Currency Crisis Dead Ahead

[SleepyHead]

Edited October 20, 2013 by SleepyDog

[honkydonkey]

London property market mentioned at 4:15. That was good to listen to. There seems to be alot of videos along a similar theme right now, I think people are finally understanding what's going on isn't sustainable.

Edited October 20, 2013 by honkydonkey

[scrappycocco]

What happens to property in a currency crisis?

[zugzwang]

What happens to property in a currency crisis?

Indian property is looking decidedly soggy.

Housing slump in India

[Frank Hovis]

Indian property is looking decidedly soggy.

Housing slump in India

But with sellers refusing to cut prices, many potential buyers are losing interest. Devkinandan Agarwal, a Mumbai broker with three-quarters of his business in residential real estate and the rest in commercial real estate, said that until the last few months, he had at least three or four separate meetings each day with genuine, interested buyers; now he has only one a day.

“There are now only actual users in the market, there is hardly anyone buying real estate as an investment,” he said.

That's the end of the speculative bubble there, now for London.

[The Masked Tulip]

Fivelive business programme reporting that Central London HPs up 10% in a month - asking whether it is a bubble.

[Venger]

What happens to property in a currency crisis?

The pound sterling buys loads more against their £5 to £7 trillion hyper-inflated house market. Hopefully.

Urghh just listened to the first bit from 4:15 and he thinks the bubble is in money, not in individual asset classes. GTFO.

[Fully Detached]

Urghh just listened to the first bit from 4:15 and he thinks the bubble is in money, not in individual asset classes. GTFO.

The whole podcast was destroyed by the last 20 minutes gold ramping. I'm a fan of gold myself, but ramping like that devalues whatever more balanced arguments may have come earlier and makes the whole thing seem like the ZeroHedge roadshow.

[sombreroloco]

What happens to property in a currency crisis?

In theory it should rise exponentially.

[davidg]

In theory it should rise exponentially.

Or fall, depending on the currency.

[tomandlu]

In theory it should rise exponentially.

But why would anyone sell?

[Bloo Loo]

In theory it should rise exponentially.

And locals priced out and finally rebellion.

[zugzwang]

But why would anyone sell?

They may have to meet margin calls on their other trades.

[SleepyHead]

Fivelive business programme reporting that Central London HPs up 10% in a month - asking whether it is a bubble.

Incredible. They won't understand until the Pound is in total collapse one morning. ..... maybe even then they'll joyfully report "house prices up 50% this morning"

[@contradevian]

http://www.thedailymash.co.uk/news/society/london-property-only-affordable-to-extraterrestrials-2013102180516

[eztiger]

Incredible. They won't understand until the Pound is in total collapse one morning. ..... maybe even then they'll joyfully report "house prices up 50% this morning"

+1 lol

[zugzwang]

Incredible. They won't understand until the Pound is in total collapse one morning. ..... maybe even then they'll joyfully report "house prices up 50% this morning"

Houses doubling in price every seven months? Osborne's Death Bubble.

[evetsm]

But why would anyone sell?

unable to meet mortgage payments as rates and unemployment soar and salaries lag.

[Guest]

Apologies if this is answered in the video (at work so can't watch).... if the Chinese (for example) owners of London property all decide they want to sell in a hurry, apart from dropping house prices, what does that do to the GBP to Chinese Yuan exchange rate? In my mind there would be less demand for GBP because they sell the house, and convert their GBP back to Yuan.... which would lead to further weakening of the GBP?

[crashmonitor]

Apologies if this is answered in the video (at work so can't watch).... if the Chinese (for example) owners of London property all decide they want to sell in a hurry, apart from dropping house prices, what does that do to the GBP to Chinese Yuan exchange rate? In my mind there would be less demand for GBP because they sell the house, and convert their GBP back to Yuan.... which would lead to further weakening of the GBP?

Meanwhile the rush to buy and build their Chrystal Palace follies in London (and seeing the UK as the fastest paced growth in the developed world to boot) is seeing the pound trading at close to recent highs.

Absolutely false, of course, you would have thought the 2007-2009 slump in the pound during the last house price crash would have served due warning.

http://www.investing.com/currencies/gbp-usd-chart

Edited October 21, 2013 by crashmonitor

[SleepyHead]

Houses doubling in price every seven months? Osborne's Death Bubble.

That's officially the name for it from now on.

[darwin]

Osborne's Death Bubble.

Classic

[sombreroloco]

But why would anyone sell?

Because it's the market, they want to trade it with paper money.

But in a long term perspective of actually swapping gold for real estate, the market value doesn't count much.

[tomandlu]

Because it's the market, they want to trade it with paper money.

But in a long term perspective of actually swapping gold for real estate, the market value doesn't count much.

Paper money that loses its value as soon as the trade is complete, as opposed to hanging on to a house whose paper-value is rising exponentially? And if, as some have proposed, this takes place in a stagflation environment with very laggy wages, who can actually afford these exponential prices? I can only conclude that, without inflation-matching wage increases, houses cannot increase in value to any great extent (or, at least, you won't have any buyers willing to match the price tag).

So... either classic wage/price inflation, some lag so a few forced buyers, but the majority staying put, or stagflation, people trying to stay put, many failing (defaulting), but no one able to pay high prices for property. Either that, or the government just starts giving people money to buy houses and then declares, without a hint of irony, that houses are affordable.

And, yes, I'm aware that we are to some extent watching variations of the above scenarios, but I'm largely thinking of a very high-inflation environment.

[zugzwang]

Paper money that loses its value as soon as the trade is complete, as opposed to hanging on to a house whose paper-value is rising exponentially? And if, as some have proposed, this takes place in a stagflation environment with very laggy wages, who can actually afford these exponential prices? I can only conclude that, without inflation-matching wage increases, houses cannot increase in value to any great extent (or, at least, you won't have any buyers willing to match the price tag).

So... either classic wage/price inflation, some lag so a few forced buyers, but the majority staying put, or stagflation, people trying to stay put, many failing (defaulting), but no one able to pay high prices for property. Either that, or the government just starts giving people money to buy houses and then declares, without a hint of irony, that houses are affordable.

And, yes, I'm aware that we are to some extent watching variations of the above scenarios, but I'm largely thinking of a very high-inflation environment.

Why stop at giving out money to buy houses? Osborne and Carney could give each and every one of us a billion pounds and collectively we could buy everything in the world!

Edited October 24, 2013 by zugzwang