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Rinoa

Rising Unemployment = Falling House Prices...

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Fail

Read again, what caused the economy to boom in the first place. Then you have the cause of the recession

And the boom was stopped by raising IR's, which caused house prices to fall when people couldn't affford to buy.

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I'm looking at the indices, don't you believe them now?

Prices have been falling for quite some time, what we have now is a lull. Things can go either way, either we are in the midst of the start of an economic recovery or falling prices will continue.

You clearly think this is a recovery and debt mountains don't matter.

Time will tell who's correct.

Have you taken on any more debt over the past couple of months to do your bit for the recovery? You must believe in perpetual debt.

How's your future £1.38bn house going?

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That's just a weak and convenient bear excuse completely without foundation or any facts to back it up.

You don't think this is the first ever economic bubble in the history of Capitalism, do you?

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Please prove that there is a correlation.

Prove that there isn't

Well, the onus was on you - who postulated the hypothesis - to prove it, but I will simply say that there are several mitigating factors other than high interest rates that can lead to recession. Plus - interest rates have been at historical lows for the last decade or so anyway. Please see the attached graphic for periods of high interest rates (relative to the years immediately before them) that do not correspond to recessions.

Interest rate hikes gradually erode the ability to service mortgage debt. Unemployment has a much more immediate effect.

So why isn't it affecting prices currently?

Because of historically low interest rates (but for how long?) and because there is a lag time between being made redundant and being reposessed - when savings have been depleted.

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Edited by RajD

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