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Did You See The Economic Crisis Coming?

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Please answer honestly and discuss your choices if you want to. HPC is quite well informed, so I thought it would be interesting to see how prepared we are for austerity. By prepared I mean generally, jobs, savings, food, emigration, etc...

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Your second question "did you think it would be this bad" needs another option: "No, it's going to get much worse".....

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Not at first.

Initially I came here trying to find some answers about the housing market. I just couldn't understand how/why prices were rising so much, or how people could afford those prices.

That was in 2005 (old account) and I've learned a lot since. So I was able to predict to friends in 2006 that the best case scenario we were facing was a recession (worst case, total economic collapse). At the time, the scepticism was quite noticeable.

I think I'm looking less and less of a TFH nut as time goes on.

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Initially didn’t see it as a macro event, I just didn’t want to take on the huge loans I was being offered in order to jump on the mid 2007 house buying frenzy.

For me it just did not make sense, but I was not aware of how bubbly it had become.

I came very close to buying, but was fortunately out-bid by greater fools.

The epiphany came with northern rock.

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Not at first.

Initially I came here trying to find some answers about the housing market. I just couldn't understand how/why prices were rising so much, or how people could afford those prices.

That was in 2005 (old account) and I've learned a lot since. So I was able to predict to friends in 2006 that the best case scenario we were facing was a recession (worst case, total economic collapse). At the time, the scepticism was quite noticeable.

I think I'm looking less and less of a TFH nut as time goes on.

similar reasons to you. Couldn't understand the incessant hpi and media ramping, so looked to this site for kindred spirits [or comfirmation bias as mctavish might say].

My views on the economy and financial system have varied greatly in recent months.

I've come to the conclusion that while this was a financial crisis orginiated problem, it reflects problems in the real economy, if the real economy is so utterly paralysed by dips in credit availability. Indicating a fundamental problem in developed economies that require continuous growth, and the peaking of a 30-year credit bubble.

It's not to say i believe in all debt being bad, i accept we live in a credit money system, but the bubble that was blown in cheap credit which took on a new life in the late 90's to early noughties, eventually reaches unsustainable levels as was the case in the 30's. So it seems obvious now that the crisis that aflficted the financial sector was a reflection of the household/business debt bubble. Attempts to divorce one from the other has been the biggest disservice.

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Yes, saw it coming and googled house price crash, found this site which confirmed my thoughts. Then went off sailing around the world. See here

I believe the consumer is yet to feel just how bad this is going to get, the latest talk of green shoots etc is utter rubbish.

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I saw 'something' coming - anyone who failed to realise that the numbers in the books did not add up was either not looking or not thinking.

As for the real world consequence - well to be brutally honest, what is the big deal? I do not know how others are but the 'crisis' has yet to impact upon me. My outgoings are moderate and I (presently) can easily cover it. Even in the absence of a job, it will be years before I would actually be in need of any sort of support from the state. As far as I see it, if you are truly suffering at the moment then you probably are one of those who has caused the problems in the first place.

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Saw it coming just after we moved in 2006 and thought this is crazy interest rates will crash the economy.

Little did I know that process had started in the US in 2005.

Although I'm prepare for what? As ultimately anything can happen and somethings you can't prepare for ie nuclear war.

The outcome is unknown so how you can prepare for that is beyond me.

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I saw it coming that why I registered back in 06, the descusion was always about when and how.

Now it is about how much lower and how much longer

Did I see Northern Rock, the bear and Lehmans going under, no, if you did you would be very rich now.

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67% thought it would be this bad and 86% are prepared/making decisions!

Even here on HPC people are seriously deluded.

In 2002 I came back from living in St Lucia for 7 years. I was amazed at the level of spending, new premium cars and retail spending and knew straight away that something was wrong. When I recently saw the balance of trade figures I started to understand, we, as a natiion, were importing about £200 billion more than we exported (£270b on goods, £70b surplus on 'services' - i.e. banking). This has been financed by personal borrowing (equity release and loans/CCards) and government borrowing.

We have not yet started to address this issue, in fact I would expect it is getting worse, you can't, long term, consume more than you produce. Currently the government is overspending by about a third, so to get that in line they would need to cut government expenditure by about 25%, i.e. reducing social benefits and cutting civil servants.

If anyone really knows how to protect yourself from the developing crisis of national solvancy then please let me know, because I don't have a clue!

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67% thought it would be this bad and 86% are prepared/making decisions!

Even here on HPC people are seriously deluded.

