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http://www.housepricecrash.co.uk/newsblog/2010/07/blog-a-slow-decline-29445.php

I am sick of people pushing "Deflation", what the US is suffering is NOT deflation (a monetary phenomenon where the value of currency rises relative to the value of goods and services) it is a Devaluation (where the price of overvalued goods and services fall to a level closer to their real market value). The Federal Reserve made money cheap by lowering interest rates and making loans to those with no real ability to sustain them long-term. Money flooded into the housing and financial markets producing artificial price inflation. Wall Street compounded the problem be producing fraudulent investment vehicles that reduced their exposure to the risk of default by passing it on to other investors.

ALL the politicians and banks are at fault, not just Democrats, Republicans, Labor or Conservatives. The Banks (Fed, ECB and BoE especially) created the problem to get the politicians the money to pay for the votes of their respective ignorant electorates, knowing that the debt cycle was running out anyway and the world economic system would need rebuilding in the near term.

The world's currencies are "Credit Money" not "Fiat Money", Governments create Fiat-money out of thin air, a practice which is not inherently inflationary or deflationary (that depends on the amount produced). Credit-money is where governments "Barrow" money, at interest, from the banks which themselves create it out of thin air. Credit-money is inherently inflationary because the banks get the interest (about 3% historically in the US) every year. In 33.3 years the value of the money borrowed has been returned but you still owe the principle AND the interest continues to pile up, causing you to borrow more, and more, and more, ad infinitum. Such a system is inherently unstable over time and will need to be replaced, but the controllers of such a system use it to obtain vast amounts of real wealth while the system works, putting them in a position to control what will replace it, and eventually, everything else.

Meanwhile, those who don't understand the system will fight each other like a pack of wild dogs, while the people at the top gather an ever larger share of the nation's, and indeed the world's resources for themselves and their friends. "Money" my friends, is a fiction, something that exists only in the minds of human beings. Money can, and has been everything from Gold and Silver to tulip-bulbs, carved rocks, sea-shells and darn-near everything else, because, for money to work we only have to believe it has value. Money just lets you trade your labor for another persons. A "Dollar" is just an idea, a "Pound" or a "Euro" or anything else is just something you believe in, not a law of nature. Until we all understand the problem, the problems will continue.

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Deflation (a monetary phenomenon where the value of currency rises relative to the value of goods and services)

Devaluation (where the price of overvalued goods and services fall to a level closer to their real market value).

Those two things are the same. The causes may differ, so i suppose it's not unreasonable to make some sort of distinction, but they both describe the same change in relative 'value' of a thing priced in a currency.

Or are you saying in the case of "devaluation" the original increase in 'price' to the overvalued level was not inflation, but "upvaluation" or some such alternative term? and how would you make that distinction?

Edited by pilchardthecat

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Yes, good post, although he is behind the curve on money; it was credit backed until a couple of years ago. Now we're back to arbitrarily created paper.

The point below is spot on IMO and what I find most distressing.

Meanwhile, those who don't understand the system will fight each other like a pack of wild dogs, while the people at the top gather an ever larger share of the nation's, and indeed the world's resources for themselves and their friends.

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Yes, good post, although he is behind the curve on money; it was credit backed until a couple of years ago. Now we're back to arbitrarily created paper.

The point below is spot on IMO and what I find most distressing.

A curve is a curve because there are people in front of and others behind the curve.

Those ahead of the curve are no worse or better than Kings of England in the past who have ravaged other countries.

Why be distressed with something you have little control over?

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Money is not a figment of the imagination. It is a commodity, the universal commodity of exchange.

A universally accepted claim on goods and services. Money is the universal token of barter.

It is only universally acceptable because it has certain properties :

1. fungible

2. divisible

3. durable.

4. non-counterfeitable

5. desireable

6. low industrial demand

7. portable

etc etc

When you take all those properties into account there are very few commodities that qualify as money.

Gold has more of these properties than any other substance known.

Fiat only becomes currency due to the coercion of the legal tender laws. ie govts FORCE the money

onto you by fiat decree. In a free market participants would choose the best currency that meets

most of the properties of money, and they would choose gold. When this fiat paper ediface collapses,

as it will as sure as the sun rises, then gold will still be left standing, as it always has.

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Don't really believe in deflation anyway - shop prices are up from a year ago. Devaluation - against what? USD certainly not 'devalued' against GBP compared

to a year ago...

