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SleepyHead

High House Prices Cause Unemployment

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Recently posted this as a comment on this page, I'd appreciate your views on how to clarify/improve it.

http://news.sky.com/portal/site/skynews/menuitem.ee7913f6661fec1eb2221910413071a0/?vgnextoid=3983bd4834712310VgnVCM1000005d04170aRCRD&vgnextchannel=805b17a021297110VgnVCM1000009811d20aRCRD#commentForm

Thanks! :)

High house prices

leads to...

higher living costs

leads to...

pressure on salaries to keep up

leads to...

less competitive workforce, compared to low wage workers (Chinese, Polish temp labour)

leads to...

Jobs outsourced to low cost economies, or imported cheap workers.

leads to...

Higher unemployment, economic stagnation, home owners & politicians wishing further house price rises to supplement their dwindling income. Exacerbating the problem.

eventually leads to...

Total economic collapse.

Edited by worst time buyer

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Seems fine. Of course you left out (for example, I'm sure there are more)...

  1. Encourages dishonesty, as many are forced to falsify earnings to get a mortgage
  2. Diverts investment money away from business into property speculation
  3. Leads to unstable banks

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Seems fine. Of course you left out (for example, I'm sure there are more)...

  1. Encourages dishonesty, as many are forced to falsify earnings to get a mortgage

  2. Diverts investment money away from business into property speculation

  3. Leads to unstable banks

Good points. I definitely agree with all those.

The 2nd point is massive. All that capital going into a "non-productive" asset.

If I can figure out a way of working them in, and keeping it concise and simple, maybe the powers that be might be able to understand. ..... will have to be kept v simple though. ;):):lol:

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On the other hand in a weird twist, growing unemployment can cause high house prices.

Rising unemployment, falling consumption, downward pressure on real wages, downward pressure on consumer prices, deflation.. slashing interest rates by the central bank.

Which the lowest rates in the 300 year history of the BoE were 1.85%, before this recent crisis where they went down to 0.5%. With such low rates people can bid against each other for houses. Especially those people who either from regulatory protection or market demand still have their jobs and incomes.

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On the other hand in a weird twist, growing unemployment can cause high house prices.

Rising unemployment, falling consumption, downward pressure on real wages, downward pressure on consumer prices, deflation.. slashing interest rates by the central bank.

Which the lowest rates in the 300 year history of the BoE were 1.85%, before this recent crisis where they went down to 0.5%. With such low rates people can bid against each other for houses. Especially those people who either from regulatory protection or market demand still have their jobs and incomes.

Not causation, just desperation.

Propping the pig up will create more unemployment over the longer term.

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On the other hand in a weird twist, growing unemployment can cause high house prices.

Rising unemployment, falling consumption, downward pressure on real wages, downward pressure on consumer prices, deflation.. slashing interest rates by the central bank.

Which the lowest rates in the 300 year history of the BoE were 1.85%, before this recent crisis where they went down to 0.5%. With such low rates people can bid against each other for houses. Especially those people who either from regulatory protection or market demand still have their jobs and incomes.

Good points.

If I understand you correctly, you're saying that those first factors, "Rising unemployment, falling consumption, downward pressure on real wages"

leads to "downward pressure on consumer prices"

which is interpreted by policy makers (incorectly in my view) as "deflation"

resulting in "slashing interest rates by the central bank"

Leading to yet higher house prices. Yet again further exacerbating the problem.

It's like watching a heroin addict trying to cure himself, but using heroin as his medicine.

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Recently posted this as a comment on this page, I'd appreciate your views on how to clarify/improve it.

http://news.sky.com/portal/site/skynews/menuitem.ee7913f6661fec1eb2221910413071a0/?vgnextoid=3983bd4834712310VgnVCM1000005d04170aRCRD&vgnextchannel=805b17a021297110VgnVCM1000009811d20aRCRD#commentForm

Thanks! :)

High house prices

leads to...

higher living costs

leads to...

pressure on salaries to keep up

leads to...

less competitive workforce, compared to low wage workers (Chinese, Polish temp labour)

leads to...

