Jump to content
House Price Crash Forum

Tig


 Share

Recommended Posts

The negotiations between the rich and the poor over the next few generations will be fascinating.

It is in the rich's self interest to share enough with the poor that the poor don't take what they need to survive by force.

It is in the poor's self interest to not ask for so much from the rich that they decide to leave for a less redistributive society.

My expectation is that both sides are too foolish to understand their own self interest and that we will see a small number countries with small populations with a lot of wealth because they actively recruit wealthy people (Switzerland, Luxembourg, Singapore, New Zealand etc) and a large number of countries with large populations with no wealth as they actively pass laws which rich people won't accept (the UK, the USA, France etc).

By its nature, democracy is not an efficient way to carry out the negotiation between rich and poor because fo wealth distribution.

Doesn't the interdependence run a bit deeper though. The 'rich' are mostly rich in paper wealth of various sorts, the value of this paper being utterly dependant on the ability of the issuing society to both recognise them as valid and if required supply hard assets in return for these paper claims.

What seems to be happening is that more and more paper claims are being stacked up on a diminishing group of counterparties whose ability to deliver on those paper promises is hampered by the efficiency with which their production is captured by the owners of the paper claims and thereby transformed into further claims, leading to further capture ect. ect.

So unless some means is found to allow the targets of those claims to retain enough wealth to make good on those claims then the 'rich' are left holding a worthless collection of IOU's backed by sweet FA.

So your plan whereby the wolves up sticks and move to a land far from the sheep has a fatal flaw.

Edited by wonderpup
Link to comment
Share on other sites

  • Replies 91
  • Created
  • Last Reply

Top Posters In This Topic

Top Posters In This Topic

Yes, I'm glad you agree with me that free markets are essentilly a paradox that don't exist as they tend inherently towards corruption :)

The level of corruption correlates much more with the political system than with the economic system. Dictatorships tend to be much more corrupt than democracies. It doesn't matter if a country leans left or right.

Luckily, countries with lower corruption tend to be more efficient, and get richer, and more powerful, than corrupt countries. Hence the wealth and power of the western liberal democracies.

What we have witnessed in this past century was a Darwinian selection process. The liberal democracies have won. It is the best system.

Of course they have to be regulated, but competently.

BTW, that was Labour failure. They messed it up - very badly indeed. (Particularly re. monetary policy, particularly since Brown the [email protected] tampered with the inflation index in Dec 2003... you know the story... I am sure you are all tired of reading that from me. Sorry.)

Yes, regulation is essential, of course!

Link to comment
Share on other sites

If credit fuelled asset prices collapsed, it would be a good thing though, in the long run. I can imagine it causing chaos in the short term, as any secured lending (including that for businesses) would become much harder to attain. In the longer run, this adjustment must be made though, IMO.

Agreed. The longer the inevitable is put off, the deeper the pain will be.

Link to comment
Share on other sites

The banksters played the government for fools; they got their freer market, while maintaining the state's backing for when they f**ked up. That is the worst situation of all - bad policy and regulation. Either regulate the banks tightly* or free them to live or die by the sword.

Re your second point, the wealth has centred in the land owners and the bankers. Had the banks been allowed to fail, the wealth would have been redistributed. As for the monopoly on land, people seem to be completely ignorant of the issue.

* Which is impossible with banking in its current form, IMO.

Just a question Traktion, when you say "banksters ", do you mean the banks' owners (shareholders) or high level employees (directors)?

Link to comment
Share on other sites

Doesn't the interdependence run a bit deeper though. The 'rich' are mostly rich in paper wealth of various sorts, the value of this paper being utterly dependant on the ability of the issuing society to both recognise them as valid and if required supply hard assets in return for these paper claims.

What seems to be happening is that more and more paper claims are being stacked up on a diminishing group of counterparties whose ability to deliver on those paper promises is hampered by the efficiency with which their production is captured by the owners of the paper claims and thereby transformed into further claims, leading to further capture ect. ect.

So unless some means is found to allow the targets of those claims to retain enough wealth to make good on those claims then the 'rich' are left holding a worthless collection of IOU's backed by sweet FA.

So your plan whereby the wolves up sticks and move to a land far from the sheep has a fatal flaw.

The rich (and I mean the actual rich not those who think that they are rich), tend to own things rather than claims.

A lot of the movement in commodity prices lately reflect the preference for things over claims as the odds of claims being honoured in real terms over time are falling. It is better to lose 50% of wealth by being too cautious than 100% by not being cautious enough.

The rich tend to spread the things that they own far and wide and keep as little as possible in the country in which they live so that they can walk away at little cost if needed.

