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rokinik

Osborne - Our House Price Bubble Was Bigger Than America's

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Watching on BBC 24 last night, wake up this morning and not mentioned anywhere?

HPC backed by Chancellor.

If there was bubble, then it will deflate (or pop)

Is it just me or is this not official ratification of the HPC credo?!

But the truth is this.

Even without these substantial headwinds, the journey the British economy has to travel would be a hard one.

As I said at the time of the Autumn Forecast last November: “recovery was always going to be more challenging than after previous recessions”.

For we are seeing the unwinding of debts built up over an entire decade.

Of all the major economies in the world, Britain’s was the most over-borrowed.

Our families were more in debt than any other in the G7.

Our house price bubble was bigger than America’s.

Our government deficit higher than that of Greece

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Is bigger than America's was before America's burst and is still deflating ;).

Yep that's what I was implying.

Edited by Pent Up

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But the truth is this.

Even without these substantial headwinds, the journey the British economy has to travel would be a hard one.

As I said at the time of the Autumn Forecast last November: “recovery was always going to be more challenging than after previous recessions”.

For we are seeing the unwinding of debts built up over an entire decade.

Of all the major economies in the world, Britain’s was the most over-borrowed.

Our families were more in debt than any other in the G7.

Our house price bubble was bigger than America’s.

Our government deficit higher than that of Greece

And he is going to fix a debt problem by.....

Fast forward to last week's forecasts from the Office for Budget Responsibility. Buried in the small print (actually found in tab 1.8 of the ‘Supplementary Economy Tables’ spreadsheet) was a forecast that the UK’s personal indebtedness is set to worsen considerably.

As Labour MP Chuka Umunna highlighted at the Treasury Select Committee earlier today, it shows that household debt is set to rise from £1,560bn in 2010 (160% of household income) to £2,126bn in 2015 (175% of income) – an increase of 36.3%. By 2015 UK households will have amassed over two trillion pounds worth of debt.

The household debt-to-income ratio (the best measure of how manageable the debt burden is) fell from 2007 until 2010. It is now forecast to start rising again. Osborne described pre-crisis household debt-to-income ratios as unsustainable – and yet the ratio is forecast to hit a new all-time high in 2015.

More damagingly for Osborne, the OBR forecast for June 2010 (pdf) – before his first budget – predicted that household debt in 2014 would stand at £1,718bn. But following two Osborne budgets that number has now been revised up to £1,963bn – an increase of £245bn. In other words as a result of Osborne’s policies the direct debt burden on UK households is set to increase by nearly a quarter of a trillion pounds in the next three years.

http://falseeconomy.org.uk/blog/household-debt-up

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But they seem to be on a faster correction. Case/Shiller now at -37% peak to trough nominal fall with a renewed slump of -4.2% in Q1 2011. You hase to conclude that we are on the edge of the second leg down.

Edited by crashmonitor

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is bigger than Americas.

Have you noticed how the past-tense is used again and again, every time the housing bubble is discussed?

I believe they're using the neuro-linguistic concepts of presupposition and chronological anchoring. In marketing, copywriters construct sentences that pre-suppose the fact that the reader will or has already bought your product. Chronological phrases are deployed to reinforce a sense of natural progression. There's considerable evidence to suggest these concepts have powerful subconscious influence on people and have been used by copywriters for decades.

In the case of the housing bubble, TPTB are adopting the same techniques in reverse. if something has already happened, there's no need to panic.

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Have you noticed how the past-tense is used again and again, every time the housing bubble is discussed?

I believe they're using the neuro-linguistic concepts of presupposition and chronological anchoring. In marketing, copywriters construct sentences that pre-suppose the fact that the reader will or has already bought your product. Chronological phrases are deployed to reinforce a sense of natural progression. There's considerable evidence to suggest these concepts have powerful subconscious influence on people and have been used by copywriters for decades.

In the case of the housing bubble, TPTB are adopting the same techniques in reverse. if something has already happened, there's no need to panic.

interesting.

definitely deliberate.

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  • 309 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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