Jobs outsourced to low cost economies, or imported cheap workers.

leads to...

Higher unemployment, economic stagnation, home owners & politicians wishing further house price rises to supplement their dwindling income. Exacerbating the problem.

eventually leads to...

Total economic collapse.

leads to...

Profit!

(All hail the U-P-G!)

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It's like watching a heroin addict trying to cure himself, but using heroin as his medicine.

The best way to get off heroin is to slowly wean yourself off it.

Same with alcohol.

If you just stop, you can die. Addictions tend to b replaced by other addictions.

I'd like to see us wean ourselve off of house speculation and get addicted to housebuilding.

If we build too many we can knock them down and build even better housing.

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The best way to get off heroin is to slowly wean yourself off it.

Same with alcohol.

If you just stop, you can die. Addictions tend to b replaced by other addictions.

I'd like to see us wean ourselve off of house speculation and get addicted to housebuilding.

If we build too many we can knock them down and build even better housing.

What if you're currently overdosing in heroin by a massive amount? I don't think slowly weening ourselves off it is an option any more.

It seems to me the economy is so burdened by debt, and grown so reliant on debt, even a small drop in credit has the system in meltdown.

Credit has distorted everything...... for the worse.

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Unemployment leads to lower house prices... :ph34r:

High lending risk = higher house prices.

Low lending risk = lower house prices.

What you can't borrow you can't buy. ;)

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Recently posted this as a comment on this page, I'd appreciate your views on how to clarify/improve it.

Timely topic.

I have a small business and are we are expanding rapidly, however we are doing this through contracting labour on a daily rate from established businesses. Many of the services we use we could do in house if we employed another 4 or so people however we just do not want to take on this liability.

Talking to one of the business owners we used for the first time yesterday, not only has he cut his workforce significantly he is also moving out of his commercial premisses and resuming working from home as he did 6 years ago. He is much more profitable this way.

I was speaking to another business owner that we used last week and a few years ago he had 80 employees, he discovered that he was making less money with this number of employees than when he started out he is desperately trying to cut back to where he started from. He has the work demand to fulfil his old level of employment but just does not want it.

It is not all house prices as tax and employments laws play there part, but I am convinced of the link to high wage demands. Also high house prices have made myself and business partner greedy in terms of what we want to earn to achieve the living standards we want. Employing people is more becoming a public service than part of a sound business plan these days.

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Timely topic.

I have a small business and are we are expanding rapidly, however we are doing this through contracting labour on a daily rate from established businesses. Many of the services we use we could do in house if we employed another 4 or so people however we just do not want to take on this liability.

Talking to one of the business owners we used for the first time yesterday, not only has he cut his workforce significantly he is also moving out of his commercial premisses and resuming working from home as he did 6 years ago. He is much more profitable this way.

I was speaking to another business owner that we used last week and a few years ago he had 80 employees, he discovered that he was making less money with this number of employees than when he started out he is desperately trying to cut back to where he started from. He has the work demand to fulfil his old level of employment but just does not want it.

It is not all house prices as tax and employments laws play there part, but I am convinced of the link to high wage demands. Also high house prices have made myself and business partner greedy in terms of what we want to earn to achieve the living standards we want. Employing people is more becoming a public service than part of a sound business plan these days.

High house prices are a tax. Landlords are the government.

They collect taxes, they make laws and you cannot opt out without paying them off or choosing another landlord. They have the same relationship with local govt. as local govt. has with Westminster and Westminster has with Europe.

http://libertythinkers.com/education/a-landlord-is-a-government-the-libertarian-basis-for-land-rights/

This is known as the feudal system.

At least the Westminster govt. spends some of the money on Health, Welfare and jobs. Landlords squander all of it on themselves.

So, yes, the reason that the economy is screwed, the reason we have to work harder and for longer despite labour saving modern technology, the reason our children may be worse off despite all the progress, is that all wealth is ultimately siphoned off by unproductive landowners.

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  • 335 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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