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equitystasher

House Prices Falling + Qe2

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It has now dawned on the media that all the indicators are pointing to house prices falling again and that big falls could take place. The headlines must be pushing on sentiment and making policy makers review their options.

The big question now is how will the Bank of England respond to falling asset prices.

QE2 about to be fired up I fear.

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It's guaranteed IMHO - the only hope is if the government stop them and say "enough is enough, let's get the crash over with and start to build a proper economy". I live in hope, but I'm not holding my breath.

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This is one of my worst fears as it means I have to dabble in "stuff" more to keep the value of my cash.

QE1 kicked the can 18 months down the road...

Edited by Kazuya

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It's guaranteed IMHO - the only hope is if the government stop them and say "enough is enough, let's get the crash over with and start to build a proper economy". I live in hope, but I'm not holding my breath.

I'm currently discounting QE2 (although I'm well hedged against it with gold and CHF) since:

  • Its ideologically a socialist thing
  • Conservatives have in the past been prepared to inflict major short term pain for the greater good (at least when they are not too close to an election ..)
  • QE wont affect house prices much anyway (it was ZIRP that did that last time) even merv knows that

Having said that Its still a theoretical danger so long as IRs are so low and if it starts to look more likely then I will increase my hedge position.

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QE2 will happen, could be done unannounced as someone said earlier.

All Central Banks do is to carry on printing to infinity until the whole thing collapses in between, no one's got a crystal ball but market oracle article Mike posted yesterday was pretty good, something along those lines.

get ready, for inevitable

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I don't think it's a given. 10 year guilts are yeilding < 3%. The whole point of QE was to push down bond yeilds to stimulate borrowing. Yeilds are now VERY low (negative in fact, after inflation).

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I do not think the UK can afford QE2. I doubt the US can either.

Any QE2 would have to be part of a global strategy between us, the US and the EU countries.

But it would be an enormous u-turn for Cameron and Clegg.

I doubt we can afford it financially or politically.

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I do not think the UK can afford QE2. I doubt the US can either.

Any QE2 would have to be part of a global strategy between us, the US and the EU countries.

But it would be an enormous u-turn for Cameron and Clegg.

I doubt we can afford it financially or politically.

This guy doesn't seem to think so...

When the ball hits the ceiling fan, sometime early 2011 at the earliest, there will be massive bank runs.

I expect that the FED and other central banks will pre-empt such a run and will do the following:

1) Disallow cash withdrawals from banks beyond a certain amount, say US$1,000 per day; 2) Disallow cash transactions up to a certain amount, say US$10,000 for certain transactions; 3) Transactions (investments) for metals (gold and silver) will be restricted; 4) Worst-case scenario – the confiscation of gold AS HAPPENED IN WORLD WAR II. 5) Imposition of capital controls etc.; 6) Legislations that will compel most daily commercial transactions to be conducted through Debit and or Credit Cards; 7) Legislations to make it a criminal offence for any contraventions of the above.

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  • QE wont affect house prices much anyway (it was ZIRP that did that last time) even merv knows that

Agree, Zirp and deficit spending contributed to the housing bounce not QE IMO. Still unsure as to why our real estate market behaved so differently to the US though I suspect it is to do with the depth and liquidity of the US markets.

QE is for the banksters.

I think you should start a thread on this to put this misconception to bed.

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a bit of Hyperinflation might shake things up around here, a post-apocalyptic mad-max UK might prove more rewarding to participate in than benefits britain...

Imagine it; the lazy can be sent to fight in the Thunderdome, and the average house price will be down at 2 rifles and 6 cans of baked beans (seasonally adjusted).

Everything will be fine so long as 'The Man' doesn't sieze me-pot-o-gold before it kicks off!!!

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Especially the gold rampers who want hyperinflation.

Yes, as someone who has been tempted to hedge with gold but as of yet to delve in this statement did get me thinking. If you buy from somewhere such as ATS or similar then your passport / ID and address is stored; presumably against a record of what you purchased / sold.

I am assuming if the tin foil hatters do get what they say then if you've bought physical gold this way there is nothing stopping HM Gov - guns and all - from coming round to your house and taking said gold back.

Which sort of makes a mockery of holding physical gold unless you can conceal that you have bought any… which is hard to do in any substantial amount if you hadn’t started collecting gold coins 10 years ago

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Yes, as someone who has been tempted to hedge with gold but as of yet to delve in this statement did get me thinking. If you buy from somewhere such as ATS or similar then your passport / ID and address is stored; presumably against a record of what you purchased / sold.

I was under the impression that this is required only when purchasing a more significant amount i.e. >£5k of gold in one go.

If so then several purchases of say £3k of gold, in cash, over a period of time would protect the purchaser - total anonymity?

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Agree, Zirp and deficit spending contributed to the housing bounce not QE IMO. Still unsure as to why our real estate market behaved so differently to the US though I suspect it is to do with the depth and liquidity of the US markets.

QE is for the banksters.

I think you should start a thread on this to put this misconception to bed.

I agree, although I think many underplay the importance of the stamp duty 'holiday' in stoking demand too. It was when that came in that prices started to rise again and shortly after it was withdrawn that they started to fall again. Yes, I know it was reinstated in the March budget but only for FTBs and I also believe that anyone who was thinking of diving in already did so before what they thought was the deadline in December 2009. Most here would appreciate that the grand or two savings would not influence them to buy a vastly overpriced house - but to most of the housebuying public this was a once in a lifetime deal not to be missed!

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QE was a tool to try and recapatalise our insolvent banking system and bail out the indebted through holding down rates. We have the most highly leveraged banking system and the highest personal debt in the world due to a debt bubble which fed into everything with housing being the main bubble.

The QE smoke screen message was it was to be used as a tool to get lending moving but this was a cover story as we know from the results of where we are now. The banks are still insolvent and very few solvent customers want their loans.

As we have become more in debt, interest levels have become more critical and any small moves up would cause mass defaults because of the high levels of debt in the system. They are doing their best to keep rates artifically low to bail out the banks and indviduals whether we like it or not as the alternative is systemic collapse.

The one shot suger rush of the government stimulas is now running out with the effect of "growth" slowing and assets prices starting to fall again as we come back to reality. Now they will be looking for a excuse to push the QE2 button again.Falling house prices, slow or falling growth will be the excuse as before along with a excuse to counter Goverment austerity measures.

What the BofE would like to engineer is 5-6% inflation with assets like housing stagnant. Ie stagflation to get us out of this mess. Basically they are scared of deflation more than inflation. Their policy statements and actions should leave none of you in doubt of this and a change in government does not change this. They are prepared to throw the savers to the wolves to protect the system.

What I think we will see is futher nominal falls in house prices but not the big fall some of you expect. There just isnt enough forced sellers and they are fighting to keep it that way with low rates and QE used as a tool to keep real rates down.

As austerity measures come into effect next year it will cause higher unemployment and stagnant wages across public and private sectors. QE2 will be put into action and we will see even higher inflation in everyday items and the continued rubbish being spouted by the BofE of the deflation threat to justify their actions to the markets.

House price will be getting cheaper in both in small nominal terms and by inflation but there will not be general deflation and there will be general high inflation.

We are all going poorer.

I have 85% of my house fund in NS@I Index Linked Bonds. I have 10% which is currently in a cash ISA which is going tobe converted to self invest ISA and Il buy funds in the far east and il keep 5% cash for emergencies.

Buying a house will not protect against the coming inflation.

Edited by equitystasher

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  • 261 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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