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neon tetra

The "property Is My Pension" Meme...

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Britain used to be a rich country. Through the profits from empire and the slavery we became very rich indeed. This has been topped up by things like North Sea Oil. Thus for longer than any of us can remember, we have been able to afford to pay our way. Well-paid jobs, a high standard of living, and high pensions.

Over time this has, as we can all see, changed significantly. Our demographic shift means that we can no longer afford to pay such rich pensions. People's expectations, however, are much slower to change: we still think we deserve bumper pension for 20 years.

This is where property has been a master stroke for successive governments. They have uncovered an excellent way of taking from future generations without people realising it. We can borrow against the next generation's prosperity in order to fund ours. If the next generation are lucky, they will be able to borrow from the following generation as well. Or have 50 year mortgages. We're all rich. Property is your pension, and if enough people believe that, then we're all saved.

As long as the government can produce cleverer and cleverer ways to keep this bubble inflating, we can all enjoy today. Our kids can worry about tomorrow. They can always speculate to borrow from their kids. Can't they?

Property is pension. Freedom is slavery. Ignorance is strength.

[Note to HPC - I know I'm preaching to the converted, I just wanted to get this off my chest and put it into words.]

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We can borrow against the next generation's prosperity in order to fund ours. If the next generation are lucky, they will be able to borrow from the following generation as well.

It what way is borrowing to buy a house and paying off the loan, borrowing from the next generation? You've lost me there.

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It what way is borrowing to buy a house and paying off the loan, borrowing from the next generation? You've lost me there.

Because the increase in your home value is funded by an increase in their debt.

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Because the increase in your home value is funded by an increase in their debt.

Yes, the property is pension idea involves holding on to more, or bigger, properties than you need, in order that you can sell or downsize on retirement. This relies on your extra demand for housing keeping prices inflated, forcing future generations to take on more debt, which, in turn, pays your pension.

Sorry, I should have explained this.

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....governments aka banks have to have land and buildings forever rising.....without that security, that collateral how could debt be forever extended......finite resources that can't move, where the owner can always eventually be traced (and taxes can be extracted) will always be a good secure bet to advance money against......the debtor that can't/won't pay will forfeit their security......otherwise we could borrow and spend it all without ever paying it back, without any consequences.....that is why money will be thrown at houses that are not productive but secure and not at businesses that are productive but not secure. ;)

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What people dont realise, it has to rise more than the purchase price + the amount of interest paid, just to stand still, now over the last 30years thats been possible for alotof people, bit looking forward is an uncertain bet, especially when intererest only, with no repayment vehicle has been such a prevelent tool, for people to afford a mortgage.

Whilst the BOE base rate is at its all time low, alot of people are paying nearly 5% interest on SVR rates (santander SVR is at 4.74%). Yes there is also alot of people paying much less, but these people i would guess are near the end of their mortgage.

People are tripping over themselves to sign upto a 25year + agreement to paying for an assett which os near to and all time high, streaching their affordability to the max, when IRs have only one way to go. But hey its their pension so who am i to dissagree.

Edited by Monkey

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There was the 'white heat of technology' BS from the Harold Wilson/Labour in 63:

http://www.theguardian.com/science/political-science/2013/sep/19/harold-wilson-white-heat-technology-speech

(Oh, made in Scabby too, I didn't know that).

The gist and thinking behind this speech goes along the lines of:

- The other party (COns) are idiots.

- We are genuises.

- By applying our genius to the UK working man we will hugely increase production and profitiabilty in 20 years time.

- So lets start spending the money! oops we mean investing.

A quick revisit to the 70s shows what geniuses they were.

Labour always repeat the same sort of speech.

Moron Brown re-warmed this replacing 'industrial' investment with 'financial'/city - a big state state funded by big finance.

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Britain used to be a rich country. Through the profits from empire and the slavery we became very rich indeed.

B*ll*cks!!!

Portugal had the biggest slave empire in the West in the form of Brazil - is Portugal stinking rich?

How did Sweden, Switzerland, Finland, Denmark, Norway etc become rich - since all these countries either had no empire, or tiny empires, or brief European empires?

Sorry but this beating ourselves up with guilt cr#p does my head in.

Or maybe it isn't guilt in your case, maybe you see yourself of some sort of victim who should be compensated?

Did you ever hear of this thing called the industrial revolution?

Britain did it first.

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B*ll*cks!!!

Portugal had the biggest slave empire in the West in the form of Brazil - is Portugal stinking rich?

How did Sweden, Switzerland, Finland, Denmark, Norway etc become rich - since all these countries either had no empire, or tiny empires, or brief European empires?

Sorry but this beating ourselves up with guilt cr#p does my head in.

Or maybe it isn't guilt in your case, maybe you see yourself of some sort of victim who should be compensated?

Did you ever hear of this thing called the industrial revolution?

Britain did it first.

+100

This self-hating liberal crap is at the heart of many of the mistakes this country has made in the last 50 years.

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Britain used to be a rich country. Through the profits from empire and the slavery we became very rich indeed. This has been topped up by things like North Sea Oil. Thus for longer than any of us can remember, we have been able to afford to pay our way. Well-paid jobs, a high standard of living, and high pensions.

Over time this has, as we can all see, changed significantly. Our demographic shift means that we can no longer afford to pay such rich pensions. People's expectations, however, are much slower to change: we still think we deserve bumper pension for 20 years.

This is where property has been a master stroke for successive governments. They have uncovered an excellent way of taking from future generations without people realising it. We can borrow against the next generation's prosperity in order to fund ours. If the next generation are lucky, they will be able to borrow from the following generation as well. Or have 50 year mortgages. We're all rich. Property is your pension, and if enough people believe that, then we're all saved.