Against specific item then depending on which one. Against a basket of the day to day good, then yes of course.

http://www.housepricecrash.co.uk/newsblog/2010/07/blog-a-slow-decline-29445.php

I am sick of people pushing "Deflation", what the US is suffering is NOT deflation (a monetary phenomenon where the value of currency rises relative to the value of goods and services) it is a Devaluation (where the price of overvalued goods and services fall to a level closer to their real market value). The Federal Reserve made money cheap by lowering interest rates and making loans to those with no real ability to sustain them long-term. Money flooded into the housing and financial markets producing artificial price inflation. Wall Street compounded the problem be producing fraudulent investment vehicles that reduced their exposure to the risk of default by passing it on to other investors.

ALL the politicians and banks are at fault, not just Democrats, Republicans, Labor or Conservatives. The Banks (Fed, ECB and BoE especially) created the problem to get the politicians the money to pay for the votes of their respective ignorant electorates, knowing that the debt cycle was running out anyway and the world economic system would need rebuilding in the near term.

The world's currencies are "Credit Money" not "Fiat Money", Governments create Fiat-money out of thin air, a practice which is not inherently inflationary or deflationary (that depends on the amount produced). Credit-money is where governments "Barrow" money, at interest, from the banks which themselves create it out of thin air. Credit-money is inherently inflationary because the banks get the interest (about 3% historically in the US) every year. In 33.3 years the value of the money borrowed has been returned but you still owe the principle AND the interest continues to pile up, causing you to borrow more, and more, and more, ad infinitum. Such a system is inherently unstable over time and will need to be replaced, but the controllers of such a system use it to obtain vast amounts of real wealth while the system works, putting them in a position to control what will replace it, and eventually, everything else.

Meanwhile, those who don't understand the system will fight each other like a pack of wild dogs, while the people at the top gather an ever larger share of the nation's, and indeed the world's resources for themselves and their friends. "Money" my friends, is a fiction, something that exists only in the minds of human beings. Money can, and has been everything from Gold and Silver to tulip-bulbs, carved rocks, sea-shells and darn-near everything else, because, for money to work we only have to believe it has value. Money just lets you trade your labor for another persons. A "Dollar" is just an idea, a "Pound" or a "Euro" or anything else is just something you believe in, not a law of nature. Until we all understand the problem, the problems will continue.

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Hope you enjoy eating it :D

What will you eat your £20 note salad with? Would you like it peppered with gold nuggets Sir?

As an aside, not a joke: at the Savoy a couple of years ago they served steaks covered with gold leaf. For City boys only.

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A curve is a curve because there are people in front of and others behind the curve.

Those ahead of the curve are no worse or better than Kings of England in the past who have ravaged other countries.

Why be distressed with something you have little control over?

It is not meant to be that way. If the majority stopped watching X factor and blaming each other over the lack of crumbs left, then perhaps it might be able to do something about it. I find it distressing.

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>as it will as sure as the sun rises, then gold will still be left standing, as it always has.
Nahh oil has has more value as a currency than gold. Admittedly it is less portable, another alternative would be lithium. You want something with more purpose and preferably less common than gold... Edited by AteMoose

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Nahh oil has has more value as a currency than gold. Admittedly it is less portable, lithium would be better than gold?

No no no. You can't eat oil therefore it can't be a currency.

And oil has done really badly in the 80s and 90s so it's the last thing you'd want as an investment :blink:

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When this fiat paper ediface collapses,

as it will as sure as the sun rises, then gold will still be left standing, as it always has.

Hope you enjoy eating it :D

I don't suppose it's any less tasty than a computer screen that says "GBP 10,000"

Inflation: bad for HPcers

Deflation: Mighty good for HPCers.*

_______________________

*Kin awful for those who are invested in gold. :(

Why is deflation bad for those invested in gold? Prices fall - including the price of gold. I get less GBP for my gold coin, but that's OK because i need less GBP to buy the same amount of stuff.

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Hope you enjoy eating it :D

I've heard those £20 pieces of paper taste good with some ketchup ;)

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I don't suppose it's any less tasty than a computer screen that says "GBP 10,000"

Why is deflation bad for those invested in gold? Prices fall - including the price of gold. I get less GBP for my gold coin, but that's OK because i need less GBP to buy the same amount of stuff.

Depends on mass psychology for one thing. Gold is nice to have as a hedge - I had positions in gold miners even during the 90s, but don't go overboard.

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I've heard those £20 pieces of paper taste good with some ketchup ;)

It's worse than that - here., eat this:

£1,000,000

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  • 145 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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