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Stainless Sam

A Pretty Simple View Of Where We Are

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In a nutshell, here's a simple statement where we are and what happens next, courtesy of the Torygraph. Complete with a bit of Daily Star style titillation to get folks interested. Ooh, er Missus.

http://blogs.telegraph.co.uk/news/seanthomas/100213260/what-steamy-sex-with-a-nurse-taught-me-about-daves-plan-to-get-back-to-no-10/

I reckon were about as furked as his doctor.

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In a nutshell, here's a simple statement where we are and what happens next, courtesy of the Torygraph. Complete with a bit of Daily Star style titillation to get folks interested. Ooh, er Missus.

http://blogs.telegra...-back-to-no-10/

I reckon were about as furked as his doctor.

Three years ago when the Coalition/Tory economic masterplan was first revealed it was observed on here to be predicated on a dramatic expansion of private sector borrowing, starting around 2013 and running through to the General Election. Since the economy was unlikely to be growing at anything like the rate needed to accommodate debt creation on that scale this could mean one thing only: a speculative bubble in property prices.

As ruinous as that prospect seemed then the reality today is more ruinous still. The UK has barely grown since 2008 despite an additional trillion pounds of sovereign debt being spent into it by successive govts. While George Osborne once promised to deliver a balanced budget by 2015, it is apparent that a primary deficit of >6% will be needed to prevent the economy from contracting. Private sector debt has contracted a little - aided by ZIRP and write-downs - but is still running at bubble levels, with the govt acting as enabler determined to drive it to fresh, all-time highs.

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Isn't it just another one of those articles that says Buy Now, Prices Already Rising? Just as we had in the middle of the last crash, except he cites the builders arriving as some kind of definite sign. Didn't builders arrive in Eire & Spain too?

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In a nutshell, here's a simple statement where we are and what happens next, courtesy of the Torygraph. Complete with a bit of Daily Star style titillation to get folks interested. Ooh, er Missus.

http://blogs.telegraph.co.uk/news/seanthomas/100213260/what-steamy-sex-with-a-nurse-taught-me-about-daves-plan-to-get-back-to-no-10/

I reckon were about as furked as his doctor.

As house prices rise again, homeowners will become more confident. This means they will go out and spend money, which will spur growth. Thus the deficit comes down. Meanwhile, those first time buyers are also happy: injecting further confidence.

There is a name for this:

http://en.m.wikipedia.org/wiki/Magical_thinking

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Dont worry. It cant last long. The fact rates are at zero and growth is still non-existent shows the ponzi has run its course.

We are not Japan, we dont have a 10% trade surplus to offset 10% deficits, as they had for 20 years. The pound for this reason will not defy gravity, inflation will become very visible, rates will rise, and the whole thing will crash.

Then we have the govt response of either hyperinflation, to rid us of debts that way (very nasty indeed) or some kind of Cyprus wealth grab on steroids to turn the debts into assets.

I suppose the most sensible scenario is some cash some gold to prepare for both.

I still hope we can make it to 2015, we end up with a hung parliament or labour tory coalition and it takes both parties down with it.

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Dont worry. It cant last long. The fact rates are at zero and growth is still non-existent shows the ponzi has run its course.

We are not Japan, we dont have a 10% trade surplus to offset 10% deficits, as they had for 20 years. The pound for this reason will not defy gravity, inflation will become very visible, rates will rise, and the whole thing will crash.

Then we have the govt response of either hyperinflation, to rid us of debts that way (very nasty indeed) or some kind of Cyprus wealth grab on steroids to turn the debts into assets.

I suppose the most sensible scenario is some cash some gold to prepare for both.

I still hope we can make it to 2015, we end up with a hung parliament or labour tory coalition and it takes both parties down with it.

Shhhhh UKIP it to yourself won't you. The storm is brewing an ever stronger wind as Osborne and Cameron did not heed the warnings of the last bump. The next bump will hurt more even if it is quieter. Mark my words...this game cannot possibly work to bring us out of economic mire.

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I'm not sure that credit can be expanded any further (household and commercial borrowing has barely shrunk), lending growth year on year is firmly in negative territory and has been deteriorating since June of last year (the FLS scheme was introduced in July 2012).

* EDIT * N.B. Obviously credit, or total indebtedness can expand if the government run massive deficits, I just do not think households and buinsesses are willing to do this.

Edited by GradualCringe

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Obviously credit, or total indebtedness can expand if the government run massive deficits, I just do not think households and buinsesses are willing to do this.

Which the UK can't do, with the credit-rating agencies on sovereign debt, and the markets themselves, ready to check such attempts.

http://www.guardian.co.uk/politics/2013/feb/27/david-cameron-uk-reducing-deficit

We've already had run that deficit policy to the maximum under Labour's decade of boom, then the following bailouts onto govs books - which is all accounted for by markets - to stave off collapse, including hundreds of billions of QE.

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As house prices rise again, homeowners will become more confident. This means they will go out and spend money, which will spur growth.

They so love the word "spur" as if it's a solve everything word.

They've been "spurring" this that and the other for ages now but Britain is no further on.

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Today's Times reports pretty much what you're saying Sam

http://www.thetimes.co.uk/tto/business/industries/construction-property/article3756979.ece

The average price of a home in Britain could reach £300,000 by the end of 2015 because the Government’s Help to Buy scheme risks inflating a new housing bubble.

In a scathing attack on the Chancellor’s plan, announced in the Budget, to get more people on to the housing ladder, a financial consultancy run by former Bank of England economists said that the scheme could push up prices by almost 30 per cent from the current

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We are not Japan, we dont have a 10% trade surplus to offset 10% deficits, as they had for 20 years. The pound for this reason will not defy gravity, inflation will become very visible, rates will rise, and the whole thing will crash.

I anticipate the heat to start to be turned up if reported inflation gathers pace. Unfortunately I also expect continued manipulation and massaging of the inflation measures, and attempts to divert attention elsewhere (Carney and nominal GDP figures for example). They will sit tight as barnacles as long as they possibly can.

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Mark my words...this game cannot possibly work to bring us out of economic mire.

I think the point of the article is that getting us "out of the economic mire" is less important to politicians than winning the next election.

I further suggest that this fact is part of the reason we are in the economic mire in the first place.

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I think the point of the article is that getting us "out of the economic mire" is less important to politicians than winning the next election.

I further suggest that this fact is part of the reason we are in the economic mire in the first place.

Makes you think so........maybe if they were paid by results it might help instead of saying something as if they were doing it or were planning on doing it but don't do it....middle class Britain are not stupid when it comes down to what they see happening on the ground......now all they seem to be promoting the take on of ever more personal debt to people that can't afford to pay it, so we all end up paying for it.....strange state of affairs.

Get the fixed costs down, then there will be space to grow....when people feel safe and have regular secure employment and spare money then they will spend it.....people have room to make big cut backs if forced into a corner. ;)

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  • 244 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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