As long as the government can produce cleverer and cleverer ways to keep this bubble inflating, we can all enjoy today. Our kids can worry about tomorrow. They can always speculate to borrow from their kids. Can't they?

Property is pension. Freedom is slavery. Ignorance is strength.

[Note to HPC - I know I'm preaching to the converted, I just wanted to get this off my chest and put it into words.]

Doesn`t work if the next generation won`t/can`t borrow to buy your house, the system breaks down. This is happening now hence all the central bank intervention.

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If the only way out is a wage bubble in the west, wouldn't it be logical to get a big mortgage now fixed for 20 years?

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If the only way out is a wage bubble in the west, wouldn't it be logical to get a big mortgage now fixed for 20 years?

No, because you will be paying too much for the property. The wage increases are not going to compete with the feeding frenzy of Liar Loans that took place, house prices will still drop. The best position to be in is to be employed, mobile, and debt free, that way you can stay employed, soak up the wage rises and buy a house later at a distressed price ? IMO the wage rises are not going to materialise, they just want to keep people believing that it is okay to keep borrowing and spending, there will be another big systemic problem before mass wage rises across the board IMO.

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We need a new bubble, and it's a wage bubble.

No we dont, all that will do is push prices further.

what we need is the government to stop interviening and let the "free" market sort it self out. thats all its has needed from 2007/8. now what they will have is a great unraveling that will take alot more of the economy with it, than in 2008.

Stop:

Local Authority Mortgage Scheme (LAMS)

First Buy

Help to Buy

Help to Buy 2

Funding for Lending

New Buy

Support for Mortgage Interest

tax breaks for Amateur BTLers. (10 properties or less)

and others i missed

Then:

Make banks more responsible for the mortgages they hand out.

Raise BOE IR's to a pre 2008 level.

sit back. the economy would go to pot, but it after a period of sh!t we would be able to build on a good foundation. Wages would rise due to productivity, and demand for our labour and products world wide.

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I don't see an intrinsic problem with PIMP. In order for old people to live on a pension, there has to be a real-time mechanism for transferal of purchasing power from the young and productive to the old and unproductive.

In a state pension system that is done by taxing the productive and paying the old. In a private pension system that is done by the young and productive voluntarily paying money into pension companies who pay out to the old. In the PIMP system, it is done by the young and productive paying either rent or purchase price for their living accomodation, the proceeds of which go to the old.

Its pretty obvious though, that the net payment out to the old is directly related to the payment in from the young minus the profit creamed off by the rich and powerful. That is, the current payments from the current young, and the current pensions of the current old.

Over the long term I would expect a PIMP strategy to work, in that it genuinely does transfer buying power from thw young to the old, but I would expect it to pay out somewhat less on average than the amount paid in i.e. the cost of buying the house.

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Doesn`t work if the next generation won`t/can`t borrow to buy your house, the system breaks down. This is happening now hence all the central bank intervention.

The very time NOT to buy an asset when it is bought through leverage, is when the leverage is cheap.

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I don't see an intrinsic problem with PIMP. In order for old people to live on a pension, there has to be a real-time mechanism for transferal of purchasing power from the young and productive to the old and unproductive.

In a state pension system that is done by taxing the productive and paying the old. In a private pension system that is done by the young and productive voluntarily paying money into pension companies who pay out to the old. In the PIMP system, it is done by the young and productive paying either rent or purchase price for their living accomodation, the proceeds of which go to the old.

Its pretty obvious though, that the net payment out to the old is directly related to the payment in from the young minus the profit creamed off by the rich and powerful. That is, the current payments from the current young, and the current pensions of the current old.

Over the long term I would expect a PIMP strategy to work, in that it genuinely does transfer buying power from thw young to the old, but I would expect it to pay out somewhat less on average than the amount paid in i.e. the cost of buying the house.

In a properly funded pension, the wealth generated by one generation is invested in assets that create more wealth, and part of that is paid back when they retire.

Consider if the pension money had been used to build an efficient rail network, or some power stations, or something like that.

Building new houses would be ideal. Hoarding existing houses doesn't create anything, it only transfers existing wealth from one place to another.

Edit: this matching of savings to investment, the replacement of hoarding and stockpiling with investment, is the whole purpose if banks.

Edited by (Blizzard)

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Building new houses would be ideal. Hoarding existing houses doesn't create anything, it only transfers existing wealth from one place to another.

How can new houses be built when it is strictly prohibited?

I searched for single building plots within a 10 mile radius of Bristol airport and found 1.

Unless the government enable people to build homes again the country will continue to paralyzed in it's current form for antoher 20/30 years and then total collapse when gen X&Y require hundreds of billions in housing benefits to be paid out each year.

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One answer would be to ban property ownership, how many on HPC would vote for that.

...I would vote for ownership......but what we have not got is ownership, we have perpetual debt and rent. ;)

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Unless it stays cheap.

and that cannot last...you do want a pension dont you?

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One answer would be to ban property ownership, how many on HPC would vote for that.

Discussing radical ideas is always guaranteed to derail a thread, still I can't resist.

You can't 'own' land, in the way that you 'own' property. Land isn't property.

I would vote against what we call ownership, which is really just a government licensing scheme, if the alternative was a true free market.

On the other hand, that kind of radical change has risks. Much safer to mimic the free market with a LVT/CI combination.

I'd also vote to ban landlordism, that goes without saying though.

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and that cannot last...you do want a pension dont you?

I don't disagree and I would also like the security of a roof over my head that i can't be kicked out of. I am over 50 and have never bought a property in my life. That said it is not because I can't afford it and could buy a couple at uk average price with cash but I won't.

Edited by buyerbeware

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