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Oh Dear, What Now? More Stimulus In The Autumn Statement?


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HOLA441

Far more likely that he just wants to pump up the economy ahead of the next election and is using the doom and gloom as an excuse for doing it.

A lot of people on here said George shot his bolt too early with HTB, and MMR has taken some of the wind out of the sails of the housing market.

How much in borrowing/printing room does UK have until markets ? It seems it's catching up to be very real, with all the £1bn a week repayments in interest.

Traditionally during the run-up to an election, chancellors like to dangle carrots in front of voters. But the Conservatives may have to survive without that strategy when they try to rally votes next year: analyst Samuel Tombs, senior UK economist at Capital Economics, reckons the chancellor "will be forced to acknowledge in December's Autumn Statement that the fiscal consolidation is not going to plan, limiting his scope to announce pre-election sweeteners". That could mean further budget cuts - not the ideal way to entice voters away from the opposition.

We can't blame David Cameron if the eurozone stumbles into ...

The Guardian (blog)-31 minutes ago

It's not so fine to jeer simply because borrowing is much higher than ...

http://www.theguardian.com/politics/blog/2014/nov/17/david-cameron-eurozone-recession-warning-not-his-fault-michael-white

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HOLA442

I'd go with this. No one who expected there to be problems would when you about it as they don't want to be associated with it.

Hence 2007,everything is booming one minute, it started in America the next.

Actual problems are always 'unexpected', I. E. Not our fault.

Who cares where they scapegoat the blame, if low-mid-high prime HPC starts to beat down against the extreme hpi.

Perhaps this is his way of warning people about the forthcoming crash which is out of the government's hands?

Would like to believe that, but as wonderpup claims, buyers are too busy pushing and falling over themselves to pay high prices now.

imo - the majority of homeowners thinking hpi is locked in, and looking at those who think prices can fall, without reflating back again soon after, as 'strange'. Too few houses you see, population growth, and so on.

We might read into hints, the majority would need Cameron doing or saying something really far-out, to even get the majority to pause from counting their hpi.

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HOLA443

http://blogs.telegraph.co.uk/news/danielhannan/100108749/printing-money-is-the-last-resort-of-desperate-governments-when-all-other-policies-have-failed/

"

'Printing money is the last resort of desperate governments when all other policies have failed'

So said George Osborne in January 2009

Replace desperate with corrupt and you be closer to the mark I think.

If they resume Q.E. I'd personally start to protest outside of parliament.

They wont need to will they? So many guarantee's to the banks now that the banks dont have to worry about effectively printing themselves.

Oddly when Barclays creates a few billion out of thin air, people dont treat it the same way as the BoE creating a few billion out of thin air.

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HOLA444

A very doom laden speech to the G20, which has supposedly upset European equity markets this morning, but the 0.5% contraction in Japanese GDP for Q3 was probably more telling.

I either read somewhere this morning (or heard it on the Today programme) that it was actually a coded message to the UK public that bad economic times were on the way so this was no time to elect a Labour government. Meantime he is doing his best for HPC regulars by crushing world economic sentiment.

Edited by crashmonitor
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HOLA445

A very doom truth laden speech to the G20, which has supposedly upset European equity markets this morning, but the 0.5% contraction in Japanese GDP for Q3 was probably more telling.

I either read somewhere this morning (or heard it on the Today programme) that it was actually a coded message to the UK public that bad economic times were on the way so this was no time to elect a Labour government. Meantime he is doing his best for HPC regulars by crushing world economic sentiment.

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HOLA447

They wont need to will they? So many guarantee's to the banks now that the banks dont have to worry about effectively printing themselves.

Oddly when Barclays creates a few billion out of thin air, people dont treat it the same way as the BoE creating a few billion out of thin air.

It's amusing when hardcore BTLers point finger at how banks create money out of nothing, in disgust - and to position themselves for future victimhood (knowing the HPC softhearts, they will get the excuses)... with their portfolios of loads of houses and tenants they are doing a service to tenants.

[..]In other words, everything we know is not just wrong – it's backwards. When banks make loans, they create money. This is because money is really just an IOU. The role of the central bank is to preside over a legal order that effectively grants banks the exclusive right to create IOUs of a certain kind, ones that the government will recognise as legal tender by its willingness to accept them in payment of taxes. There's really no limit on how much banks could create, provided they can find someone willing to borrow it. They will never get caught short, for the simple reason that borrowers do not, generally speaking, take the cash and put it under their mattresses; ultimately, any money a bank loans out will just end up back in some bank again. So for the banking system as a whole, every loan just becomes another deposit. What's more, insofar as banks do need to acquire funds from the central bank, they can borrow as much as they like; all the latter really does is set the rate of interest, the cost of money, not its quantity. Since the beginning of the recession, the US and British central banks have reduced that cost to almost nothing. In fact, with "quantitative easing" they've been effectively pumping as much money as they can into the banks, without producing any inflationary effects.

