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chris25

Bears Struggling From Mental Breakdown

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Anyone ever wondered how house prices can sustain a whole economy?

Look around. The people who have a lot of money on the whole, got there with property. If they are rich and have not gained their wealth from property directly, then they have most likely gained it indirectly from property through finance/banking.

And this is where the question comes from.

How on earth can selling houses sustain an entire economy, or should I say an entire western lifestyle?

I honestly see no way selling houses can create wealth en masse. It seems physically impossible. No one is making anything, no one is doing anything.

One would think the logical explanation would be the fact that property is merely creaming off profits from real wealth creating industries, and on its own would never be able to sustain an economy. Because housing demand would diminish if there were no wealth creating industries. Yet in the UK these wealth creating industries have virtually gone. Apart from oil and pills, the UK's manufacturing sector is finished.

But what is "wealth" creation?

Wealth is created when someone turns something useless or of little value into something of value to humanity, or something humanity can utilize.

For instance, if a country were to dig up iron ore, turn it into steel, then press it and turn it into a car chassis, then that country has just turned something of no apparent value to humanity, to something incredibly valuable for humanity. Thus "wealth" is created.

Yet how come we in Britain are all so rich when we don't do this? All we do is sell houses to each other. How can this work?

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....

Wealth is created when someone turns something useless or of little value into something of value ....

Correct, so thousands of people have a house worth 20 grand they can sell for 300 grand. Wealth has been created. They paid 20K in '85 now they can sell for 300K.

You have answered your own question.

If I bought a penny black stamp in 1800 ish (or whenever they came out) I would have paid 1D (0.4p). Now its worth 200K (or whatever - who cares?)

Rarity gives "value" and hence "wealth". Gold is another example. Its pretty worthless really. Its not even rare - its manipulated by governments who store thousands of tonnes of it for no real reason.

Modern day wealth is just some numbers on a computer screen. Switch off the electric and Bill Gates is bankrupt :D

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Modern day wealth is just some numbers on a computer screen. Switch off the electric and Bill Gates is bankrupt :D

that's an interesting concept.

what would all these mega zillionaries do if everything were reduced to caveman-style living??

Most of them couldn't hack it in a fist-fight for the next piece of edible roadkill.

there's only so far mind-games and manipulation will get you.

when it comes to the basics it will be brawn that beats brain.

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that's an interesting concept.

what would all these mega zillionaries do if everything were reduced to caveman-style living??

Most of them couldn't hack it in a fist-fight for the next piece of edible roadkill.

there's only so far mind-games and manipulation will get you.

when it comes to the basics it will be brawn that beats brain.

The problem is that all the mega zillionaires have big brutal minders. It will be them we fight for the road kill.

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Modern day wealth is just some numbers on a computer screen. Switch off the electric and Bill Gates is bankrupt :D

Dont you rememeber that series called Dark Angel? Terrorists detonated a nuclear bomb over America causing a massive electromagnetic pulse. It turned all the ones and zeros into just plain zeros and over night everyone become broke.

I remember one thing Max (the main character said) "I dont know why they call it a depression. Sure everyones broke, but no one seems that depressed." :lol:

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Wealth comes from that black stuff we pump out of the ground, It is wealth. The more we pump out, and the more efficient we are at putting it to use the wealthier we become. Money is the cogs that enables that system to operate so effectively.

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How on earth can selling houses sustain an entire economy, or should I say an entire western lifestyle?

Simple answer: it doesn't.

Just a variant of a pyramid scheme.

It has only helped fuel inequalities everywhere in our "civilised" countries.

It is enlarging the gap between the rich and the poor.

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