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House Price Crash Forum

How To Stop Worrying And Love The Debt


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We have had a fast crash. Have you noticed the GDP figures?

The pound hit bottom before QE was even mentioned (I think) and rose throughout. Unless you think that it's going to fall again. I must admit that this does confuse me somewhat, you would expect if to fall.

As someone who's as bearish as a very bear like bearish thing I don't think we've seen much yet. We are just in a bull trap now. The Gbp has been relatively strong recently as the US, EZ and Japan have been seen as in an even worse state the the Uk.....Gbp has been seen as "the leper with the most fingers" according to good old Max Keiser. I'm surprised it's come back so much but would see it as a good time to get out if now if I hadn't got out 2 years ago.

Anyway, would you take on debt now?

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Not really disagreeing, but isn't that rather the point?

"Dad, if I pay you back the money I borrowed, I'm not going to be able to buy many sweets."

"Correct, son."

Or...

"Dad, I'm afraid I can't pay you back that money I borrowed."

"Then there'll be consequences, son. The end of your deficit-funded sweet-spending, for a start."

"But what about the sweetshop owner, Dad?"

"It's called economic contraction, son. The economy will rebalance at a lower but healthier level."

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As Mish pointed out, you can't argue with Keynesians because whenever their stimuli don't work, their excuse is always that it wasn't early/big/protracted enough.

Actually, you can't argue with Keynesians because there aren't any. Keynesians would be funding stimuli from the surpluses they'd accumulated by applying fiscal brakes during the boom.

It's not valid to discredit the doctor when you rejected all but the nice-tasting medicine.

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Actually, you can't argue with Keynesians because there aren't any. Keynesians would be funding stimuli from the surpluses they'd accumulated by applying fiscal brakes during the boom.

It's not valid to discredit the doctor when you rejected all but the nice-tasting medicine.

Yep Keynes actually advocated saving money in the boom for the coming bust. Has any western govt done this?

Instead we get govts that give all the money back in tax breaks causing a boom or we have idiots who spend every penny and borrow even more during a boom and then think they can borrow even more during the bust to cover their own stupidity.

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Or...

"Dad, I'm afraid I can't pay you back that money I borrowed."

"Then there'll be consequences, son. The end of your deficit-funded sweet-spending, for a start."

"But what about the sweetshop owner, Dad?"

"It's called economic contraction, son. The economy will rebalance at a lower but healthier level."

That's my daughter. My son is more prudent - he borrows within his means (i.e. no more than next week's pocket-money). My daughter told me she had £10 in her money box and borrowed on that. Turned out to be 10p. She apparently will pay this back by not asking for money to join club-penguin for a couple of months. I can't make out if she's an idiot or a genius.

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Guest Steve Cook
In other words QE buys the country time to pay off the debt with future earnings with less pain. You still should pay off the debt while using QE and not ignore the problem, just spread the burden over a manageable period.

That nutter Brown seems to want to ignore the problem and keep spending as before while effectively borrowing into our future. It's the same as getting more plastic to avoid paying down your card debts, but on a trillion pound scale.

There will be no future growth

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