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Archie Gemmill

Round & Round The Mulberry Bush

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I am reminded of the media storm about MMR, when I think about the reporting of house price growth. The whole story could have been extingiushed in a moment if the media had been prepared to ever report the fundamental truth versus gossip, opinion, fear,nonsense, conjecture etc. But too many people had too much to gain by spinning it on. Every blip, every slip, every advance, every reverse gets examined as if it is a wholly new thing, For the housing market it is the credit boom that has resulted in an asset boom. Nothing else. We aren't so rich because we have added so much to the world. We merely appear rich until we are asked to pay properly for what we have. The only real issue is how that payment is made. If the BoE does what it says it's going to do the then debtors pay. If not we all do.

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This concerns me most.

The only reason house prices are so high is because money is so cheap.

Gordon Brown will do whatever it takes to pull this economy out the whole he has dug.

Destroying the wealth of savers will certainly be within his scope.

Edited by BandWagon

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IMHO the BoE have not been doing what they say they should be doing (Core Purpose 2 - Financial Stability), as things are looking more and more unstable as time goes on.

Houses probably have been invested in, because the usual saving mechanisms are not seen as stable (e.g. pensions).

Also IMHO The BoE have been made toothless by the government (Core Purpose 1 - Monetary Stability ...... Stable prices are defined by the Government's inflation target).

CPI is not a measure of inflation, it is merely a measure of price inflation of a few selected items. Inflation is the dilution of the existing money by the creation of new money, and inflation has been running at a massive rate which is why houses have gone up in price so much. Simple no?

We will all pay, and quite right too for allowing the dire state of affairs to happen in the first place.

Extracts from www.bankofengland.co.uk website.

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  • 302 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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