In 2002 I came back from living in St Lucia for 7 years. I was amazed at the level of spending, new premium cars and retail spending and knew straight away that something was wrong. When I recently saw the balance of trade figures I started to understand, we, as a natiion, were importing about £200 billion more than we exported (£270b on goods, £70b surplus on 'services' - i.e. banking). This has been financed by personal borrowing (equity release and loans/CCards) and government borrowing.

We have not yet started to address this issue, in fact I would expect it is getting worse, you can't, long term, consume more than you produce. Currently the government is overspending by about a third, so to get that in line they would need to cut government expenditure by about 25%, i.e. reducing social benefits and cutting civil servants.

If anyone really knows how to protect yourself from the developing crisis of national solvancy then please let me know, because I don't have a clue!

With you 100%, this country is insolvent, is headed for increasing insolvency and nothing is being done to address the problem. In fact what remains of income generating and productive capacity is still being preferentially shipped abroad. Reducing exposure to this flake economy wedded to the aim of maintaining high costs will be high on the list of reasons.

Edited by OnlyMe

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I saw something was wrong about house pricing in 2001 and at that point my £18k salary meant I couldn't afford to buy and felt colleagues buying grotty tiny terraced houses at the time were overstretching themselves. I remember confirming my gut feeling in 2001 with some graphs from a study from an academic in Cambridge about a housing bubble. 2 years later I found HPC.co.uk and never looked back from then.

Salary has nearly tripled since 2001 (probably no more than doubled on take home of course) but am no closer to buying in terms of salary multiples. But at least now the market is coming towards me.

What I didn't expect was the massive global state response to the crisis when it did break. This response has changed the time-frame for retrenching back to normality hugely. What would have taken through to 2012 is now going to drag out until 2015 or later - idiots!

What a shamelessly complacent t-sser Darling turns out to be. Can't even be bothered to regulate banks more. His plan is clearly ASAP make London the place to be again for the casino boys.

EP

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If anyone really knows how to protect yourself from the developing crisis of national solvancy then please let me know, because I don't have a clue!

I think there are a few people on here (or the other place) who might be able to help you...

Dr Bubb, or maybe CGNAO. :ph34r:

Just do a search for the EOTWAWKI threads.

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Saw it coming just after we moved in 2006 and thought this is crazy interest rates will crash the economy.

Little did I know that process had started in the US in 2005.

Although I'm prepare for what? As ultimately anything can happen and somethings you can't prepare for ie nuclear war.

The outcome is unknown so how you can prepare for that is beyond me.

I think you can prepare in so far as you can be watchful and ready to react to those things that can actually be reacted to, you can also make educated guesses, it's like playing poker, you can't really predict the next card but you can still play with the odds rather than against them. Some things of course are fully out of our control and I think anyone thinking they have a detailed plan that can survive reality is at this point deluding themselves.

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Thanks mainly to this site I began investigating what was going on.

I'm not too keen on debt so have very little, I presumed very wrongly everyone was the same. I couldn't work out how people with a lower income than me had so much more, better houses, newer cars, furniture, holidays abroad. I thought my housekeeping skills needed brushing up.

The real reasons were a bit of a shock, I never for a second thought it was all borrowed money. Well, the braggarts don't tell you it's all on tick now do they?

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I saw it coming but I didn't expect it to get this bad. I was hoping it would have been brought to an end early in 2005 but the government decided to push it to it's limit to the predictable conclusion.

One thing I did doubt 2-3 years ago was when I showed my hand to a chosen few people they all said the Government wouldn't let it happen (in particular house prices dropping) my opinion then and still now is there isn't really a great deal they can do but the lengths they have gone to has been the most surprising to me. All totally pointless.

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I sensed something coming, but the ferocity of the last year took me by surprise.

It was a bit like the .com boom. I remember thinking I was going mad. Everyone was sinking money into bizarre "eyeball" related ventures and I didn't get it. Where was the money coming from? If you were going to invest a few million, then you needed a plan to get cash flow.

With the last 10 years, it was again obvious that something was wrong. People believed that house prices had somehow detached from earnings and were pricing 15% capital gains per annum into their models. It had to break eventually. I considered BTL as an investment in 2003, but couldn't make the sums add up.

The problem is calling it. It went on for far longer than I imagined, and if I had geared up to act in 2004, 05, 06, 07, I would have lost heavily. Instead I became more conservative, hoarded cash, didn't increase exposure to the market. That bit, at least, was right.

I'd love to be able to say I sold my Barclays at £7, and bought the whole lot back at 50p. If I had, I would have jacked in work by now. Damn!