At least some of them realise they are on the hook - not just, "It's the banks to blame for creating money/debt - I worked so hard for my portfolio of 25 houses in London."

However banks make, create or borrow money is frankly their business and not any of ours.

We choose to borrow it, they don't force us to become property investors and take out mortgages.

If we then default, we have failed as business people and have to take what's coming.

It's pretty simple really.

http://propertytribes.com/west-bromwich-building-society-tracker-rate-hike-t-9096-10.html

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HOLA448

Wow, that's world-changing technology. Who says British entrepreneurs aren't world-class?

True, it was the first link I could remember showing how many entrepreneurs have to go without - vs high rents / high house prices.

There will be plenty of others with smarter ideas, who just struggling to survive - not able to push forward their ideas. And if the VI had their way, they would be lured into HTB.

Less like days of Paul Mason who could do some half-baked acting show on the road (or similar) travelling the country... having just moved to London to rent/buy in mid 90s.

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HOLA4412

The echo housing bubble is manifestly collapsing, without that support the UK economy needs £140-150bn of additional deficit spending every year to hold it out of recession. But the interest on the national debt is now >£1bn per week so we're already perilously close to a terminal debt spiral. One last fiscal blow-out in the Autumn statement is my guess, and then they let things crash hard in 2015. A house price slump and a return of the secular bear in equities.

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HOLA4413

The echo housing bubble is manifestly collapsing, without that support the UK economy needs £140-150bn of additional deficit spending every year to hold it out of recession. But the interest on the national debt is now >£1bn per week so we're already perilously close to a terminal debt spiral. One last fiscal blow-out in the Autumn statement is my guess, and then they let things crash hard in 2015. A house price slump and a return of the secular bear in equities.

A secular bear in most assets, don't you think?

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HOLA4415

At least he implies there are limits to how much Gov can borrow (he says it's a choice when, really it is not) to keep things the way they are.

Perhaps if there were fewer VIs backed in the economy, younger people would have more opportunity to focus on creation and real entrepreneurship... failures yes, but one or two companies make it and they in turn bring about more succesful companies.

Possibly even bringing about emerging new ways of productive economic activity that old VIs (including many of us now) can not even imagine... way beyond just old-world manufacturing and selling houses at higher prices, and the anti-entrepreneurship policies such as Help-to-Buy to try and get younger people in as much debt as possible.

...

Most sane people would understand this, yet it just doesn't sink in with our ruling class. I realise that vested interests are at play, but imho they are guilty of destroying the country's soul.

Edited by Trampa501
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HOLA4416

A very doom laden speech to the G20, which has supposedly upset European equity markets this morning, but the 0.5% contraction in Japanese GDP for Q3 was probably more telling.

I either read somewhere this morning (or heard it on the Today programme) that it was actually a coded message to the UK public that bad economic times were on the way so this was no time to elect a Labour government. Meantime he is doing his best for HPC regulars by crushing world economic sentiment.

I saw/heard this too. My rule of thumb for politicians is that they will avoid telling the truth and the way things really are (or are imminently going to be) until they cannot avoid it any longer or risk becoming a universal figure of ridicule (beyond that of ordinary everyday political jibes).

Thus my immediate reaction was that IF Cameron, as sugar coater-in-chief, is actually starting to tell things how they are (i.e the way we here at HPC already know/understand, never mind the wider public) then things really must be getting bad - and what is coming round the corner could well be worse than many even here expect?!

Time to finally batten down the hatches??

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HOLA4417
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HOLA4418

At least he implies there are limits to how much Gov can borrow (he says it's a choice when, really it is not) to keep things the way they are.

Perhaps if there were fewer VIs backed in the economy, younger people would have more opportunity to focus on creation and real entrepreneurship... failures yes, but one or two companies make it and they in turn bring about more succesful companies.

Possibly even bringing about emerging new ways of productive economic activity that old VIs (including many of us now) can not even imagine... way beyond just old-world manufacturing and selling houses at higher prices, and the anti-entrepreneurship policies such as Help-to-Buy to try and get younger people in as much debt as possible.

Here is one of our entrepreneurs.. living in a shed, whilst older VI counting their HPI on £1m+ ordinary houses.... and Wonderpup's 'The VI won't let lower prices happen/ Be careful what you wish for' / 'Get your debt on' new victims stretch to buy £500K two bed flats in Brixton and Tooting.

