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House Price Crash Forum

the_austrian

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Everything posted by the_austrian

  1. The only way to get a meaningful nominal crash is for there to be less money in circulation. Which can only happen if significant amounts of debt are paid back... which is literally impossible. A big mistake people make is to compare what we are going through now with the depression of the 1930's. A stock market index is NOT THE SAME as a house price index. People need houses more than they need stocks. In the 1930's the leveraged investors were generally wealthy speculators who could easily close their accounts and pay back the debt... they had the liquidity to do so. With the current house (credit) price bubble people are simply unable to pay down the debt. If someone has taken out a 200k mortgage on a semi in the home counties they are not going to be able to pay back the debt. So there will NEVER be a nominal crash. The best people with an interest in housing themselves and their families can hope for is for there to be some serious land reforms such as a Land Value Tax or similar. The only market-based solutions would be a repudiation of the fiat currency by the population which is in effect a hyperinflation event. If that doesn't happen only a true banking crisis would result in house price falls. This would mean they would need to let the banks fail. Which as we have seen is unlikely.
  2. The government is borrowing from people who sell things. Let's say the government wants to commission the building of a new hospital. The people who win the contract agree to build the hospital and agree to receive their payment in the future. (They have purchased a government bond.) This means the government is now in further debt. A bond has been issued (to be repaid by taxpayers in the future) and your children are now further in debt. The government is borrowing from anyone who will sell things to the government and is willing to accept deferred payment. It continues for as long as the government debt is valued.
  3. There is a huge distinction between excluding the 'poor' from food directly and excluding them from land. No one made the land. One of the best written expositions of this important distinction is by Winston Churchill... http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html In short... the landless have justified grievances against the rich... those with land do not. There is easily enough land on the planet to feed everyone. This is where the arguments against technology are futile. People have been able to feed themselves for thousands of years and we can certainly do so today. Robots are only a problem if you have no means to create wealth (food) yourself. Those with land will always be able to support themselves and robots will only improve their lives.
  4. Interesting thread. My only thought is what are you doing with the cash? Fiat money is a dangerous thing to be holding onto... especially as we face a very uncertain future financially. As you accept yourself. Hard to know where to squirrel away that sort of retirement money. Stocks and shares?
  5. No coercion no crime... A fraud can be avoided by those who have seen through it. Not so with banking.
  6. Call me an optimist but I have faith in the internet remaining free. If it isn't we have (perhaps) bigger problems than banking.
  7. It's difficult to see something you do not want to see. And the money is good
  8. The days of being able to bump off a president are long gone. If there is sufficient soft pressure in the media (the ballot box is less important... ) to look at reform it will happen. Mervyn King: "Of all the many ways of organising banking, the worst is the one we have today." Central bankers have never spoken like this. They must change because their inconsistencies are becoming more and more obvious. The internet age likes consistency.
  9. Truth and reconciliation. I'm long past the stage of wanting to seek revenge. Now all I want is for the system to be fixed so that banks can fail and we can get on with our lives.
  10. Perhaps they do not share our cynicism. In fact being somewhat naive concerning the effects of their actions might be a qualifying attribute.
  11. I see that most people do not know how banking works and they think their bank account is representative of cash... this doesn’t strictly define fraud. Even the bank could be confused about what is going on. It’s not fraud if it’s not deliberate and that’s where the accusations of conspiracy are relevant. I don’t think there is a deliberate conspiracy amongst the bankers they are merely the happy beneficiaries of legal precedent (and ignorance) that have lead us to where we are now. The most important organisation in the country is the central bank and almost no one pays them any attention. How many people had even heard of Mervyn King before the financial crisis started?
  12. I thought the value of cash comes from the state? Or have you changed your position on that
  13. No this is a complete misunderstanding... prices remain the same
  14. A mistake which they are now forced to accept by the coercion of the state. Coercion can influence the market.
  15. Ten pound notes with a picture of the queen on them are credit and they seem to serve as money. Is cash money?
  16. I don't speak for the central bank... you'll have to ask them. They might ask what purpose would be served by doing so... paper and ink can be expensive.
  17. Credit can be money without anyone knowing what it is... we disagree here.
  18. Bank credit trades at parity with cash only because of the deposit guarantee. Cash is credit. So there is no inflation if the money doesn't get printed? Is all inflation due to narrow money... Did Hayek and Mises toil their entire lives for nothing? If credit doesn't affect prices then a bank run would be possible but we have a central bank.
  19. Don't really get your comment here to be honest... all I can say is that it's beginning to feel like groundhog day. You could replace all the bank credit in the system with cash tomorrow and prices would not be any different. Otherwise we have full reserve banking.
  20. They don't need to know what bank credit is for it to be money... and that's the problem.
  21. This doesn't seem to contradict anything I wrote... care to expand?
  22. No if the government accepts bank credit then it is money like cash. All that matters is what the government thinks is money not the courts or arcane legal tender laws. Ask the man in the street.
  23. The printing of the money is already in the price. I don't understand why you are making this distinction between credit and money. Where does inflation come from if not (bank credit and) deposit insurance?
  24. Would it be money without violence? Earlier in the thread you said the market reacts to the coercion of the state... to make it money. So it is money as a result of violence. What makes bank credit the exception?
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