Link to comment
Share on other sites

The level of corruption correlates much more with the political system than with the economic system. Dictatorships tend to be much more corrupt than democracies. It doesn't matter if a country leans left or right.

Luckily, countries with lower corruption tend to be more efficient, and get richer, and more powerful, than corrupt countries. Hence the wealth and power of the western liberal democracies.

What we have witnessed in this past century was a Darwinian selection process. The liberal democracies have won. It is the best system.

Of course they have to be regulated, but competently.

BTW, that was Labour failure. They messed it up - very badly indeed. (Particularly re. monetary policy, particularly since Brown the [email protected] tampered with the inflation index in Dec 2003... you know the story... I am sure you are all tired of reading that from me. Sorry.)

Yes, regulation is essential, of course!

and where are these competent regulators

Link to comment
Share on other sites

possible to elaborate ?

The freedom to pack a couple of suitcases and leave wherever you happen to live is a very valuable asset if you ever need it. The need to do so would be as a result of some extreme outcome. Examples which have impacted my wider circle include the Russian revolution, the rise of Mao, nationalisation, foreign exchange controls, Central European communism and the results of the Weimar Republic.

In some cases, those impacted were able to thrive after they moved. In some cases, people were either trapped or destitute after they left.

My way of seeing the world is to try to decorrelate the very low probability, high impact events as much as possible.

For example, I do not want risk to fixed assets in this country as they are very illiquid, easily taxable, exposed to the dire financial situation in this country and likely to be collapsing in price if I want to leave. I also need somewhere to live which poses a bit of a conundrum.

A solution is to consider multi-family, residential REITs with some geographic diversification. This gives me an income stream as well as the ability to take on some non-recourse debt by looking at the capital structure of REITs in case my deflation view is incorrect. With the price / rent disconnect in this country, I only need to invest about 1/2 of the cost of the type of house that I want to live in to earn an adequate after tax income to pay for my rent with, in my view, a less risky investment.

Of course, in a mad max world, all correlations go to one so I will still suffer from a lot of financial pain but less than I otherwise might.

This isn't about having a tin foil hat view of the world. Rather it is about protecting against hugely unlikely but massively damaging outcomes if it can be done at little or no cost. I also accept that I am probably more willing to give up on some "quality of life" intangibles than others. The history of those around me probably makes me fear some of the bad things that seem to happen quite quickly in rare circumstances than some might consider rational.

Link to comment
Share on other sites

A serious question.

When the last remaining public sector workers have been set alight on their crosses;

After the all the boomers, elderly and sick have been culled;

Once all the poor, disenfranchised youth and unemployed have been ground down and turned into cattle feed........

Who do the bankstas and elites deflect the blame against next?

The Self Employed?

Mormons?

Dinner Ladies?

Men with beards?

Simon Cowell?

Will YOU be the subject of their propaganda for the ignorant?!? We were once told to “follow the money”, however the only things people tend to follow these days are false headlines and witch hunts.

The funny thing about witch hunters, was that often they didn’t actually do any of the burning. They just pointed at their chosen victims, and just let the mob deal with the grisly rest. How pertinent.

One day the people will wake up and work out the root cause of all our predicaments, and the root cause will be jettisoned from our society.

I hate posts like these, its just so ironic.

You are complaining that the bankers are using the little people as a scape goat while you are basically laying the blame on 'them' whoever that is for the fact that you live in a broken society where popping out kids and faking a disability or happening to be old and therefore having bought a house at a reasonable cost is the best and only way to riches.

A society where it is basically impossible to work hard and succeed because half your money is taken in tax to pay for the first lots lazyness and the other half given to your boomer landlord to pay for his.

Fvck off

Its not the bankers fault at all. OK maybe a little bit but all they do is take advantage of the crappy broken system. What this country needs is a little free market reality and a stop to all levels of government over-interference.

If the bankers truely ruled the world it would be a much fairer place where people are rewarded for the work they do and the risks they take . Personally i'd vote for a banker before a socialist boomer any day

Edited by Ben from Dover
Link to comment
Share on other sites

Do you mean the banks' owners (shareholders) or high level employees (directors)?

Can't answer that, can you? B)

Not a simple answer. Share holders want their returns, the directors want their short term profits. Does the end justify the means?

End of the day, the Directors can walk wawy with their payoffs, and the shareholders end up with nothing (ie pretty much what happened to Cattles).

Link to comment
Share on other sites

I hate posts like these, its just so ironic.

You are complaining that the bankers are using the little people as a scape goat while you are basically laying the blame on 'them' whoever that is for the fact that you live in a broken society where popping out kids and faking a disability or happening to be old and therefore having bought a house at a reasonable cost is the best and only way to riches.

