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A few weeks ago we found out that Moneyweek's MSW had bought a house despite years of telling us that house prices were going to fall. Fair enough, good luck to her.

In this morning's edition of Moneyweek she has a rather curious editorial -

But what would happen were the coalition to look as though it might break under the strain of a miserable electorate? We suspect the answer would be a huge outbreak of quantative easing (printing money to buy government bonds), so as to avoid having to make the cuts.

............

When people lose trust in Governments (as they might under such circumstances) the velocity of money goes up fast. Fearful of their currency losing value, people convert it into real assets as fast as they can, driving up nominal prices as they do so. Hyper-inflation can arise this way just as easily as it can from hectic bank lending. This isn't a forecast. Just a thought. But it's one that might explain why, even as deflation appears to be gripping the West, the gold price is still rising.

At first thought this is an argument to buy gold... but is it an insight into why MSW bought a house recently? Is it something for us to consider?

Edited by The Masked Tulip

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A few weeks ago we found out that Moneyweek's MSW had bought a house despite years of telling us that house prices were going to fall. Fair enough, good luck to her.

In this morning's edition of Moneyweek she has a rather curious editorial -

At first thought this is an argument to buy gold... but is it an insight into why MSW bought a house recently? Is it something for us to consider?

Yes.

Hyperinflation is the sum of all fears for the cash rich and the STRs/STMs/FTBs and the dream of every mortgaged to the hilt house buyer.

But on the other hand, how many people have large amounts of spare cash to throw at hard assets? We are the most indebted per-capita people on the planet so anything we throw around will be debt backed and credit contraction is said to be coming soon as banks face another round of failures if something is not some to stop irresponsible lending (giving large mortgages on houses that will probably drop in value 20-40% over the next couple of years if the credit crucn re-emerges).

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Good post. This is precisely why I didn't have the balls to STR even though I thought (and still do think) it would make financial sense in a sensible environment. I just don't trust any Government to be sensible and not print.

Conversely, I think it's an awful time to buy back in now.

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It just crossed my mind that, if you follow her reasoning, then assets could well include property and in a QE situation would not people move to property?

Is this not what we have seen in the past year and a half under Brown - IRs driven to zero on savings, inflation eroding savings and so the upturn in house prices in some parts of the UK?

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I can't see a crack up boom happening. IMO if the this government breaks down we will see confidence in UK plummet and interest rates on UK debt go through the roof which obviously means rising inflation, this would instantly wipe out the reason the BOE is keeping rates low. Temporary factors are now irrelevant in the face of this. So surely this would cause a rapid increase in IRs? Wiping out just about any who bought in the last three years.

As RB said, how many people left are still cash rich? Enough to push up house prices? In the face of mass repossessions? I doubt it.

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If people begin to fear debt, which underpins the entire monetary system, the game is up. Which is why I err on the side of inflation.

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I just sense a change in Moneyweek's stance on housing - began sensing it several months ago/earlier this year.

Perhaps it was just me reading between the lines of the Editorials but when, a few weeks back, MSW then announced she and her hubby had bought a house it did not come unexpected to me.

Now, again it could be, but this editorial seems like another warning sign that we might end up in a sudden bout of inflation which sees savers wiped out even more - if possible - and assets, and houses are hard assets, soaring.

Gosh, this is so damn complicated isn't it. The decisions people make now can be destructive for decades to come - and no one truly knows which way to go.

I have to say, in my entire life, I have never known such uncertainty as now about how best to defend yourself economically. Even in the 1980s, when unemployment was devastating in many parts of the country, there was actually more certainty than though... and that is saying something.

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I've said this before...

Cash is losing you between 3 and 5% a year depending on your personal inflation rate. Equities seem a little challenging right now. Companies that were "blue chip" 3 years ago have been exposed as high risk. Property is expensive, but it won't get wiped out. Compared to someone who bought BP at £7 or so, housing looks pretty tame. Do we think a 50% fall in housing is likely? I certainly don't. 20% is quite probable, 30% is possible, but 50% is deep into armageddon territory that a government will try anything to avoid.

Exposure to property as part of a balanced portfolio is pretty rational. Getting into debt to buy property is insane.

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A few weeks ago we found out that Moneyweek's MSW had bought a house despite years of telling us that house prices were going to fall. Fair enough, good luck to her.

In this morning's edition of Moneyweek she has a rather curious editorial -

At first thought this is an argument to buy gold... but is it an insight into why MSW bought a house recently? Is it something for us to consider?

