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Reck B

Managing The Bust

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Sorry to disappoint anyone expecting to see a paid of norgs being cupped.

I'm concerned about how this bust is being handled from a house price point of view.

If the BOE, the government and the banks get away with halting an obvious, quick, devastating crash in house prices - these (as far as I can tell) unprecedented methods of managing the bust (QE, dropping rates, SMI, lenient repossession policy, unauthorised taxpayer support of the banking industry etc etc) could be used as a blueprint again in the future - the will to prevent a housing bubble occuring again will be lost as the consequences can be managed, hidden, slowed down.

It will then validate boom/bust economics to the benefit of the government and banks (who appear to be one and the same thing) who can utilise this cycle to enrich themselves during the boom and spread the pain across the whole of society during the bust phase by inflating savings away, devaluing currency etc. (robbery)

Sometimes I think this is the game and nothing will change, (for things to change, we need chaos, prosecutions a complete overhaul of monetary policy ) so just play it - ride the next one as high as you feel comfortable, cash out and fluck off abroad away from this madness.

Will they get away with it? I'm 50/50 part of me says yes they'll manage the decline over 10+ years, masking the crash through inflation somehow and the other part says it is just too large this time, the tidal wave of pain approaches.

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Sorry to disappoint anyone expecting to see a paid of norgs being cupped.

I'm concerned about how this bust is being handled from a house price point of view.

If the BOE, the government and the banks get away with halting an obvious, quick, devastating crash in house prices - these (as far as I can tell) unprecedented methods of managing the bust (QE, dropping rates, SMI, lenient repossession policy, unauthorised taxpayer support of the banking industry etc etc) could be used as a blueprint again in the future - the will to prevent a housing bubble occuring again will be lost as the consequences can be managed, hidden, slowed down.

It will then validate boom/bust economics to the benefit of the government and banks (who appear to be one and the same thing) who can utilise this cycle to enrich themselves during the boom and spread the pain across the whole of society during the bust phase by inflating savings away, devaluing currency etc. (robbery)

Sometimes I think this is the game and nothing will change, (for things to change, we need chaos, prosecutions a complete overhaul of monetary policy ) so just play it - ride the next one as high as you feel comfortable, cash out and fluck off abroad away from this madness.

Will they get away with it? I'm 50/50 part of me says yes they'll manage the decline over 10+ years, masking the crash through inflation somehow and the other part says it is just too large this time, the tidal wave of pain approaches.

they arent actually managing a housing boom/bust, its inconsequential and simply a result of what they are actually trying to avoid (unfortunately by taking actions that are guaranteeing it), they are managing a debt/growth bust and have been managing in it since 2000 when the nasdaq went pop.

So far the smooth management has included:

the highest real property prices since 1730 (last time they reached this price they trended down for 150 years in real terms before they bottomed).

The highest levels of personal debt in UK History

The collapse of the banking sector and first UK bank runs in 300 years

At least 3 European countries in the process of default (so far)

Unrest across the entire Middle East

The beginning of a rise of more extreme political parties in the West

It doesn’t look to be that smooth to me but the actions being taken are reasonably consistent with every other major bust in history, i think you are right in the assumption that nothing will fundamentally change as these booms and busts have been continuous through history, the majority wont see whats building until its happened as it is a natural state to assume it cant happen (which is exactly what is guaranteeing it happens), the belief in the removal of risk can only happen when risk is at its most extreme.

Edited by georgia o'keeffe

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they arent actually managing a housing boom/bust, its inconsequential and simply a result of what they are actually trying to avoid (unfortunately by taking actions that are guaranteeing it), they are managing a debt/growth bust and have been managing in it since 2000 when the nasdaq went pop.

So far the smooth management has included:

the highest real property prices since 1730 (last time they reached this price they trended down for 150 years in real terms before they bottomed).

