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The Masked Tulip

How Long Before The Debt Bubble Bursts?

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How long before we see articles like this in the UK Media - about 8 weeks after Christmas IMPO.

It's a familiar story for many area residents, who have been relying on every kind of debt - from credit cards and second mortgages to home equity lines of credit, or student and car loans - to stay afloat, especially as they face stagnant wages and less job security. Some are racking up debt to pay for extravagances such as vacations or fancy SUVs. But many are forced to turn to credit cards to pay for necessities such as medical expenses, car repairs and even groceries.

Their borrowing and spending has propped up the economy, two-thirds of which depends on the consumer.

Now, a small needle may be enough to ***** the so-called debt bubble and bring some consumers' spending - and, potentially, the expanding economy - to a crashing halt.

The interest rate factor

The needle: rising interest rates. Consumers aren't going to be able to keep up their debt levels if interest rates keep rising, so something will have to give.

"Americans have become used to spending more than they earn, and to a great extent a lot of households are overextended," said Peter Morici, a University of Maryland economist. "They've borrowed too much, and now it's time to pay the piper."

How long before the debt bubble bursts?

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I'm not going to hold my breath. The nutters that be seem to be quite intent on lowering interest rates if anything goes wrong. :blink:

Yes but don't forget the Yanks are between a rock and a hard place too. Put IRs up and it will burst the debt bubble, put them down and China and Japan are going to reduce the amount of T-Bonds they buy. Without people buying their debt they can't keep the economy afloat.

That's why lots of serious economists think we are in for an armageddon (economic) scenario - with a global depression on the cards. Basically people in the West are borrowing money to buy goods from people in the East. And the people in the East are lending them the money to buy the goods.

It doesn't take a genius to spot there is a flaw in there.

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I feel sick just reading that.

Big mortgages, big cars, meals out and Friday night down the town.

One problem apart from house prices being a real struggle for most people (every time I see a "SOLD" sign I think of the poor bu££er taking on a massive debt) is that these days a trip down the pub - local with cheap beer - has turned into an expensive night out. I can remember (and I'm only 40) really good nights out being relatively cheap - now if I go out with my mates we have to end up having a meal and the whoel thing can cost £60 + and I expect that is cheap in comparison to what some people pay for a night out. Imagine this is happening 2 times per week!!! Then travel costs, food, utility charges, and the rest..............I couldn't imagine being living on the "average" income it must be a nightmare for people.

Now if everybody lived in £50 a week council houses - things would be so much different............

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Only yesterday I heard a story about two 20-something NURSES going on holiday to Ibiza over Christmas for a week. One is taking 1K spending money, the other is taking 2.5K.

Apparently, this is because the nightclubs cost £45 to get in over Christmas - I thought girlies got in free - and that drinks are a flat £10 whether you buy water or some exotic cocktail.

When I was in my early 20s we still had the triple breasted whore of Grantham in No. 10, 6 million of us were 'officially' unemployed and I did not have two pennies to rub together.

It staggers me how people accept spending money so easily these days as if it is a matter of course. The sooner the economic cycle goes full circle the better it will be for all of us.

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Only yesterday I heard a story about two 20-something NURSES going on holiday to Ibiza over Christmas for a week. One is taking 1K spending money, the other is taking 2.5K.

Apparently, this is because the nightclubs cost £45 to get in over Christmas - I thought girlies got in free - and that drinks are a flat £10 whether you buy water or some exotic cocktail.

When I was in my early 20s we still had the triple breasted whore of Grantham in No. 10, 6 million of us were 'officially' unemployed and I did not have two pennies to rub together.

It staggers me how people accept spending money so easily these days as if it is a matter of course. The sooner the economic cycle goes full circle the better it will be for all of us.

Beats buying JPs key worker housing!

Drinks and clubbing is clearly one element of the cost - I would expect something in that budget for...ahem...stimulants no doubt.

Its ok, they can get a rest when they get back, just go off sick.

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Only yesterday I heard a story about two 20-something NURSES going on holiday to Ibiza over Christmas for a week. One is taking 1K spending money, the other is taking 2.5K.

Apparently, this is because the nightclubs cost £45 to get in over Christmas - I thought girlies got in free - and that drinks are a flat £10 whether you buy water or some exotic cocktail.

They have very little to look forward to, probably live at home with their parents or in a cheap rental.

If there appears to be no opportunity for a real improvement in your quality of life by saving (as interest rates are low and house prices astronomical) hedonism seems like a decent option.

Better to be poor and happy than slightly less poor and miserable! ;)

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I can remember (and I'm only 40) really good nights out being relatively cheap - now if I go out with my mates we have to end up having a meal and the whoel thing can cost £60 + and I expect that is cheap in comparison to what some people pay for a night out. Imagine this is happening 2 times per week!!! Then travel costs, food, utility charges, and the rest.

Yep it is expensive. I remember a night out costing £30 - a good night too. Now going out with mates typically

costs around £70 - it really bites. I think some of the problem is cost of beer, and costs of getting into late night pubs/clubs. Taxis are also a lot more expensive than they used to be!

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In my day, we had magic mushrooms and they were free. Nature's bounty!

Not that I am encouraging drug-taking, of course.

But if you're going to do drugs, don't pay through the nose and then get into a debt that will cause you to take more drugs to escape from the living hell you have created.

Edited by Starcrossed

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In my day, we had magic mushrooms and they were free. Nature's bounty!

I thought MMs were still around, go visit your local shi7 infested cow field and pick em up. Mind you though, the rate the green belts being used up for new build crap, there wont be many fields left fit for forraging.

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a trip down the pub - local with cheap beer - has turned into an expensive night out. I can remember (and I'm only 40) really good nights out being relatively cheap - now if I go out with my mates we have to end up having a meal and the whoel thing can cost £60 + and I expect that is cheap in comparison to what some people pay for a night out. Imagine this is happening 2 times per week!!! Then travel costs, food, utility charges, and the rest..............I couldn't imagine being living on the "average" income it must be a nightmare for people.

exactly what i was thinking the other day, it seems to cost a fortune if you go out these days, maybe thats why my local pubs seem deserted on the weekends now, go back a few years and they used to be very busy on a weekend. i dont know where everyone has gone, many cant afford to go out maybe ? :(

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  • 301 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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