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wish I could afford one

Do We Live In Times Of Financial Austerity?

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The mainstream media and government would have us believe we are living in a time of Financial Austerity. I've pulled together a lot of my thoughts into a fairly lengthy post and come to the conclusion that it's nothing like Austerity and is actually Financial Repression.

This seems to have worked post WW2 but I don't see it working this time for 2 main reasons:

1. The government deficit is not being reduced to a level that will allow the debt to be eroded in real terms. The only way I see this being fixed is to increase inflation some more. The question is will Mark Carney be brave enough to Engineer it. The government have certainly given him the remit to try.

2. The government and Bank of England have forgotten that in the modern globalised world we won't get the real salary increases needed to keep the average punter 'alive'. The only option would then be to reduce his costs. This also doesn't seem possible as food and fuel prices seem unlikely to fall in real terms over the medium to long term in a world of population increases. That leaves the rent seekers taking a haircut and I can't see that occurring either. So Joe Average is in trouble in the medium term.

I'd value HPC'ers thoughts.

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I say no we don't.

Benefit cuts need to take effect and should in fact go deeper.

We need to see Government spending and vanity projects cut.

Civil Service pension liabilities need to be reduced.

I think we still live in times of being profligate with other peoples' money.

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You can't roll back a decade of benefits in a blink of an eye. There would be anarchy. The elites wouldn't want scratches on the metal gates of the gated community.

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The government and Bank of England have forgotten that in the modern globalised world we won't get the real salary increases needed to keep the average punter 'alive'. The only option would then be to reduce his costs. This also doesn't seem possible as food and fuel prices seem unlikely to fall in real terms over the medium to long term in a world of population increases. That leaves the rent seekers taking a haircut and I can't see that occurring either. So Joe Average is in trouble in the medium term.

Yes- the plan seems to be to combine 'flexible' incomes with inflexible debts- and since the term 'flexible' in this context always seems to mean lower this presents a problem.

The same people in government who call for a more 'competitive' (cheap) workforce are doing all they can to maintain high housing costs- to the extent of taking the taxes paid by people who can't afford to buy a house to prop up the prices of those houses.

Basically as far as I can see the Elites are all over the place- they have constructed this globalised deflation machine and have no idea how to turn it off.

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..

The same people in government who call for a more 'competitive' (cheap) workforce are doing all they can to maintain high housing costs- to the extent of taking the taxes paid by people who can't afford to buy a house to prop up the prices of those houses.

...

Exactly. That's one of the problems I highlighted. It would be possible in our modern globalised world to lower real UK salaries to help our competitiveness without punishing the worker even though inflation of food and energy was still occurring. It would require the rent seekers to take a haircut but I just can't see that happening.

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We can't afford austerity.....that is why we keep spending/borrowing.

That's the reality- if both the state and private sector attempt to contract at the same time the result is a depression- so the cost of true austerity is too high to make it workable. As long as the private sector is deleveraging the public sector is forced to be the 'borrower of last resort- someone has to borrow into existence the money needed to keep the show on the road.

So in reality 'austerity' is a PR gimmick designed to show the 'markets' that there is at least a serious intent to (one day) deal with the deficit.

At some indeterminate future date.

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Exactly. That's one of the problems I highlighted. It would be possible in our modern globalised world to lower real UK salaries to help our competitiveness without punishing the worker even though inflation of food and energy was still occurring. It would require the rent seekers to take a haircut but I just can't see that happening.

I can. ;)

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1. The government deficit is not being reduced to a level that will allow the debt to be eroded in real terms. The only way I see this being fixed is to increase inflation some more. The question is will Mark Carney be brave enough to Engineer it. The government have certainly given him the remit to try.

2. The government and Bank of England have forgotten that in the modern globalised world we won't get the real salary increases needed to keep the average punter 'alive'. The only option would then be to reduce his costs. This also doesn't seem possible as food and fuel prices seem unlikely to fall in real terms over the medium to long term in a world of population increases. That leaves the rent seekers taking a haircut and I can't see that occurring either. So Joe Average is in trouble in the medium term.

I'd value HPC'ers thoughts.

Isn't this the problem, the tension between inflation and deflation?

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Isn't this the problem, the tension between inflation and deflation?

The problem is those with far more than they ever will need so store it or export it, those that earn just enough so spend what they earn but inflation in basics (deflation in non-essentials) is forcing them to spend less to keep within budget without too much adverse affect, they adapt, and those that don't earn enough to live on so get a top up from the state and/or pay day loan co until they reach the max......they are the ones that will have to adapt further. ;)

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Do you really think The Duke of Westminster, The Earl of Cadogan and The Portman family are ready to take a haircut? Have they ever ever the last few hundred years?

They rent to other elites and/or incomers that have so much they don't know what to spend it on. ;)

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They also rent to a lot of businesses that could lower their prices and provide some relief if rents were cut.

Sure but there s a limit to how much business can stretch to.......they also adapt and sell on-line and/or move to places where other people still with some disposable income live to compensate.....places where there is lower debt and growing community needs. ;)

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I'm down to my last two V8's and I only have one harley-Davidson left! :blink:

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You can't roll back a decade of benefits in a blink of an eye. There would be anarchy. The elites wouldn't want scratches on the metal gates of the gated community.

Tsk.

That's what the child labour is for, to polish out the scratches.

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  • 239 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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