The highest levels of personal debt in UK History

The collapse of the banking sector and first UK bank runs in 300 years

At least 3 European countries in the process of default (so far)

Unrest across the entire Middle East

The beginning of a rise of more extreme political parties in the West

It doesn't look to be that smooth to me but the actions being taken are reasonably consistent with every other major bust in history, i think you are right in the assumption that nothing will fundamentally change as these booms and busts have been continuous through history, the majority wont see whats building until its happened as it is a natural state to assume it cant happen (which is exactly what is guaranteeing it happens), the belief in the removal of risk can only happen when risk is at its most extreme.

the major bottoms in that series followed severe wars - napoleonic wars , austrian wars of succession (I think, finished c 1750)), 1st/2nd world wars - cheap property bought from 1945 to 1980

without that (and it may styill happen - China anyone?) it is hard to see 150 year falls, however, my guess is that property will not be a great investment for a very very long time to come, too long for any of the bears on these boards to make much money out of it in the coming few decades, certainly

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they arent actually managing a housing boom/bust, its inconsequential and simply a result of what they are actually trying to avoid (unfortunately by taking actions that are guaranteeing it), they are managing a debt/growth bust and have been managing in it since 2000 when the nasdaq went pop.

So far the smooth management has included:

the highest real property prices since 1730 (last time they reached this price they trended down for 150 years in real terms before they bottomed).

The highest levels of personal debt in UK History

The collapse of the banking sector and first UK bank runs in 300 years

At least 3 European countries in the process of default (so far)

Unrest across the entire Middle East

The beginning of a rise of more extreme political parties in the West

It doesn’t look to be that smooth to me but the actions being taken are reasonably consistent with every other major bust in history, i think you are right in the assumption that nothing will fundamentally change as these booms and busts have been continuous through history, the majority wont see whats building until its happened as it is a natural state to assume it cant happen (which is exactly what is guaranteeing it happens), the belief in the removal of risk can only happen when risk is at its most extreme.

thanks.

Would you say booms are planned or just 'not prevented' through incompetence and/or purposeful inaction?

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thanks.

Would you say booms are planned or just 'not prevented' through incompetence and/or purposeful inaction?

they are planned in as much as the banking system we have in place is planned, the boom in whatever the asset class itself may be is just a function of greed and fear which are unstoppable, whilst im no anarchist the asset class that actually booms is generally just a function of taxation, price fixing, subsidy and other Govt policy,

Edited by georgia o'keeffe

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Unfortunately what they're not managing at all are the glow ball trade imbalances at the heart of all of it.

That will come next.............

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Unfortunately what they're not managing at all are the glow ball trade imbalances at the heart of all of it.

That will come next.............

The 'plan' there is that as the currency debases and inflation takes off, people can't afford to buy imported stuff and turn to local produce. At the same time your exports become more attractive as the serfs require much less pay in real terms.

Doesn't seem to be going to plan ... exports are doing pretty well but people are still buying shiny Chinese tat on credit.

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The 'plan' there is that as the currency debases and inflation takes off, people can't afford to buy imported stuff and turn to local produce. At the same time your exports become more attractive as the serfs require much less pay in real terms.

Doesn't seem to be going to plan ... exports are doing pretty well but people are still buying shiny Chinese tat on credit.

My bold - doesn't that mean that johnny foreigner hoovers up your local produce so the serfs get priced out of that too? Globalism FTW!

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The 'plan' there is that as the currency debases and inflation takes off, people can't afford to buy imported stuff and turn to local produce. At the same time your exports become more attractive as the serfs require much less pay in real terms.

Doesn't seem to be going to plan ... exports are doing pretty well but people are still buying shiny Chinese tat on credit.

Caught a snippet on the radiogram around lunchtime on how the Royals were planting up Windsor Great Park with vines or something along those lines. I think they said it was Prince Philip who was masterminding the exercise.

Had something of the Dig for Victory about it. (Or it may just be senility is overtaking the poor fella)

Edit: Here we go - "Let one drink Sparkling English Chardonnay" http://www.telegraph...ark-grapes.html

Edited by Red Karma

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Caught a snippet on the radiogram around lunchtime on how the Royals were planting up Windsor Great Park with vines or something along those lines. I think they said it was Prince Philip who was masterminding the exercise.

Had something of the Dig for Victory about it. (Or it may just be senility is overtaking the poor fella)

Edit: Here we go - "Let one drink Sparkling English Chardonnay" http://www.telegraph...ark-grapes.html

could simply be climate change - french wine producers are buying up parts of the home counties for same reason, taking advantage of warmer temperatures permitting better vine-growing

?? maybe not, dunno, maybe both...

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  • 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%



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