Jump to content
House Price Crash Forum
Milton

The Downing Street Letters: Fred Harrison.

Recommended Posts

Considering recent comments by Brown in the Media, I thought 'The Downing Street Letters' deserve to be posted on the Forum again.

[For those who missed them]

The Downing Street Letters

Contains such 24CT GOLDEN NUGGETS as: [page 9]

4th November 1997

10 Downing Street.

Alistair,

..........New Labour did not choose to respond to my invitation to assist in developing a new fiscal strategy.......

The Result however is an economic strategy that will fail, there will be a housing boom and bust in this parliament, and an even greater one in the next parliament.......

Yours Sincerely,

Fred Harrison

http://renegadeecono...brown-read.html

The Downing Street Letters… that Gordon Brown doesn't want you to read

In 1997 Fred Harrison wrote to Tony Blair and his Ministers: "I am your worst nightmare. I know exactly why New Labour will fail".

For ten years Harrison identified for Gordon Brown the policies that could prevent the next boom bust.

Brown failed to adopt the reforms.

Instead, he fostered the state of denial that led Blair's spin doctor, Alistair Campbell to write: "Dear Fred, I am a little bemused as to why you believe this country's economic policy is 'a shambles'."

Brown and his Chancellor Alistair Darling, through the strategies in their budget on Wednesday, are using the same technique to camouflage the policy failures that will deepen the depression.

The Renegade Economist team is releasing the letters that the Prime Minister doesn't want you to read because they establish his guilt as the architect of the worst recession in Britain since the 1930's. Read and judge for yourselves.

They knew. They were warned again and again.......

The Architects of New Labour should all be hung from Tower Bridge

Edited by Dan1

Share this post


Link to post
Share on other sites

Considering recent comments by Brown in the Media, I thought 'The Downing Street Letters' deserve to be posted on the Forum again.

[For those who missed them]

The Downing Street Letters

Contains such 24CT GOLDEN NUGGETS as: [page 9]

http://renegadeecono...brown-read.html

They knew. They were warned again and again.......

The Architects of New Labour should all be hung from Tower Bridge

They new and they purposely ruined us, so the working/middle class wealth could fall into the supper elites pocket. Big mistake!

Share this post


Link to post
Share on other sites

Considering recent comments by Brown in the Media, I thought 'The Downing Street Letters' deserve to be posted on the Forum again.

[For those who missed them]

The Downing Street Letters

Contains such 24CT GOLDEN NUGGETS as: [page 9]

http://renegadeecono...brown-read.html

They knew. They were warned again and again.......

The Architects of New Labour should all be hung from Tower Bridge

...did this ever hit mainstream media.....?

Share this post


Link to post
Share on other sites

...did this ever hit mainstream media.....?

LOL. Good one. You mean the BBC for instance?

I'm sure Labour and their cohorts did everything possible to silence him.

They were good at that.

We will have to publish a list of voices that Labour suppressed.

There were many.

Share this post


Link to post
Share on other sites

Considering that Eddie George didn't commence his "Slack" money policy until between 2001 and 2003 - without which the resultant house price boom and consumer credit splurges would not have happened, then the guy is a necromancer, rather than an economist or economic forecaster.

See here:

It will be seen, that post mid-2001, the graph starts to bias towards vertical.

See here:

Base Rates: Range: 1996-2006:

Thu, 03 Aug 2006 4.75

Thu, 04 Aug 2005 4.50

Thu, 05 Aug 2004 4.75

Thu, 10 Jun 2004 4.50

Thu, 06 May 2004 4.25

Thu, 05 Feb 2004 4.00

Thu, 06 Nov 2003 3.75

Thu, 10 Jul 2003 3.50

Thu, 06 Feb 2003 3.75

Thu, 08 Nov 2001 4.00

Thu, 04 Oct 2001 4.50

Tue, 18 Sep 2001 4.75

Thu, 02 Aug 2001 5.00

Thu, 10 May 2001 5.25

Thu, 05 Apr 2001 5.50

Thu, 08 Feb 2001 5.75

Thu, 10 Feb 2000 6.00

Thu, 13 Jan 2000 5.75

Thu, 04 Nov 1999 5.50

Wed, 08 Sep 1999 5.25

Thu, 10 Jun 1999 5.00

Thu, 08 Apr 1999 5.25

Thu, 04 Feb 1999 5.50

Thu, 07 Jan 1999 6.00

Thu, 10 Dec 1998 6.25

Thu, 05 Nov 1998 6.75

Thu, 08 Oct 1998 7.25

Thu, 04 Jun 1998 7.50

Thu, 06 Nov 1997 7.25

Thu, 07 Aug 1997 7.00

Thu, 10 Jul 1997 6.75

Fri, 06 Jun 1997 6.50

Tue, 06 May 1997 6.25

Wed, 30 Oct 1996 5.94

Thu, 06 Jun 1996 5.69

Share this post


Link to post
Share on other sites

Considering that Eddie George didn't commence his "Slack" money policy until between 2001 and 2003 - without which the resultant house price boom and consumer credit splurges would not have happened, then the guy is a necromancer, rather than an economist or economic forecaster.

