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LuckyOne

If Carlsberg Did First Posts ....

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Looking at those is quite eye watering, thing is if the same mean line was drawn on the bottom graph and used to give us a realistic price for a house then it would probably be correct, circa £40-50k.

Nutters drove prices to the current level of unaffordability, if they fell back to £50k then everyone would be able to buy one without selling their Grandmother on eBay.

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That graph is cool. I think the two will breakdown though as they encounter a "singularity". i.e. the printing of vast sums of money leading to inflation

The $64,000 or $1,000,000,000,000,000 question is whether the velocity of money slows down sufficiently with each round of printing that prices remain relatively static or even fall.

The evidence from Japan, the US and the UK suggests that the collapse in the velocity of money can offset printing for an extended period of time (see what I did there?). The evidence from the Weimar Republic and Zimbabwe suggests that printing catches up with you eventually.

In my view, the graph that adamant posted (and apologies if my link to his or her OP didn't make it clear enough that it was his work and not mine and his or her first post which I thought was excellent) will have time to develop further before additional printing overwhelms collapsing velocity.

Edited by LuckyOne

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Is the top graph engineered to look like the bottom graph or is it a reflection of other economic cycles?

Many years ago, someone on this forum posted graphs showing other bubbles in history and their shape and then compared them to Kondratieff and other cylce theories and there was a good correlation. That then forms a model wave for predicting how other bubbles may work giving the graphs more credibility.

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What a load of old c*ck that is. Really.

May as well have posted a piece of toast with the face of Jesus on it, it would be more credible (not to say, edible)

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What a load of old c*ck that is. Really.

May as well have posted a piece of toast with the face of Jesus on it, it would be more credible (not to say, edible)

Thanks for your valuable contribution to this thread, we'd be lost without it :rolleyes:

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Actually, according to the graph on the HPC home page, inflation-adjusted prices are currently below trend. It's looking like we're heading to another trough similar to the bottom in 1995, but I don't see the fall being as steep as the 'bubble.jpg' curve suggests.

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I would have thought that if house prices go down further the gold price will continue to increase. Only once house prices plateau and become safe again will people sell gold to buy bricks meaning that gold will decrease. Therefore, the graphs of gold and house are not easily comparable and operate on slightly different time dimensions.

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So worth a *bump* for the evening.

It is indeed.

A very well researched piece by a newcomer that is probably more informational for other newcomers than regulars but also very important for regulars who tend to lose faith from time to time.

The data are clear.

We are following a classic bubble pattern and we are on the verge of a major bursting of the bubble.

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It is indeed.

A very well researched piece by a newcomer that is probably more informational for other newcomers than regulars but also very important for regulars who tend to lose faith from time to time.

The data are clear.

We are following a classic bubble pattern and we are on the verge of a major bursting of the bubble.

Definately.

It seems that the 'Return to normal' phase was a bit drawn out, but with ZIRP and the banks being told to be 'nice' to people who can't pay, that is to be expected.

From here on out the trend will be downwards.

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We are following a classic bubble pattern and we are on the verge of a major bursting of the bubble.

I'd like to see it, but besides external factors (Euro meltdown), what will the catalyst be?

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Sorry for "bursting the bubble" but the first graph shows a bubble forming and then popping. The other graph shows a house price crash, and then another bubble and then the start of another crash.

So where you have "first sell off" on the first graph, you have Great Crash One.

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OK, so I've rung up Grand Designs, and you'll see me shorty starting my self build out of gold bricks.

Better make it a bungalow, gold goes soft if you stack it.

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I'd like to see it, but besides external factors (Euro meltdown), what will the catalyst be?

The price action in the market itself will be the catalyst. Bubbles are psychological rather than logical. Current sales volumes mean that prices are not at a market clearing level. They will get to a market clearing level at lower prices which will set off a vicious cycle of lower prices and the bursting of the bubble will become a self fulfilling prophesy.

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Just make sure you're well strapped in and remember to swallow as we lose altitude on the way down.

I'm feeling queasy because if the prediction implied by these charts comes true, it will mean the unravelling of an entire economic system. An economic system based on theft, lies and debt, granted, but it's going to be a very rough ride down.

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I think you're right. I want to see the deceit and theft end, but as time has gone on I think we've all acquired some wisdom and insight here. If it goes like the top graph, it is going to be grisly. We should all wish each other luck.

So should I stock up on Fava beans then? :P

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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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