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Trampa501

The Danger Of Recovery

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Recovery is fine, if for example it's export led, manufacturing enjoys a resurgence, and local people take up jobs and learn new marketable skills. In fact it would be brilliant.

But I fear the combination of government measures (QE, bank subsidies, free money bribes via bank shares, 50k deposits given by councils etc) is going to totally distort things. The housing market, which needs a lot further to fall, will instead turn around, and all those estate agents, property makeover programmes etc will pop up again. Our currency will further fall, and inflation will continue at a high rate, but hey house prices will rise again!

Tell me, I'm wrong. Please

Edited by Trampa501

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Recovery is fine, if for example it's export led, manufacturing enjoys a resurgence, and local people take up jobs and learn new marketable skills. In fact it would be brilliant.

But I fear the combination of government measures (QE, bank subsidies, free money bribes via bank shares, 50k deposits given by councils etc) is going to totally distort things. The housing market, which needs a lot further to fall, will instead turn around, and all those estate agents, property makeover programmes etc will pop up again. Our currency will further fall, and inflation will continue at a high rate, but hey house prices will rise again!

Tell me, I'm wrong. Please

No chance, trust me! It's completely unsustainable, always has been. The longer they try to prop it up and remain popular the worse it will be.

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Recovery is fine, if for example it's export led, manufacturing enjoys a resurgence, and local people take up jobs and learn new marketable skills. In fact it would be brilliant.

But I fear the combination of government measures (QE, bank subsidies, free money bribes via bank shares, 50k deposits given by councils etc) is going to totally distort things. The housing market, which needs a lot further to fall, will instead turn around, and all those estate agents, property makeover programmes etc will pop up again. Our currency will further fall, and inflation will continue at a high rate, but hey house prices will rise again!

Tell me, I'm wrong. Please

Inflation will rise but not wage inflation, food or property ownership is the question many are already facing.

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If people don't have a job you can offer all the £50k deposits you like, it ain't going to make any difference.

True, there will inevitably be a house price crash but only a small minority of people who's wages are keeping up with inflation will be able to afford them.

All others will be struggling to afford food/bills/rent, never mind saving up for a deposit.

Inflation (other than wage inflation!) is the current master plan of the elite to turn the sheeple into permanent serfs.

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They are wishing for both sorts of recoveries. They know we need to re-balance but that is a 'long term' project. The issue I see it is if they manage to engineer a short term recovery fix, it crowds out the longer term one and people lose interest in addressing the fundamental issues.

You're not wrong, it is a real risk.

Can they have both sorts of recoveries simultaneously?

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Can they have both sorts of recoveries simultaneously?

i dont think this govt could, they simply arent good enough, only Gordon could have completely nailed both recoveries and ushered in an era of fairer fair prosperity for all, shame really

Edited by georgia o'keeffe

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There is no chance of an actual recovery. We borrowed another £15 billion last month alone so our short and medium term goal is debt management not recovery. How can we consider to have recovered until we have paid off our debt or at the very least stopped getting in more debt and be paying it off.

As far as house prices go we seem to be caught between a rock and a hard place, as most of our borrowed money is tied to these assets if their paper value crashes our nation will be considered a poor credit risk and we will end up paying 30% interest like greece, though quite why the market can't see we are a bad risk already i do not know. If that happens we'll go the way of greece for the same reasons, therefore house prices are protected by ANY means possible. With house prices as they are our domestic housing market is almost stagnant and as we know most of our economy is based on people moving about and the resultant renovations and upgrades etc. Our trickling exports will continue to trickle.

So domestic economy stagnating, exports tricking, housing prices plate spinning, debt piling up, interest compounding. Don't see any recovery coming from any direction any time soon.

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Can they have both sorts of recoveries simultaneously?

Of course they can because inequality is growing.

The benefit class are no longer poor because the government will pay their housing costs, SMI etc.

Those at the bottom who are working are worried about living costs but council schemes will help with their deposits - later they could join the benefit class.

The group of workers nearer the top is expanding and now includes lots of higher paid council workers, Doctors, BBC, etc. They have equity and can access mortgages easily or just pay in cash.

The elites have never had it so good.

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Can they have both sorts of recoveries simultaneously?

Hard to imagine how - banks, public sector workers, home-owners, landlords. There are a lot of forces that are acting in a short-term manner. Can't say I blame them. Would you act unselfishly in the hope that you'll be treated fairly further down the road?

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There is no chance of an actual recovery. We borrowed another £15 billion last month alone so our short and medium term goal is debt management not recovery. How can we consider to have recovered until we have paid off our debt or at the very least stopped getting in more debt and be paying it off.