A society where it is basically impossible to work hard and succeed because half your money is taken in tax to pay for the first lots lazyness and the other half given to your boomer landlord to pay for his.

Fvck off

Its not the bankers fault at all. OK maybe a little bit but all they do is take advantage of the crappy broken system. What this country needs is a little free market reality and a stop to all levels of government over-interference.

If the bankers truely ruled the world it would be a much fairer place where people are rewarded for the work they do and the risks they take . Personally i'd vote for a banker before a socialist boomer any day

Seriously, WTF are you on? At least you got the ironic bit, or did you?

Link to comment
Share on other sites

That is why you need to prepare yourself well ahead of time.

Owning anything in the country in which you live is a bad idea.

Parts of my family and our extended circle have learned this lesson very well over the last three generations.

Absoultely. But returning to the point you made -- that "both sides are too foolish to understand their own self interest" -- the UK doesn't lose anything by wealthy people departing and falling back on their non-UK wealth (okay, it loses skills/spending-power/tax but in terms of its own productive resources ... they're all still here).

The UK's self-interest is not to have people leaving while still making claims on its productive capacity, and that's entirely under the UK's own control.

Link to comment
Share on other sites

Seriously, WTF are you on? At least you got the ironic bit, or did you?

Got the irony, I just assumed your point was still blame the bankers and that all these poor little people are just being made scapegoat by them.

If you meant that ironically than I take it all back.

However it is not the banker's fault and blaming these misterious 'bankers' just means that you don't have to feel bad about the society you have helped to create.

My clients at work are mostly bankers and from the people I meet I just see very inteligent people working extremely hard to try and make something of their lives but who get clobberred by high taxes and crazy government policies which make it impossible for people not already on the housing ladder (read snake) to make any real success in their lives.

Edited by Ben from Dover
Link to comment
Share on other sites

Absoultely. But returning to the point you made -- that "both sides are too foolish to understand their own self interest" -- the UK doesn't lose anything by wealthy people departing and falling back on their non-UK wealth (okay, it loses skills/spending-power/tax but in terms of its own productive resources ... they're all still here).

The UK's self-interest is not to have people leaving while still making claims on its productive capacity, and that's entirely under the UK's own control.

Quite. LuckyOne's strategising rather relies on the fact that governments won't tax or confiscate property or nationalise corporations.

Or rather, that there is a government somewhere that won't.

The bond markets operate under the same logic. There's always a safe haven. Except last time there was a big hoo-ha, the safe havens charged foreign holders of debt a negative rate to hold their debt (switzerland, late 70s). Because they could.

Basically he is saying he assumes there will always be an administration that will prioritise the needs of the few over the many, and of foreigners over domestics and that these places will have sufficient global clout to defend those interests.

I'll agree that has been the case for the last couple of hundred years but certainly over w wider historical viewpoint the outlook for this kind of escape route looks rather bleak, unless you happen to be a warlord.

Link to comment
Share on other sites

Just a question Traktion, when you say "banksters ", do you mean the banks' owners (shareholders) or high level employees (directors)?

Probably both. If the government said you could have more freedom to gamble, but they would bail you out if you messed up, wouldn't you be keen on the idea?

Link to comment
Share on other sites

Not a simple answer. Share holders want their returns, the directors want their short term profits. Does the end justify the means?

End of the day, the Directors can walk wawy with their payoffs, and the shareholders end up with nothing (ie pretty much what happened to Cattles).

Exactly!

Some banks' directors, the real right [email protected], walked away with their bonuses and pensions (millions of pounds).

But the banks' owners, the shareholders, lost virtually everything. From rich Rothschilds all the way down to lowly pensioners (funds), millions of people lost billions of pounds.

So, firstly, it was not exactly an "elite vs masses" thing. Rich shareholders lost billions too.

2nd point, most important: these directors got away with millions, but the shareholders lost billions. There is an order of magnitude gap there - millions vs billions.

So, where is this money then? Where have all the billions gone?

.

Edited by Tired of Waiting
Link to comment
Share on other sites

The freedom to pack a couple of suitcases and leave wherever you happen to live is a very valuable asset if you ever need it. The need to do so would be as a result of some extreme outcome. Examples which have impacted my wider circle include the Russian revolution, the rise of Mao, nationalisation, foreign exchange controls, Central European communism and the results of the Weimar Republic.

The wife and I arrived back here five years ago after many years abroad. Not easy to say the least to give up our whole way of life and come back to a hostile family.(we came back to look after my Mum)

The key for us was having cash, most problems can be solved by throwing money at them. We did indeed arrive with 2 suitcases but around 20 boxes arrived later by sea mail...clothes, tools and Knicknaks. Once you've done it once you can do it again more easily I think. Sometimes you just have to walk away.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.