Fred Harrison is a highly regarded Economist. He was in correspondence with a number of Labour Cabinet Figures.

All I can suggest is that the writing was on the wall way before 2003.

Even the treasury [and others] were warning Brown what could happen, from 1997 onwards.......

1.] In his 1997 budget, Brown abolished dividend tax credits on pension funds. Companies saw the writing on the wall and immediately ended their final salary pension schemes to new employees shortly after the 'Brown raid'. They also started to cut down on the number of people with long final salary pension service and worked towards ending a scheme which would no longer be viable.

* The CBI opposed Browns Tax credit cuts. Even the treasury and No.10 opposed them. [but Brown made the cuts anyway.]

2.] By abolishing the pensions tax credit, the yield for institutional funds across the entire market fell by 20 per cent. Few people outside the City understood the change and hardly any MPs protested. But Whitehall papers produced under the Freedom of Information act showed that Mr Brown was warned by his officials and by the Treasury that there would be dire consequences.

They warned it would wipe £50bn off the value of funds, and that shares could drop by up to 20 per cent and public sector pensions would need topping up.

[brown chose to ignore this warning]

* The value of pension funds have since lost around £5bn per year since the 1997 tax relief cuts. Pension funds holding the cash that almost everyone in the country had planned to use for our retirement have lost around £100 billion over 12 years. [1997-2007]

3.] The advice Brown was given by this Treasury Paper, in 1997 was as follows:

'The changes in incentives are likely to lead to substantial changes in portfolios. Pension funds will find equity relatively less attractive, and will prefer other assets – particularly interest bearing securities and foreign equity – and may also be prompted to consider more direct property investment.'

Those funds were then channelled into fuelling an unsustainable property bubble, {BTL portfolios,} which developed because of Labours complete lack of regulation of the Banks.

This was followed by rising house prices, ever increasing toxic mortgage debt, and this was followed by the bank bailouts.

By 2002/3 Roughly 60% of houses historically acquired by First Time Buyers, were acquired by the Buy To Let brigade.

In 2003 Brown switched the housing inflation figures from RPI to CPI.

Edited by Dan1

Share this post


Link to post
Share on other sites

Considering recent comments by Brown in the Media, I thought 'The Downing Street Letters' deserve to be posted on the Forum again.

[For those who missed them]

The Downing Street Letters

Contains such 24CT GOLDEN NUGGETS as: [page 9]

http://renegadeecono...brown-read.html

They knew. They were warned again and again.......

The Architects of New Labour should all be hung from Tower Bridge

I hope they are paying serious attention to the goings-on in the middle east.

There is much more to it than the removal of a couple of regional autocrats.

....because you have failed to heed my statutes and keep my laws....the gates are falling.

Taking the piss out of your commoners was a BAD move.

just like in ancient france..when they said "let them eat cake",and thought that none could touch them.....I will bring fire from the midst of you to cleanse you.

Edited by oracle

Share this post


Link to post
Share on other sites

Fred Harrison is a highly regarded Economist. He was in correspondence with a number of Labour Cabinet Figures.

All I can suggest is that the writing was on the wall way before 2003.

Even the treasury [and others] were warning Brown what could happen, from 1997 onwards.......

Which is all most laudable.

However Harrison couldn't know, in 1997 absolutely as fact, that George and the MPC would instigate a loose monetary policy which didn't actually occur until 2002-3: which would trip the insanity of the property price boom; anymore than he could know the FSA would prove wholly and totally incompetent in managing the monetary and fiscal affairs wrested from the B of E and ceded to FSA: (May 6th 1997) which with low interest rates and slack money fostered the insanity of turbocharged FRB, systemic dysfunction and explosive lending enabled by imported short-term cash from the global capital markets.

Trouble with forecasting is one makes oneself an Hostage to Fortune: get it right and few if any remember: get it wrong and one's a fool.

Share this post


Link to post
Share on other sites

Which is all most laudable.

However Harrison couldn't know, in 1997 absolutely as fact, that George and the MPC would instigate a loose monetary policy which didn't actually occur until 2002-3: which would trip the insanity of the property price boom; anymore than he could know the FSA would prove wholly and totally incompetent in managing the monetary and fiscal affairs wrested from the B of E and ceded to FSA: (May 6th 1997) which with low interest rates and slack money fostered the insanity of turbocharged FRB, systemic dysfunction and explosive lending enabled by imported short-term cash from the global capital markets.