What I do know is that we are at the "end of the beginning" now. The financial system has just about been reset, most of the problems (in the UK at least) are probably exposed. We now have the grinding "middle" to get through, the proper recession in which we pay back the debt, either in cash terms, or by destroying the country financially. Then we can start recovery. That is a long way off.

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Oh, as a direct result of feeling a bit uneasy, and reading this site for a couple of years before signing up, I

- moved jobs to something alot more secure

- moved house from a BTL pwoperdee playing business landlord to a long term easy going landlord (also with an alternative secure job)

- changed my investment choices

- started aggressively paying down debts

- started stocking up on "sensible" items

The gloom is approaching fast, it's just everybody seems to be looking the opposite way.

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I'll readily admit that I'm amongst those who did not see a deep economic crisis coming.

I realised that the housing market was bubbling in 2002, and expected it to crash badly sooner or later.

However, I've been hovering around this site since 2006, but I failed to understand just how the housing market was tied into the larger economy. And I can't say that I wasn't warned :( but I tended to see some of the posts on this site as amusing tinfoil-hatted doom mongering. Oh well, lesson learned :lol:

By accident, I'm quite well prepared economically - my wife and myself made a decision about 3 years ago to trade money for skills, i.e. we're now skint but with vastly more valuable skillsets. The idea is that we want to be flexible both in terms of career and of country - a move to South America in the next 10 years is a distinct possibility.

A major reason for doing this is the pensions crisis - which I still see as the Big One.

And at least I did see this crisis coming - hell, I remember being at school in the 80s, our teacher was explaining a Population Pyramid to us and saying that when the Boomers hit retirement age the s*** would truly hit the fan. So I've been well forewarned on that one!

EDIT: speling.

Edited by DeepLurker

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I want a:

"It's not that bad, because nobody has started paying back the debt yet." option!

I sometimes (even now, ridiculously) look at peers and wonder ('cause I'm getting on a bit) how on earth thay can afford that car, that house, that...whatever, when I can't.

I earn fairly good money for where I live etc, have a couple of degrees and all that, and what led me to conclude that prices and economy as a whole had got out of control was exactly my failure to understand how people could afford it.

What I actually failed to understand was that most people are utterly daft, and a scramble for resources in the short-term is all they really comprehend. I genuinely feel sorry for a lot of these people, because to do otherwise is like laughing at a man born blind.

Someone on here has an excellent sig that points out that 50% of the population have an IQ below 100...what proportion of the population own houses?

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It was obvious as far back as far as the early 2000s.

The moronic media were repeatedly reporting with juvenile glee the rate of house price inflation.

Anyone who remembered the previous HPC could see the parallels and despaired at the public willingness to lap up the HPI propoganda.

My suspicion that something was wrong was cemented when the Money Programme ran that report on Liar Loans that Eric Pebble so rightly refers to.

In earlyish 2007 there was another report - I think it was the Money Programme again - sounding the alarm about the nature of modern banking and finance. The show came and went and yet again practically no-one paid attention.

I wondered in just exactly what way the bubble would inevitably burst and when the money markets seized up and Northern Rock hit the buffers it was obvious.

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I realized a few years ago that money was far from being the neutral utility for facilitating productive enterprise that previously I had assumed.

Through books and relevant websites I grew to understand how the whole world was in the grip of the debt-based money/banking system. To my mind the tail was wagging the dog, the parasite dominating the host, but I comprehended how an essentially unproductive but very clever minority controlled and virtually owned the rest of us.

Add in an initially reluctant but irresistable evidence-driven questioning of the anomaly ridden official 9/11 narrative and I saw that the world was all set to convulse radically.

We all try to interpret and understand the world. This is now much harder and more complicated than we might think. It certainly entails looking beyond the official virtual reality propaganda with which we are saturated constantly by the MSM.

We live in interesting times and much will change over the next few years. As someone with no particular inside knowledge I cannot be more specific but I feel strongly that it's not going to be pleasant.

"I am half sick of shadows," said

The Lady of Shalott.

by Alfred, Lord Tennyson

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When I couldn't save faster than house prices were rising around me ( me saving £1k per month building a deposit ) I knew something was wrong. Having bought a repo in '90 ( 1 bed flat 39k) which had cost the previous owner 55k. I was fully aware of what might happen. Took us 4 years to get back to 39k and the gf and I had gone our seperate ways previously. Average wage back then was about 15k from memory.

I think most bears were hoping for a correction in house prices but few wanted it to get as out of control as it has. The implications for letting it get totally out of hand could be that people who did the right thing and were prudent could be as badly affected as those who mewed and flipped.

Thats what bothers me the most.

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