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no accountant

Why Italy, The Us Etc Will Default

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The sell off in Italian bonds is entirely rational. Yes their level of debt is no higher now than is was 10 years ago (as a percent of GDP) , however, the chance of them being able to pay it off diminises all the time. The Euro has hidden these risks as everyone thought it would hold together. Now we're not sure.

With fewer and few people of working age having to support more and more retirees they is no way they can pay more tax or cut spending. Quite the opposite in fact, as more spending is needed to support the older people and there's fewer people working and paying tax.

There's a good article about the same thing in the US:

Batten Down the Hatches: A Hurricane of Debt, Deficit and Demographics is Coming

People consume goods and services which are produced by workers. A sharp decline in the United States and developed country workforce means that Americans, and their European and Japanese counterparts, must either reduce consumption drastically or increase reliance on imports from emerging countries. Thus, the trade deficit between developed countries and the emerging countries must continue to widen aggressively or the standard of living for developed countries must decline precipitously. However, the only way for most developed countries to maintain (and increase) their trade deficit against the emerging countries is to borrow heavily from the emerging countries. If the PIIGS are any indication of what is to come, the balance sheet, and ultimately the credit rating, of the developed economies simply would not allow further aggressive borrowing.

Hence the enivitable default. So who would be crazy enough to buy a house?

Edited by no accountant

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The sell off in Italian bonds is entirely rational. Yes their level of debt is no higher now than is was 10 years ago (as a percent of GDP) , however, the chancge of them being able to pay it off diminises all the time. The Euro has hidden these risks as everyone thought it would hold together. Now we're not sure.

With fewer and fewer people of working age having to support more and more retirees they is no way they can pay more tax or cut spending. Quite the opposite in fact, as more spending is needed to support the older people and there's fewer people working and paying tax.

There's a good article about the same thing in the US:

Batten Down the Hatches: A Hurricane of Debt, Deficit and Demographics is Coming

Hence the enivitable default. So who would be crazy enough to buy a house?

Tax the profits of house sales !!!!

Tax land.

Tax the rich.

Tax the royal.

Tax anyone who has anything left to take.

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Tax anyone who has anything left to take.

That will last for a few years, then it's all gone. Then what?

Even if the remaining workers gave 100% of their income to the state they're still wouldn't be enought, (as most people would have left the country !)

Edited by no accountant

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The sell off in Italian bonds is entirely rational. Yes their level of debt is no higher now than is was 10 years ago (as a percent of GDP) , however, the chancge of them being able to pay it off diminises all the time. The Euro has hidden these risks as everyone thought it would hold together. Now we're not sure.

With fewer and few people of working age having to support more and more retirees they is no way they can pay more tax or cut spending. Quite the opposite in fact, as more spending is needed to support the older people and there's fewer people working and paying tax.

There's a good article about the same thing in the US:

Batten Down the Hatches: A Hurricane of Debt, Deficit and Demographics is Coming

Hence the enivitable default. So who would be crazy enough to buy a house?

If the result of defaults is unrestrained printing of money, you would be crazy not to buy a house or two, whatever the price.

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If the result of defaults is unrestrained printing of money, you would be crazy not to buy a house or two, whatever the price.

But why would a house hold it's real value if there's fewer and fewer people around to buy it? Japan is already a long way down this road with house prices falling for almost 20 years as the population retires.

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But why would a house hold it's real value if there's fewer and fewer people around to buy it? Japan is already a long way down this road with house prices falling for almost 20 years as the population retires.

I didnt say it would. All it would need to do is hold its value better than fiat money to make this the correct strategy in pure investment terms.

Lets not forget too, that during this time you would have somewhere to live as well.

Note also, the UK is seeing a huge population increase at the moment, it doesnt appear to be like Japan at all.

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Note also, the UK is seeing a huge population increase at the moment, it doesnt appear to be like Japan at all.

Except that population increase is being driven by the benefits system and the new members of society are more likely to expect to receive handouts rather than work for a living.

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If the result of defaults is unrestrained printing of money, you would be crazy not to buy a house or two, whatever the price.

You'd be better off buying an asset that isn't already massively overpriced and is more liquid.

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You'd be better off buying an asset that isn't already massively overpriced and is more liquid.

Well sort of. The thing about houses is that banks will lend you money to acquire them. You might find it more difficult to lever yourself up for other assets. You want as much debt as possible if you truly believe in a hyper-inflationary crash.