Trouble with forecasting is one makes oneself an Hostage to Fortune: get it right and few if any remember: get it wrong and one's a fool.

Ah but he may have known that the clever boys at CITI in Docklands had invented the financial weapon of mass destruction....the SIV combined with MBS and CDO.

1997 I beleive was the year they created this monster.....didnt need loose policy from the CBs...the spiral of circulating debt upon debt had begun.

Share this post


Link to post
Share on other sites

Considering that Eddie George didn't commence his "Slack" money policy until between 2001 and 2003 - without which the resultant house price boom and consumer credit splurges would not have happened, then the guy is a necromancer, rather than an economist or economic forecaster.

It actually has more to do with the economics of land , which is why people like Fred Harrison or Fred Foldvary were able to predict the 2007 crash even before 2001. I believe Fred Foldvary wrote an article about the coming 2007 crash in the mid nineties. In fact anyone aware of the land cycle would have been able to predict the 2007-2008 crash at the previous land crash in 1990

Most economists don't include land in their economic models which is why they didn't predict the crises and more broadly why they can say very little substantial about the actual economy at all.

Fred explains it a bit here

Nobody Saw It Coming

Edited by Stars

Share this post


Link to post
Share on other sites

It actually has more to do with the economics of land , which is why people like Fred Harrison or Fred Foldvary were able to predict the 2007 crash even before 2001. I believe Fred Foldvary wrote an article about the coming 2007 crash in the mid nineties. In fact anyone aware of the land cycle would have been able to predict the 2007-2008 crash at the previous land crash in 1990

Most economists don't include land in their economic models which is why they didn't predict the crises and more broadly why they can say very little substantial about the actual economy at all.

Fred explains it a bit here

Nobody Saw It Coming

Theres a reason that people don't include land in their models, and I find it interesting that Fred can without recoiling in horror. I suspect he's seeing it as an intellectual exercise and that's how he can push away the sheer awfulness of what land actually means. (i.e. that pretty nearly everyone around will attack and/or kill you over some arbitary lines that exist only in their heads. It's a hard life living with the insane.)

Share this post


Link to post
Share on other sites

Which is all most laudable.

However Harrison couldn't know, in 1997 absolutely as fact, that George and the MPC would instigate a loose monetary policy which didn't actually occur until 2002-3: which would trip the insanity of the property price boom; anymore than he could know the FSA would prove wholly and totally incompetent in managing the monetary and fiscal affairs wrested from the B of E and ceded to FSA: (May 6th 1997) which with low interest rates and slack money fostered the insanity of turbocharged FRB, systemic dysfunction and explosive lending enabled by imported short-term cash from the global capital markets.

Trouble with forecasting is one makes oneself an Hostage to Fortune: get it right and few if any remember: get it wrong and one's a fool.

What's your point? He did get it right and laid down his reasoning in books before it happened.

The FED published similar papers in the early part of this century which linked monetary policy and house prices to demographics.

http://www.federalreserve.gov/Pubs/ifdp/2005/847/IFDP847.pdf

and they predict (as a trend) that house prices in the UK will fall from 2011 for decades.

Share this post


Link to post
Share on other sites

Theres a reason that people don't include land in their models, and I find it interesting that Fred can without recoiling in horror. I suspect he's seeing it as an intellectual exercise and that's how he can push away the sheer awfulness of what land actually means. (i.e. that pretty nearly everyone around will attack and/or kill you over some arbitary lines that exist only in their heads. It's a hard life living with the insane.)

Yup, it is. He's nailed the core of the problem (un-productive land use) and no-one cares enough to listen. Those that do care don't want him to be heard.

Share this post


Link to post
Share on other sites

What's your point? He did get it right and laid down his reasoning in books before it happened.

Trust you did actually read and consider my first post in this thread and extrapolate the separate metrics of the B of E's monetary policy and the graph?

The OP praised Harrison as an Economist: not as a fortune teller.

In my many years involvement with economic analysis and forecasting, I've tended to rely on the basis of extrapolating trends and real events into future likely outcomes.

Perhaps I therefore ought to have bought a crystal ball, a set of Tarot Cards and some chicken innards instead.

The FED published similar papers in the early part of this century which linked monetary policy and house prices to demographics.

http://www.federalreserve.gov/Pubs/ifdp/2005/847/IFDP847.pdf

Back in the mid 1970s, after the Heath-Barber economic debaclé (To which I have oft referred on this forum), the Economist published a tongue in cheek analysis, showing how since Roman times a Seven Year repeating cycle existed where building and property resulting therefrom boomed and dropped.

and they predict (as a trend) that house prices in the UK will fall from 2011 for decades.

Personally, I wouldn't put money on that bet!

