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The Extinction Of The Western Middle Class

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For those who are willing to face the truth this is the real reason why you will be poorer than your boomer parents.

It is a difficult reality so I am guessing many will refuse to accept it and we will see the rise of extremist parties and crazy illusions

in the next decade or so. From blaming past generations for 'living beyond their means' to 'the state was too big' or even 'the economy will only recover when the unsustainable debt is paid down' . All wishful thinking, the economy will never recover to the way it was the last 50 years or so. The debt is the symptom not the cause of the relative decline of the west. The simple reality is simply that the world has become much more competitive for the average westerner and the things that past generations took for granted will simply not be available to the mediocre (i.e. the middle class) in the current one.

How China is winning the school race

More than 80% of Shanghai's older secondary students attend after-school tutoring. They may spend another three to four hours each day on homework under close parental supervision.

Such diligence also reflects the ferociously competitive university entrance examinations.

"Not all Chinese parents are 'tiger mothers'," insists Prof Cheng. "But certainly they are devoted to their children's education."

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For those who are willing to face the truth this is the real reason why you will be poorer than your boomer parents.

It is a difficult reality so I am guessing many will refuse to accept it and we will see the rise of extremist parties and crazy illusions

in the next decade or so. From blaming past generations for 'living beyond their means' to 'the state was too big' or even 'the economy will only recover when the unsustainable debt is paid down' . All wishful thinking, the economy will never recover to the way it was the last 50 years or so. The debt is the symptom not the cause of the relative decline of the west. The simple reality is simply that the world has become much more competitive for the average westerner and the things that past generations took for granted will simply not be available to the mediocre (i.e. the middle class) in the current one.

How China is winning the school race

I'm guessing the middle class will be deluded rather than rise against their situation. They have been conditioned to think they are well off and figuring that they are no better off or even worse off than the poor family on welfare is too much for them to take on board.

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??

At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

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??

At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

Living standards aren't exclusively about the housing stock. But on that, I suspect a lot of kids brought up in desirable homes will find they can only afford to raise their kids in former council houses on sink estates.

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Living standards aren't exclusively about the housing stock. But on that, I suspect a lot of kids brought up in desirable homes will find they can only afford to raise their kids in former council houses on sink estates.

So who will be buying the desirable homes when their current occupants die?

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At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

Many a true word ...

http://www.moneyweek.com/investments/property/how-john-prescott-wasted-22bn

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At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

+1

Absent millions of young immigrants.

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China has replaced lost demand from the west with massive investment projects. But absent another source of demand, the wheels will come off eventually. Creditors need debtors more than debtors need creditors

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At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

Correct. If the UK becomes the job / middle class wasteland predicted by the OP, the cost of living will fall in line with what is affordable.

Since we don't import many of the essentials of life from the far east (shelter, food and energy can be and are sourced locally) what this will in effect mean is that we can't afford stuff made in the far east. Looks like people will have to upgrade their iPhone less often and keep their Kia for longer. Of course, what this is going to do to countries who have huge trade surpluses is anyone's guess ;)

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For those who are willing to face the truth this is the real reason why you will be poorer than your boomer parents.

It is a difficult reality so I am guessing many will refuse to accept it and we will see the rise of extremist parties and crazy illusions

in the next decade or so. From blaming past generations for 'living beyond their means' to 'the state was too big' or even 'the economy will only recover when the unsustainable debt is paid down' . All wishful thinking, the economy will never recover to the way it was the last 50 years or so. The debt is the symptom not the cause of the relative decline of the west. The simple reality is simply that the world has become much more competitive for the average westerner and the things that past generations took for granted will simply not be available to the mediocre (i.e. the middle class) in the current one.

How China is winning the school race

I don't think the best of Britain is in anyway inferior to the best of China. It is just that there isn't enough of these.

After China has grown enough and enjoyed the comfort, they will become complacent, as the west had been in the past 50 years.

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Correct. If the UK becomes the job / middle class wasteland predicted by the OP, the cost of living will fall in line with what is affordable.

Since we don't import many of the essentials of life from the far east (shelter, food and energy can be and are sourced locally) what this will in effect mean is that we can't afford stuff made in the far east. Looks like people will have to upgrade their iPhone less often and keep their Kia for longer. Of course, what this is going to do to countries who have huge trade surpluses is anyone's guess ;)

I'm given to understand that my kia was made in slovakia.

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Correct. If the UK becomes the job / middle class wasteland predicted by the OP, the cost of living will fall in line with what is affordable.

Since we don't import many of the essentials of life from the far east (shelter, food and energy can be and are sourced locally) what this will in effect mean is that we can't afford stuff made in the far east. Looks like people will have to upgrade their iPhone less often and keep their Kia for longer. Of course, what this is going to do to countries who have huge trade surpluses is anyone's guess ;)

We can sit around and enjoy their products.

They can sit around and enjoy our paper.

Everyone's happy.

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At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

They will most probably be sold by their owners to pay for their old age so little inheritance.

The most desirable will be bought by a highly skilled global elite.

There might be an interim period of instability with revolutions and/or dictators until the local population accept their reduced situations.

If they destroy too much then the country will just become an insignificant underdeveloped backwater but I'm not that pessimistic ....

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We can sit around and enjoy their products.

They can sit around and enjoy our paper.

Everyone's happy.

Meh, at least they can burn the paper for fuel.

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Another potential flaw in the OP's thesis worth pointing out is demographics. Both the West and China will get hit hard with that one, but who will get hit the hardest?!

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Of course, China's demographic time-bomb will have no effects on all of these theories of Chinese dominance.

Not that they're exempt, but I always thought South America was the better long term bet.

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If it was a cee’d, or Sportage then yes, otherwise... imported.

Isn't this because these models are largely based on other makes already running on the Slovak production line?

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Isn't this because these models are largely based on other makes already running on the Slovak production line?

No I think Kia own the factory, although it does make one Hyundai model. I can't help feeling we are missing the point somewhat, as cars made in the west would fall in price due to the reductions in the cost of living / available salaries. Cars (and everything else) imported from the east would soar in price, and become far less attractive.

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At some point, either the houses stand empty, get inherited, or the price falls. The only way the coming "middle class" will be excluded from these houses over the long term is if the houses magically cease to exist.

Pull them down to keep asset prices high?

You missed out the hundreds of thousands of homes which will be sold to pay Mum/Dad's care home fees. Any assets over £16K (including property) mean you pay your own fees from the sale of the house. Fees are currently around £500-800 a week.

Many, many middle class kids relying on inheritance are going to be sorely disappointed. And as everyone is living longer, while they grow bodily more frail, the numbers of disappointed legacy beneficiaries will steadily increase.

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You missed out the hundreds of thousands of homes which will be sold to pay Mum/Dad's care home fees. Any assets over £16K (including property) mean you pay your own fees from the sale of the house. Fees are currently around £500-800 a week.

Who are they selling them to ?

The point is that they will be sold, and if nobody is making enough money to pay today's inflated prices, they will be sold for less, and less, and less. Care home fees would drop if people will work for lower wages.

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I think history shows that the middle class always get wiped out in economic crisis. The poor have nothing anyway, the rich the means to pay people to dodge.

The issue is though not getting wiped out, but having the ability to recover. There are plenty of "middle class" non jobs that won't be sustained in a serious economic crisis, so not only will they lose their money, but also they won't have the ability to earn more. These will be the ones that truly get wiped out. People than can actually do something useful will be the ones who gain the most, because although their savings may be wiped, their ability to earn in the new environment after a reset to zero will allow them to recover faster than the non jobbers.

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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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