Isnt this what the site has been considering? Certainly since i came across it there seems to be 3 distinct camps

1) 70s style inflation

2) Hyperinflation - Crack up boom

3) Asset Price deflation then inflation

If you think its 1 then buy a house

If you think its 2 then leave the UK

If you think its 3 then keep the money in cash (preferably out of sterling)- this is the camp i reside in and anyone in this camp who is STRing should be well aware that as well as inflation risk they carry the additional risk of their Bank failing and only getting back the guaranteed state monies. If you have a substantial amount then it is alot to potentially lose, far more than property could potentially lose you

3 is a very dangerous camp to be in and anyone in it has to understand these risks (for this reason people buying property for investment/seems a pretty rational move and why this housing rally should have been seen as possible) but it can also be a highly rewarding camp to be in if it happens.

You pays yer money you takes yer chances, so far 3 has been the right camp to be in personally, UK property is down nearly 40% so far and the imbalance of cost vs wages hasnt even started to be addressed but it could easily all go Pete Tong so a fallback safetynet is important for any STRer i thnk

Edited by Tamara De Lempicka

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Stop reading moneyweek.

Use your saved subs to stock up on tinned tuna and toilet rolls.

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A few weeks ago we found out that Moneyweek's MSW had bought a house despite years of telling us that house prices were going to fall.

It wasn't just her. Andrew Oxlade editor of thisismoney.co.uk bought this week as well.

So sorry fellow property bears, like Merryn Somerset Webb of the FT and Money Week (another arch bear), I'm selling out and buying in. For those with the patience to see this through, I wish you luck.

- Andrew Oxlade, Editor

Link

Time to buy maybe? Seems those in the know are.

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It wasn't just her. Andrew Oxlade editor of thisismoney.co.uk bought this week as well.

Link

Time to buy maybe? Seems those in the know are.

Makes you think.

Edited by The Masked Tulip

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Hyperinflation will utterly destroy the economy, savings, pensions, everything.

I think they are amd enoug to try and encourage a situation that will produce it. I think that the economic fallout will be so bad that the cost of housing will almost immediately become irrelevent.

We have already had hyperinflation in housing and look at the mess that has caused - image that across EVERYTHING.

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I've said this before...

Cash is losing you between 3 and 5% a year depending on your personal inflation rate.

NS&I returns 1% tax-free in real terms (if you believe RPI, which I think is good enough).

And the money wont be leveraged and used to provide mortgages.

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NS&I returns 1% tax-free in real terms (if you believe RPI, which I think is good enough).

I don't believe RPI and they're effectively offering me 3.5% or so for a 3 or 5 year lock up. Tax free certainly helps though, might be worth emptying the bank account in this direction!

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Good post. This is precisely why I didn't have the balls to STR even though I thought (and still do think) it would make financial sense in a sensible environment. I just don't trust any Government to be sensible and not print.

Conversely, I think it's an awful time to buy back in now.

If the banks go under (with no possibility of futher bail_outs) can you imagine your mortgage/accounts being taken over by Asians or Arabs buying out the banks for a pound?

Is there a market for lopped-off hands for missing any payments?

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Questions -

(a) Did she buy outright, i.e. no mortgage?

(B) If mortgaged, what length of fixed rate did she get (and what amount for)?

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Hyperinflation will utterly destroy the economy, savings, pensions, everything.

I think they are amd enoug to try and encourage a situation that will produce it. I think that the economic fallout will be so bad that the cost of housing will almost immediately become irrelevent.

We have already had hyperinflation in housing and look at the mess that has caused - image that across EVERYTHING.

http://www.greenenergyinvestors.com/index.php?showtopic=4058&st=1000&p=173774entry173774

The graph says it all really, bring on the hyperinflation :o

001zxm.jpg

Edited by Confounded

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http://www.greenenergyinvestors.com/index.php?showtopic=4058&st=1000&p=173774entry173774

The graph says it all really, bring on the hyperinflation :o

001zxm.jpg

This isn't the 70's is it?

Now there is absolutely no bargaining power. We can all lose our jobs ad inifitum if we price hem out of the global market.

Under such circumstances like I said, hyperinfation would be sudden death to wealth in this country. Even very low infation rates would do the same but over a longer time period.

Edited by OnlyMe

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According to this:

ta.jpg

back.jpg

From the favorite charts thread, it is time to buy now.

Perhaps that's why Moneyweek's MSW and thisismoney's editor Andrew Oxlade have both just bought in.

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  • 152 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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