As far as house prices go we seem to be caught between a rock and a hard place, as most of our borrowed money is tied to these assets if their paper value crashes our nation will be considered a poor credit risk and we will end up paying 30% interest like greece, though quite why the market can't see we are a bad risk already i do not know. If that happens we'll go the way of greece for the same reasons, therefore house prices are protected by ANY means possible. With house prices as they are our domestic housing market is almost stagnant and as we know most of our economy is based on people moving about and the resultant renovations and upgrades etc. Our trickling exports will continue to trickle.

So domestic economy stagnating, exports tricking, housing prices plate spinning, debt piling up, interest compounding. Don't see any recovery coming from any direction any time soon.

great post - you've hit the nail on the head several times there!

governments should let nature take its course - it will mean tough times for many - but after some time there may well be a real recovery- not this fake rubbish we are hearing about.

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The stock market recovery is persuasive, as it is intended to be, but we can't escape this sham:

The City watchdog has accused Britain's banks of moving struggling mortgage customers on to more lenient terms to conceal bad debts.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8548745/Banks-accused-of-using-mortgage-debt-leniency-to-flatter-numbers.html

The politicians want it, and the banks are delivering. It will end ... actually, it might never end! We are Japan, that is all.

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Recovery is fine, if for example it's export led, manufacturing enjoys a resurgence, and local people take up jobs and learn new marketable skills. In fact it would be brilliant.

But I fear the combination of government measures (QE, bank subsidies, free money bribes via bank shares, 50k deposits given by councils etc) is going to totally distort things. The housing market, which needs a lot further to fall, will instead turn around, and all those estate agents, property makeover programmes etc will pop up again. Our currency will further fall, and inflation will continue at a high rate, but hey house prices will rise again!

Tell me, I'm wrong. Please

Take a look at Max Keiser on Russia Today http://maxkeiser.com/2011/06/23/kr158-keiser-report-greek-resistance-increase-wages-special/

Puts things in perspective. Export led manufacturing recovery would be brilliant but it's not a big enough part of our economy, and what there is is mostly foreign owned.

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Or inflated away... (hint, hint)

I have very little expectation that attempts to inflate out of this mess will succeed. Incomes are being reduced relative to the outstanding debt. To inflate out needs incomes to rise relative to the debt. I can't see any evidence of this happening.

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I have very little expectation that attempts to inflate out of this mess will succeed. Incomes are being reduced relative to the outstanding debt. To inflate out needs incomes to rise relative to the debt. I can't see any evidence of this happening.

I didn't mean private debts, the government debt of course!

The government doesn't give a f**k about private debt, in fact they are happy that people are indebted as indebted people keep their heads down, do their work and don't protest.

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I didn't mean private debts, the government debt of course!

The government doesn't give a f**k about private debt, in fact they are happy that people are indebted as indebted people keep their heads down, do their work and don't protest.

I can't see that working either. We have an environment where pretty much everyone is trying to debase their currency in order to become more competetive. That makes it zero sum on aggregate. The other option - inflating to increase the tax take isn't going to work since incomes are falling rather than rising.

How do you see it succeeding?

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Property 90% down from peak over 20 years? Hope so.

From income erosion maybe. Not from inflation except insofar as the expansion of the monetary base has caused commodity price increases which are further eroding income.

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The stock market recovery is persuasive, as it is intended to be, but we can't escape this sham:

The City watchdog has accused Britain's banks of moving struggling mortgage customers on to more lenient terms to conceal bad debts.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8548745/Banks-accused-of-using-mortgage-debt-leniency-to-flatter-numbers.html

The politicians want it, and the banks are delivering. It will end ... actually, it might never end! We are Japan, that is all.

In order for the banks to maintain their balance sheets, the Govt will have to keep rates low. You can only get away with an ongoing inflationary environment if you can export your inflation (via a carry trade). We can't. A now global work force and free markets means a permanent excess capacity of labour, wages pressure will remain non existent in the private sector ( and as the public sector relies on their taxes for funding, either taxes will rise, the deficit will increase or wages in the public sector will have to fall in real terms-almost certainly via inflation)

The fly in the sake, is that all it takes is one country to blink and raise rates, then every one else will have to (to stop their currency being decimated.)

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From income erosion maybe. Not from inflation except insofar as the expansion of the monetary base has caused commodity price increases which are further eroding income.

It will possibly be a combination. But I think it will be in real terms, not nominal. ( thats if we go ever actually go 90%)

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  • 312 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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