Generally though, it is better to buy the best priced asset. Mind you, if there really are 80 million people living in the UK as some believe, then are houses really that much over priced?

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The sell off in Italian bonds is entirely rational. Yes their level of debt is no higher now than is was 10 years ago (as a percent of GDP) , however, the chancge of them being able to pay it off diminises all the time. The Euro has hidden these risks as everyone thought it would hold together. Now we're not sure.

Would anyone care to explain how it is possible to repay one's national debt?

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Well sort of. The thing about houses is that banks will lend you money to acquire them. You might find it more difficult to lever yourself up for other assets. You want as much debt as possible if you truly believe in a hyper-inflationary crash.

Generally though, it is better to buy the best priced asset. Mind you, if there really are 80 million people living in the UK as some believe, then are houses really that much over priced?

Well first off - debt will just get enormous interest rate ikes to match the hyperinflation, so debt is an insane idea, unless it's a small and likely to be payable in a month sort of debt.

Secondly, houses are very easy to tax.

Housing as an inflation hedge might seem like a great idea, until the £150k council tax bill arrives in.

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Well first off - debt will just get enormous interest rate ikes to match the hyperinflation, so debt is an insane idea, unless it's a small and likely to be payable in a month sort of debt.

Secondly, houses are very easy to tax.

Housing as an inflation hedge might seem like a great idea, until the £150k council tax bill arrives in.

Easy to tax, and yet they choose to tax the occupiers, not the owners.

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Would anyone care to explain how it is possible to repay one's national debt?

You could print the money if the debt is denominated in a currency you can mint. Failing that, just tax more than you spend for long enough.

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You'd be better off buying an asset that isn't already massively overpriced and is more liquid.

The more I think about it, buying a decent 40ft boat makes more and more sense. You could hide out in the Greek islands for years.

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Easy to tax, and yet they choose to tax the occupiers, not the owners.

When they don't pay (and they won't be able to in a hyperinflation) you will have to.

Oh and the tenants will probably strip all the copper etc of the house out as well to buy food.

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The more I think about it, buying a decent 40ft boat makes more and more sense. You could hide out in the Greek islands for years.

:)

Yeah the people of that region are renowned for their peacefulness in times of crisis.

A 40ft heavily armed and armoured boat with a powerful radar, maybe.......

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:)

Yeah the people of that region are renowned for their peacefulness in times of crisis.

A 40ft heavily armed and armoured boat with a powerful radar, maybe.......

Just got back from there. Speaking to the locals to guage opinion they really do not give a shit about the financial crisis. In fact they seem quite bemuised at the coverage in the UK.

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Just got back from there. Speaking to the locals to guage opinion they really do not give a shit about the financial crisis. In fact they seem quite bemuised at the coverage in the UK.

Sure, they're fine, now. I like Greece for holidays, or did when it was cheap.

Have a read about the behaviour of the Greeks and the Turks during the period of history that encompasses the end of the Ottoman empire.

I wouldn't want to be a foreign stranger there in a crisis.

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You could print the money if the debt is denominated in a currency you can mint. Failing that, just tax more than you spend for long enough.

Right, so you're saying you could issue a form of debt free currency.

Tax? Where does the tax money come from?

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Well sort of. The thing about houses is that banks will lend you money to acquire them. You might find it more difficult to lever yourself up for other assets. You want as much debt as possible if you truly believe in a hyper-inflationary crash.

Generally though, it is better to buy the best priced asset. Mind you, if there really are 80 million people living in the UK as some believe, then are houses really that much over priced?

Surely if you take on as much debt as possible (say repayments of 1k a month) and hyperinflation does happen so your food bill doubles, triples or quadruples then you can't finace you debts (not to mention interest rates matching the inflation wherever possible) so you get screwed and lose everything.

The time to take on debt in a hyper inflationary situation is when the hyperinflation has just come under control and is heading downwards.

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The more I think about it, buying a decent 40ft boat makes more and more sense. You could hide out in the Greek islands for years.

Surely you mean the German islands?

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Surely if you take on as much debt as possible (say repayments of 1k a month) and hyperinflation does happen so your food bill doubles, triples or quadruples then you can't finace you debts (not to mention interest rates matching the inflation wherever possible) so you get screwed and lose everything.

The time to take on debt in a hyper inflationary situation is when the hyperinflation has just come under control and is heading downwards.

I can assure you, the best thing to do is take the large loans out before the hyper inflation. Borrowing during the event will be difficult.

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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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