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House Price Crash Forum


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Posts 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. So what is the difference here between property rights for land and for food? You seem to be making a distinction. It's ok for starving to farm land claimed by another, but not to take food claimed by another?

    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...


    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. Conspiracy - Not too fussed on this one myself, a pack of lions manage to hunt just fine without sitting in a darkened room plotting. I'd maybe raise jekkly island though.

    That banking is a scam is really easy to prove, however. Most of the profits come from information assymmetry in contracts. Fraud.

    No coercion no crime... A fraud can be avoided by those who have seen through it. Not so with banking.

  5. Not happening. They'll kill to prevent it.

    Straight ahead til collapse it is.

    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.

  6. Possibly, but that should actually be a disqualifying attribute and good reason for kicking the lot of them out on their rear ends

    Then there's also the question of how these idiot savants have managed to operate such a fiendishly complex system and still managed to come out of the other side 1. wealthy and 2. not in jail. I suppose everyone else could give them the benefit of the doubt, but I'm struggling to think of a reason why

    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.

  7. That's where the fraud lies. Do you not see this?

    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?

  8. Money is the good most universally accepted when offered.

    There is no way that it can be an unknown. It can, however, be a mistake. People mistook paper promises of gold for gold. They are doing it again, but paper to PC numbers.

    A mistake which they are now forced to accept by the coercion of the state. Coercion can influence the market.

  9. If that was true, why don't they just print up that much cash and have it in vaults, hmm?

    No chance of a bank run that way....

    Does promising your mate a pint at weekend get him drunk?

    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.

  10. Some printing is in place. More will come.

    The distinction between credit is obvious. If I promise you a carrot, it is not the same as me giving you a carrot. You can't eat a promise of a carrot, but you can eat a carrot.

    Bank credit trades at parity with cash only because of the deposit guarantee. Cash is credit.

    It isn't the deposit insurance which debases the money supply. It is the printing of money to honour the unfunded insurance.

    Deposit insurance may encourage people to pretend promises of money, is money itself. However, this completely screws the risk analysis of depositors. It encourages people to deposit money at banks doing insane lending, while believing that their money is 100% safe.

    Money needs to be defined by the market again and risk needs to be reflected by the market again. Glossing over both with yet more lies, force and theft isn't the solution.

    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.

  11. Did Injin invent a time machine in 2007?

    Because he appears to be arguing with his considerably more sophisticated 2012 self.

    Don't really get your comment here to be honest... all I can say is that it's beginning to feel like groundhog day.

    The printing of money is not already in the price.

    If it was, you'd already be trying to steal my out of date bean stash.

    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.

  12. Acceptance isn't demanding.

    What matter is the man in the streets mindset. Go out tomorrow and ask people what bank credit is. They won't have the slightest idea. Then ask them what money is - and they'll tell you notes and coins.

    Field tested, works.

    They don't need to know what bank credit is for it to be money... and that's the problem.

  13. Promises of money will never be the same as money. They are two completely different things.

    Only so many promises can be replaced with printed money, before the money becomes worthless. If enough banks fall over, the currency will fail, regardless of what the central bank does.

    Besides, we were on and off a gold standard until the 1970s. It was still backed by state theft/force, but at least there was an element of market pricing in there, unlike now.

    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?

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