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Bbc's Robert Peston Muses About A "house Price Crash"

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All talk about mortgage holders needing low interest rates, not one mention of the fact the government requires near 0% rates to support deficit spending. I can't see rates voluntarily going up until the deficit has narrowed, and I don't see any incentive to narrow the deficit.

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All talk about mortgage holders needing low interest rates, not one mention of the fact the government requires near 0% rates to support deficit spending. I can't see rates voluntarily going up until the deficit has narrowed, and I don't see any incentive to narrow the deficit.

Money, rip.gif

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What I would like to know is why are none of the political parties talking about this?......are they trying to hide something? how can they see and plan for a sustainable future when they themselves are in denial....heads in the sands not opening that envelope with the bill in it......all they are interested in in is wining and lasting five years..........many more of our young people are poorer, because accumulating debt is not accumulating riches unless you plan to default to start again.....live for the moment, for tomorrow we may be trading in beans and toast. ;)

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So it is not a problem at all that the super low IRs caused house prices in London to grow 30/40% of the 2007 peak and make the indebtness even higher ...

We will keep the IRs super low to continue with the current inflation madness as every Uk citizen is a property speculator ...

I am OK that the government and politicians and BoE experts are economical idiots. But now even the independent jurnos are economical idots too. Is not there a single person with some level of authority to show how this is going to end up in tears ???

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Why should debt owners with unearned tax free equity ( in some cases ) be supported over savers ( earned taxed money ).

I think he means the bankers need supporting, not the debtors. They can had the keys back and go tell the parasites to f**k off.

Does he want us all to cash in an ISA and buy a f**king violin ?

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Why should debt owners with unearned tax free equity ( in some cases ) be supported over savers ( earned taxed money ).

I think he means the bankers need supporting, not the debtors. They can had the keys back and go tell the parasites to f**k off.

Does he want us all to cash in an ISA and buy a f**king violin ?

Why should they want your worthless saved peanuts when they have been getting debt earned interest for free.....savers are not assets you know they are liabilities. ;)

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Why should they want your worthless saved peanuts when they have been getting debt earned interest for free.....savers are not assets you know they are liabilities. ;)

2 sides of the same coin, well, it used to be :lol:

It sounds to me that he's realised london is collapsing and is getting his prediction out there early.

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What I would like to know is why are none of the political parties talking about this?......are they trying to hide something? how can they see and plan for a sustainable future when they themselves are in denial....heads in the sands not opening that envelope with the bill in it......all they are interested in in is wining and lasting five years..........many more of our young people are poorer, because accumulating debt is not accumulating riches unless you plan to default to start again.....live for the moment, for tomorrow we may be trading in beans and toast. ;)

Because there is no difference (in economics) between them?!

Labours plan to rescue britains multi trillion pound problem...cap banker bonuses. Yep, that'll turn the ship around.

Parties only talk about issues which affect a tiny amount of people, that nonetheless polarize opinion, and that don't upset the ability of politicians to carry on with their theft.

Think gay marriage...its like the debate throughout the west. What the feck does it matter. Its immaterial. It has no bearing on 99% of peoples lives either way (and only a superficial baring on the other 1% given civil partnerships contain the same rights) yet apparently its an important issue.

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2 sides of the same coin, well, it used to be :lol:

It sounds to me that he's realised london is collapsing and is getting his prediction out there early.

Your hard worked for taxes are paying the interest on yesterdays spending.....that is not getting richer, paying for yesterdays good times. ;)

Edited by winkie

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Your hard worked for taxes are paying the interest on yesterdays spending.....that is not getting richer, paying for yesterdays good times. ;)

I think the difference is that one set of magic beans has been earned and taxed and the other unearned and untaxed. In a fair society the former has to be rewarded over the later else you end up with an unsustainable eocnomy....exactly where we are now.

Like I was saying yesterday, them with the magic beans wont give up their imaginary magic unearned/untaxed magic beans until forced to through some massive event.

Edited by TheCountOfNowhere

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Is interesting article.

I've always wondered what would force the BOE to increase interest rates, consumer price Inflation is obviously muted because domestic demand is supressed by all that debt. But a good old fashioned sterling crisis.

That might be just the ticket.

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Your savings are worth nothing, your labour is worth little....all we want are your land and buildings, worth lots....if you ain't got that you are as good as useless. ;)

Edit: Oh yes your spending power has value......now let me think, where will that come from?

Edited by winkie

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Your savings are worth nothing, your labour is worth little....all we want are your land and buildings, worth lots....if you ain't got that you are as good as useless. ;)

Edit: Oh yes your spending power has value......now let me think, where will that come from?

I know I know....our made up untaxed unearned unliquid magic beans ?

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The fact is, the current situation is fragile. We can argue all day about how the correction might be triggered, it can be all manner of reasons. Someone will guess right, someone will guess wrong. But like a ship veering towards some rocks, its a good bet it'll be holed at some point. By which rock? Who cares. Thats not the important bit. Where its heading is the important bit, and thats not changing.

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So the current account deficit, already worryingly large, could widen even more.

In those circumstances, the risk is of a sudden and precipitate fall in the value of sterling - what used to be called a sterling crisis - as investors panic about the ability of the UK to service rising indebtedness.

That of course would bring the danger of a sharp rise in inflation, and would force the Bank of England to raise interest rates much sooner and by much more than it would like.

Is he kidding?! Boe would be delighted if sterling would sell off, grabbing demand from EZ and elsewhere and causing inflation to rise.

The last thing they would do is raise interest rates to prevent it.

You wonder what planet these people are on (Oh yeah, Planet BBC 'Talent')

Why Does Peston think the Boe crashed rates in 2008/9 and have kept them there for the last 5 years?! Precisely to lower sterling. Claiming that they would want to raise interest rates now to prevent sterling falling is risible. He's an idiot.

Edited by R K

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He's an idiot.

His piece has rationale and a basis in observable reality, and he is respected amongst his peers for what he brings to the table.

You, on the other hand?

I keep asking for rationale or mechanism summary behind your bizarre wage rise mantra and have never ever heard anything back that could be considered reasonable or rational.

I'd take what he has to say over what you have to say any day of the week. What makes you a self proclaimed expert? Do you have a job in a related field? Your arrogance is ridiculous.

Edited by cybernoid

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Is he kidding?! Boe would be delighted if sterling would sell off, grabbing demand from EZ and elsewhere and causing inflation to rise.

The last thing they would do is raise interest rates to prevent it.

You wonder what planet these people are on (Oh yeah, Planet BBC 'Talent')

Why Does Peston think the Boe crashed rates in 2008/9 and have kept them there for the last 5 years?! Precisely to lower sterling. Claiming that they would want to raise interest rates now to prevent sterling falling is risible. He's an idiot.

I read it as in relation to wage inflation. I am not sure if there are comments on further and sustained drop in living standards.

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http://www.bbc.co.uk/news/29701765

You know what would follow from that - hundreds of thousands of households still burdened by huge debts accumulated during the boom years would struggle to keep up the payments. House prices would crash.

Some of the elderley sellers on market at £500,000+, going into care, or their inheritors (and as I was told, some years ago anyway, you need to settle IHT liability before probate can be granted).... may also find fewer upsizers / MMR blocked buyers / more hpc convertors not interested in their asking prices.

Only needs a few owners to cut asking prices, or accept lower offers from buyers.... to bring down values to the same price transaction level of value for the masses of other owners.

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