. And to pre-empt @zugzwangposting Corbyn's face for the 28,647th time... yes, Corbyn may have been the answer on that issue... but the country was still trying to resolve Brexit (still not resolved by 2019, three years after the 2016 referendum), and clearly the country didn't find Corbyn convincing enough, on a serious matter they had been consulted about three years earlier. (I don't want to bring up Brexit. I merely raise it to pre-empt the zugzwang Corbyn-worship). But now there is an opportunity for a party to win millions of millenial votes, by offering something much more than Help to Buy and its awful derivatives.

I agree, a lot of this hinges on tax revenue, which is why I think politicians are mad to constantly dangle tax cuts to the electorate while the national books aren't anywhere close to being balanced. Clearly balancing the books ain't easy in this day and age. Look at the whining about "Tory cuts" while Cameron & Clegg were trying to reduce the deficit. As a government it's far easier and politically acceptable to splurge money than spend less of it. Yep. Paid for by future generations. Well, I'm not an expert on government debt, but isn't some of it (i.e. bonds) offered at a fixed rate, like a 2% dividend on the initial nominal value, and then markets set the price of the bond, so it's the bond price that varies, rather than the interest paid? If that's how some of it works, then at least the older debts are easily manageable, in an environment of higher inflation. However, yeah, IF they are forced to borrow at 10%, then that's going to be a problem (for future generations). My suspicion is, it wouldn't surprise me if governments have ways of borrowing at a much lower rate than a 10%+ inflation rate. I'm sure they can (and maybe do) come up with creative ways of lending money to themselves.

I think we have to remember that some people, on here and elsewhere, genuinely buy into the Russian narrative, i.e. that Russia has been more than generous with Ukraine in the past, and is now defending itself against Nazis. They don't accept that Russia is the bully in all of this. Of course, the narrative falls apart with a little scrutiny and questioning. I've repeatedly asked @rollover what the criteria is for determining a nazi from a regular Ukranian, or how rockets and shells are able to make that distinction. Of course, I know he can't answer that question because, by definition, rockets and shells don't discriminate. And their is no criteria, because denazification was just an excuse to invade. (In military terms, it's called a "cassus belli". And no, @MonsieurCopperCrutchthat isn't a concept made up by Paradox Gaming Studio ) I think the best response to Russian trolls is to repeatedly highlight the failure, hypocrisy and BS of their underlying narrative.

To add to your points, I think there is also another factor. In some cases, inflation can help to lower debts in real terms. For example, if you have a loan of £10k repayable over 5 years at a fixed interest rate of 5% p/a, then if inflation is running at 10% p/a and your salary keeps up, then servicing the loan gets "cheaper" each year in real terms. So inflation (in reference to price and salary increases) can actually help some people, especially where the interest they're paying on a debt is lower than inflation. The question is, how does this work for governments? Do governments benefit from higher (>=10%) inflation? Where they have to pay people's salaries, probably not, because people (especially those working for governments) tend to demand increases in line with a price index, such as CPI or RPI here in the UK. On the other hand, if some government debt has been offered at fixed rates (i.e. 2% or 5%), then clearly servicing that debt could get cheaper for the government, assuming tax revenues increase in line with the inflation rate. So I suspect some government expenditure (i.e servicing debt) gets cheaper, in real terms, due to inflation... and so governments aren't completely opposed to the idea of "letting inflation rip" for a little while, i.e. two or three years. I suspect central banks know this, which is another reason why they're "concerned" about inflation and jawbone about how "vigilant" they are, but aren't exactly in a hurry to stamp it out.

Yes, and hopefully that will change in the next 20 years, as interest rates revert to their mean average, saving becomes worthwhile again, and homes become somewhere to live again, and not primarily investment vehicles. Otherwise your children will eventually live in a society where Help To Buy V20 allows them to buy 6% of a box stacked on another box.

Thanks. Kindle Price £42.29 👀 Know a good summary anywhere?

I think it would help if we knew about attitudes to UK house prices historically. I'm in my 40's, so I can really only speak about house prices since they started soaring during the Blair years, creating a self-reinforcing belief that "you can't go wrong with bricks and mortar". However, I read anecdotes on this forum that during the 80's and 90's there was a lot more house price uncertainty. But what about the 40's, 50's, 60's and 70's? What were people's attitudes to house prices during these decades? So far it seems like house price obsession is a distinctly Blairite phenomenon that has continued during the Brown, Cameron, May and Johnson eras because they don't want to take the punchbowl away from people. But I'm happy to be proved wrong.