I don't understand this 'nut'.

Its one of these mad women business ideas.

5 years ago it was hand-made jewellry.

3 years ago it was cup-cakes.

Now it seems to be p1ssing nut butters - peanut butter to the man in the street.

There's a woman near me doing it - £6 a small jar of peanut butter.

All hand roasted. In small batches.

WTF does hand roasting peanuts add?

Make a bigger batch and sell it for less FFS!

I fail to to see what someone in the UK's competive advantage is:

1) we don;t have a commercial nut crop

2) We have expensive labour + real estate.

How the fck can you compete with America or Africa?

Is there a page on mumsnet or a Start your own business section in Cosmos hat comes out with these ideas?

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HOLA4421

Yep. 1970s - without the manufacturing base to destroy.

Maybe all the banks and financiers will go on strike and ask stupid pay rises?

Whats that you say - there already getting stupid money.

Better hope stagflation works. What comes next is incomparably worse.

Recession, depression, stagflation, hyperinflation, default.

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HOLA4422

Always interesting when UK politicians are strutting on the world stage to turn the Google News search to its foreign editions (ie US, Canada, Australia, etc) to see how they report our mighty leaders passing down their vision from Olympus. To be honest you will struggle to find Cameron mentioned at all in most foreign reporting of the G20 he is considered such a non entity

This is what the Australian Business Insider has to say about Cameron's article in the Guardian

British prime minister David Cameron has penned a piece for the Guardian today, with one basic message: don’t blame me if the economy tanks before the election.

He’s flagging up all the big concerns for the global economy:

Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy.
As I met world leaders at the G20 in Brisbane, the problems were plain to see. The eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too. Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down. Despite the progress in Bali, global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.

Everything sounds a bit bleak. In 2006, just after he’d become Conservative party leader, Cameron famously pushed an optimistic strategy, saying that the Tories should “let sunshine win the day”. Since then, the economics have turned in Cameron’s favour. While the rest of the eurozone flirts with deflation and recession, the UK still has decent economic growth. It’s not perfect, of course. The poor have basically missed out on the recovery. But the UK looks good in comparison to its peers.

The Guardian piece goes on:

In our interconnected world, wider problems in the global economy pose a real risk to our recovery at home. We are already seeing that, with the impact of the eurozone slowdown on our manufacturing and our exports.
We cannot insulate ourselves completely, but we must do all we can to protect ourselves from a global downturn.

It’s a curious message: David Cameron swept to power in 2010 after an election campaign that asserted that the global financial crisis wasn’t just a global phenomenon, but was specifically the fault of the governing Labour party. He’s now preparing to go into another election campaign warning people that the economy severely in danger from the global economy, but the slowdown isn’t to be blamed on him.

So after 5 years of Cameron's government we are more f*cked than when it started. However, it is all the fault of global events outside his control not that his administration is completely incompetent and that everything it touches turns to sh*t. Reminds me of the Gordon Brown speech about the 'financial crisis that started in America'

I wonder why Cameron chose the Guardian to publish his article. Perhaps he thinks its readers are more likely to vote for him than those at the Telegraph who appear to have decamped en masse to UKIP. Maybe all the a party leaders think this is the election to lose and they are all now desperately competing to ensure that it is their rivals who get lumbered with the job of being PM.

Edited by stormymonday_2011
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HOLA4423

But isn't there also a belief that the banks are always priority no.1. And some believe that a HPC would benefit the banks as they would be able to issue new mortgages on all those boomer/pensioner homes that are mortgage free not giving the banks any return (and by proxy costing the economy because BTL and OO's pay so little in terms of property taxes). If the only reason for keeping HPI is to get the votes in, perhaps the Tories have twigged that this isn't a sure thing anymore (partly because of the threat of UKIP and partly because many OO's now have their grown up children living with them and no longer support endless HPI as well as having to worry about things like IHT). The more houses increase in price the more people are drawn into IHT, especially in London.

+1

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HOLA4424

I saw/heard this too. My rule of thumb for politicians is that they will avoid telling the truth and the way things really are (or are imminently going to be) until they cannot avoid it any longer or risk becoming a universal figure of ridicule (beyond that of ordinary everyday political jibes).

Thus my immediate reaction was that IF Cameron, as sugar coater-in-chief, is actually starting to tell things how they are (i.e the way we here at HPC already know/understand, never mind the wider public) then things really must be getting bad - and what is coming round the corner could well be worse than many even here expect?!

Time to finally batten down the hatches??

+2

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HOLA4425

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