Share this post


Link to post
Share on other sites

Trust you did actually read and consider my first post in this thread and extrapolate the separate metrics of the B of E's monetary policy and the graph?

The OP praised Harrison as an Economist: not as a fortune teller.

In my many years involvement with economic analysis and forecasting, I've tended to rely on the basis of extrapolating trends and real events into future likely outcomes.

Perhaps I therefore ought to have bought a crystal ball, a set of Tarot Cards and some chicken innards instead.

Unfortunately the BofE have rendered themselves irrelevent, we can't even say that they were wise after the event because they're still flailing and faffing around. Harrison on the other hand publicly warned New Labour about the property boom ten years in advance, if he'd got it wrong his career would have been over. That's how high the stakes were.

You say that the BofE didn't loosen policy until 2002/3, but the property boom was in full swing by then so your claim doesn't add up.

Back in the mid 1970s, after the Heath-Barber economic debaclé (To which I have oft referred on this forum), the Economist published a tongue in cheek analysis, showing how since Roman times a Seven Year repeating cycle existed where building and property resulting therefrom boomed and dropped.

Perhaps they should have stuck with this theory, it makes more sense than most other economic analysis.

Edited by Chef

Share this post


Link to post
Share on other sites

You say that the BofE never loosened policy until 2002/3, but the property boom was in full swing by then so your claim make little sense.

It was "In full swing", before NuLab came to power on May 2nd 1997.

Thus presumably, we blame Ken Clarke?

If you also look at the graph, then you will quickly see how the curve had risen before Blair came to power: however it straightened and would have probably gone vertical, had it not been for the so-called Credit Crunch and withdrawal of global interbank short-term funding and the collapse of the methodology of securitisation, MBSs, structured investment vehicles and etc.

house-prices-52-09.jpg

Share this post


Link to post
Share on other sites

It was "In full swing", before NuLab came to power on May 2nd 1997.

Thus presumably, we blame Ken Clarke?

If you also look at the graph, then you will quickly see how the curve had risen before Blair came to power: however it straightened and would have probably gone vertical, had it not been for the so-called Credit Crunch and withdrawal of global interbank short-term funding and the collapse of the methodology of securitisation, MBSs, structured investment vehicles and etc.

You're getting cause and effect muddled up. Bankers withdrew credit because the rise in house prices crushed the productive economy, this meant there was less chance of them getting their money back with a decent return. Had it not been for meteroic in house price inflation the fallout created by dodgy MBS's could have been contained, they certainly wouldn't have posed such a serious threat to the financial system.

Tbh I'm passed caring now. In fact I'm glad the majority ignore Harrison and his Georgist theories, I'm planning to make a packet out of the next boom so his esoteric knowledge should help seperate me from the herd.

Edited by Chef

Share this post


Link to post
Share on other sites

You're getting cause and effect muddled up. Bankers withdrew credit because the rise in house prices crushed the productive economy, this meant there was less chance of them getting their money back with a decent return. Had it not been for meteroic in house price inflation the fallout created by dodgy MBS's could have been contained, they certainly wouldn't have posed such a serious threat to the financial system.

Tbh I'm passed caring now. In fact I'm glad the majority ignore Harrison and his Georgist theories, I'm planning to make a packet out of the next boom so his esoteric knowledge should help seperate me from the herd.

100% reversed.

Ponzi doesnt work by paying out before the money comes in from fresh punters.

Share this post


Link to post
Share on other sites

100% reversed.

Ponzi doesnt work by paying out before the money comes in from fresh punters.

As I say, I'm glad you ignore Georgist theory. It'll make it that much easier for me to fleece you over the course of the next business cycle.

Good luck with your Austrian analysis (you're going to need it!)

Share this post


Link to post
Share on other sites

It was "In full swing", before NuLab came to power on May 2nd 1997.

Thus presumably, we blame Ken Clarke?

If you also look at the graph, then you will quickly see how the curve had risen before Blair came to power: however it straightened and would have probably gone vertical, had it not been for the so-called Credit Crunch and withdrawal of global interbank short-term funding and the collapse of the methodology of securitisation, MBSs, structured investment vehicles and etc.

house-prices-52-09.jpg

You haven't even got a graph in real terms. You really are a muppet!

Harrison predicted a credit crisis based on the hoarding of land due to an excess of credit. Which is what happened. There's nothing new in repackaging debt and selling it on, they've just got new maths, new customers and new technologies to distribute it.

I don't buy Harrison's argument, but you can't dismiss him just because he isn't Cassandra. He made predictions based on a theory about the housing market twice (he correctly predicted the 1989 crash in advance as well). If you're going to refute him then you have to do better than saying he "can't know the future with absolute certainty". That's just moronic.

Share this post


Link to post
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...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 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%



×
×
  • 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.