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brocken spectre

Letter From America

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All been said before i know,but,a Friend in America sent me a personal view i think is worth sharing.

"We are in the same boat regarding cash in the bank. Luckily, the government insures up to high limits in the US, but it's still disconcerting when your bank looks frail. Your best bet is either Northern Rock, or Bank of England bonds ie National Savings and Investments. Northern Rock has been in effect nationalised, and although it only received a loan from the government, I doubt Mr Brown would let it fold while on his watch. Nearly all banks are going to continue to lose money, as foreclosures render more securitised mortgages worthless. That includes foreign banks that were duped into buying these bonds. The next wave of mortgage resets (Options ARMs) happens in the US this year and is as bad, if not worse than the subprime resets. That will inevitably translate into more bank woes, but low interest rates have put a damper on this scenario to an extent. The problem with all the bail-outs is that the tax payer is on the hook for it, which will takes years to pay back. This probably means that even if we work our way out of the recession in 2010, growth will be very slow for several years to come. So although you may gain some equity by buying a house cheaper in 2011, it might not appreciate much for several years. One thing is for sure and that is cash is king. Sterling has depreciated against a basket of currencies, so although exports will go up, imports become more expensive. It looks like we narrowly escaped deflation, but inflation (possibly rampant) looks very likely. Things are going to get worse, and the only thing to do is batten down the hatches, pay off all debt and stay in cash or treasuries that are insured. Stay clear of stocks, corporate bonds, real estate and commodities, and don't trust anyone who tells you different."

Oh yeah! And pray more often :)

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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